Author: Government Ruining California Raisin Business

Tuesday, 27 May 2014 12:10 PM

By Lisa Degnen

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The Ninth U.S. Circuit Court of Appeals has ruled that the U.S. Department of Agriculture could take 47 percent of a farmer's harvest according to an antiquated law, as long as the government aims to drive up crop prices.

An opinion piece published Monday in The Wall Street Journal says that California raisin growers Marvin and Lena Horne have been fighting the unfair USDA regulation for almost a decade.

The federally authorized Raisin Administrative Committee was developed in the 1930s to allegedly stabilize markets and prevent gluts. Author James Bovard writes in the Journal that the couple were fined almost $700,000 for refusing to turn over their 47 percent to the government in 2002 and then another 30 percent of their crop in 2003. Their attempt to fight the ruling eventually landed before the Supreme Court.

Bovard reports that during oral arguments, Justice Stephen Breyer said: "I can't believe that Congress wanted the taxpayers to pay for a program that's going to mean they have to pay higher prices as consumers." And Justice Elena Kagan stated that this might be "the world's most outdated law."

But the Ninth Circuit panel looked at a 1943 Supreme Court ruling justifying regimenting raisin farmers because the industry became "compelled to sell at less than parity prices," Bovard writes.

That index was "concocted by government agricultural economists in the 1920s to justify federal aid to farmers. 'Parity' was based on a set ratio of farm prices to non-farm prices, in correlation with the ratio that prevailed in 1910-14, a boom time for farmers. Because production costs for both farm and non-farm goods radically changed, it never made any economic sense to rely on 'parity,' but it was a popular political ploy," he argues.

Bovard, author of "Attention Deficit Democracy" and other books, says that these days many California farmers have shifted their land to other crops because of the restrictions and raisin production is rapidly decreasing in the state.

"The Ninth Circuit effectively declared that a taking is not a taking if the government intends to benefit the victim, regardless of how much damage the government inflicts," he says. "The judges played down the Hornes' losses because they only involved 'personal property' — not 'real property' such as land. This is a slippery distinction that at least one other federal appeals court has utterly rejected. The decision stressed that the 'Hornes did not lose all economically valuable use of their personal property,' presumably since the feds did not take all their raisins."

All of the raisins grown in the United States are produced within a 60-mile radius of Fresno, California, and total more that 350,000 tons every year.

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