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Government Raisin Ransacking

Friday April 24th, 2015   •   Posted by K. Lloyd Billingsley at 8:50am PDT   •  

USDA_logo_200“Central planning was thought to work very well in 1937,” observes U.S. Supreme Court Justice Antonin Scalia, “and Russia tried it for a long time.” So did the United States, through schemes such as the Agricultural Marketing Agreement Act of 1937. Authorized by Congress during the New Deal, the Act set up cooperative boards and conscripted growers into reserve set-asides. After 78 years, the corruption inherent in this program has finally reached the nation’s highest court.

As The Economist observed, Fresno raisin growers Marvin and Laura Horne had complied with the Act, but in 2003-4 the Hornes “would have had to fork over 30 percent of their crop and receive nothing in return. To them, this looked like theft.” So the Hornes proceeded to grow, package and sell raisins on their own, apart from government planners. Their reward was a fine of $695,000. The Hornes appealed and the case has now reached the high court, where, as David Savage of the Los Angeles Times observes, a majority appear ready to rule that the “taking” of their raisins entitles the Hornes to just compensation. “The government literally takes possession of the raisins,” said the Hornes’ lawyer Michael McConnell, a Stanford law professor. “And USDA came after our clients with heavy fines because they objected.”

Government lawyers said that if growers didn’t like the program, they were free to plant other crops. According to Chief Justice John Roberts, “That’s a pretty audacious statement. If you don’t like our regulations, do something else.” Justice Elena Kagan called the program “ridiculous,” and Justice Samuel Alito compared it to government grabbing one of every five automobiles or cell phones. A decision is expected in June, and as The Economist noted, it will be significant. “If the court halts the raisin ransacking, it could affect other coercive farm programs, too.” In 2015, nearly 80 years after the Agricultural Marketing Agreement Act of 1937, many politicians and bureaucrats still believe central planning works very well.

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April 2015