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The United States government has deployed central planning 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. As we noted, in recent years the government targeted raisins in California. In 2003, Fresno raisin growers Marvin and Laura Horne would have to give up more than 30 percent of their crop, receiving nothing in return. To the Hornes this looked like theft, so they grew, packaged and sold raisins apart from government planners. The U.S. Department of Agriculture responded with a fine of $695,000, so the Hornes duly appealed and the case reached the U.S. Supreme Court.
Last year, Chief Justice John Roberts ruled that “Raisins are private property, the fruit of the growers’ labor, not public things subject to the absolute control of the state,” adding “Any physical taking of them for public use must be accompanied by just compensation.”
The court ruled 5-4 in favor of the Hornes and the only justice who filed a dissenting opinion was Justice Sonia Sotomayor, who bills herself as a “wise Latina.” The Justice Department argued that the statute of limitations had run out but a new ruling by the U.S. Court of Federal Claims rejects that argument. Marvin and Laura Horne may continue their “takings” case in quest of the just compensation they deserve. The real issue is government intervention in agriculture.
“Central planning was thought to work very well in 1937,” observed the late U.S. Supreme Court Justice Antonin Scalia during arguments in the raisin case, “and Russia tried it for a long time.” Justice Elena Kagan slammed the whole USDA raisin program as “ridiculous,” and she is right about that. Nearly 80 years after the Agricultural Marketing Agreement Act of 1937, it is time to stop government colonization of the market.