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U.S. Supreme Court Strikes Down Raisin Price Controls

Jun 22, 2015

The U.S. Supreme Court is ruling in favor of a Fresno raisin farmer that it is unconstitutional for a government-backed agricultural board to claim control of a third of his crop.

The ruling is a blow against a program that authorizes growers to join together to prop up market prices.

The justices say the scheme violates the Fifth Amendment by allowing the government to take the raisins without providing just compensation. The court ruled that, just like land, raisin growers must be compensated for any product taken by the government.

The case was brought by Fresno raisin grower Marvin Horne who says the program violated his right to sell his raisins on the open market.

“It means freedom for the farmer. He is no longer going to have to give up a portion of his crop and get nothing for it. It is going to make him whole. It is going to make the whole raisin industry whole,” Horne said.

Horne says the Raisin Administrative Committee can still achieve its goals if it just purchases his raisin rather than prohibiting him from selling them.

In the opinion, Chief Justice John Roberts said the ‘reserve requirement imposed by the Raisin Committee is a clear physical taking. Actual raisin are transferred from the growers to the government.”

In years of large crops, the Raisin Administrative Committee would require farmers to set aside a certain portion of their crop to keep prices up.

The market order program came about as growers in the industry teamed up and all agreed to certain limits to stabilize the market and prices year to year.

Not everyone in the raisin industry is opposed the practice.

Kalem Barserian with Lion Raisins says the orders once served a purpose when wineries would dump their unused grapes on the raisin market and flood supply.

Barerian says now the ruling is meaningless because there has been no need for the market orders as grape growers have pulled out their vineyards for more profitable crops.

“We have lost over 100,000 acres of Thompson grapes to other commodities that are returning much more money. So we haven’t used the reserve portion for five years,” Barserian said.

Barserian says the industry is also being squeezed by growing global grape production, making future market orders unlikely.

The Raisin Administrative Committee declined to comment on the ruling.

The U.S. Department of Justice also declined to comment, referring only to oral arguments before the court.

California produces 99% of U.S. raisins, and 40% of the crop globally.