Leef details for Forbes readers the federal government’s ‘raisin ripoff’

If you need more proof that the federal government’s meddling often leads to adverse results, George Leef is happy to provide the evidence. His latest Forbes column focuses on federal rules regarding raisins.

Under a USDA marketing order decreed in 1949, American raisin growers are required to hand over to their bureaucratic overseers (a.k.a. the Raisin Administrative Committee) a large percentage of their yearly crop, currently 47 percent. In return, they receive no guaranteed compensation at all, but merely a vague promise that some money might be returned to them after the Committee has sold the raisins and has covered all its costs. (The costs of the growers are immaterial.)

The effects of this are harmful to consumers. Prices in the U.S. are driven higher by the USDA’s artificial scarcity and it is not uncommon for California raisins to be less expensive in Europe than in America.

You might think that between the Democrats, who profess to care about consumer welfare and the Republicans who say they’re for free enterprise and private property rights, we would long ago have gotten rid of this governmental abomination. Nope.

You might also think, if you’re familiar with the Constitution, that this exercise in legal plunder would have been struck down by the courts. The Fifth Amendment is unambiguous, stating that when government takes private property for a public use, it must pay just compensation. Putting aside the objection that the seized raisins are hardly put to any public use, under this scheme producers are forced to give up their property and then receive little or no compensation. How can that be tolerated under the Fifth Amendment?

One California raisin grower, Marvin Horne, has been in a legal war with the USDA over this nasty business, which he argues is unconstitutional. His case reached the infamously statist (and frequently reversed) Ninth Circuit in 2012, but he lost when the court ruled en banc that it lacked jurisdiction. The U.S. Supreme Court unanimously disagreed with that holding, so the case went back.