Sixty-four years ago, a federal marketing order (MO) was created for raisins. Now, some of the stipulations of the Raisin Administrative Committee (RAC) are being contested in the Supreme Court.
According to the U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS) website, federal marketing orders (MOs) for fruits and vegetables are intended to “maintain the high quality of produce that is on the market; standardize packages; regulate the flow of product to market; establish reserve pools for storable commodities; and authorize …research…and advertising”. In other words, MOs are a federally organized cooperative of producers, intended to manipulate the market to the collective benefit of the industry.
While the AMS states that the MOs are “initiated by industry and enforced by the USDA,” it turns out that once created, the marketing orders bind future industry growers without consultation. While farmers emerging from the Great Depression thought that the creation of today’s Raisin Administrative Committee would be helpful, some of today’s growers don’t find RAC to be beneficial. The main problem? The RAC’s power to “regulate the flow of product to market”: According to an article from The Economist, the committee is allowed to appropriate whatever amount of raisins it sees fit in order to maintain an “orderly market”; in 2003, that was 47 percent of some farmers crops. The appropriations occur at the packaging level (so the marketing order technically applies to packagers, rather than growers), but farmers do not receive money for the grapes that get taken at packaging plants.
Fighting the law are long-time growers-turned-packagers, Laura and Marvin Hornes. Having experienced the financial loss from turning over their grapes to packagers, only to have the product rescinded by the government without any pay, the Hornes opened up their own packaging association, according to an interview with the Free Enterprise. Once the Raisin Valley Marketing Association opened, the Hornes actively evaded product assessments and appropriations, and have been subject to harassment from the USDA as a result.
The case before the Supreme Court will decide whether growers should receive compensation for appropriated product or not.The focus of the case is perhaps less interesting than what is not up for debate: whether the government has the right to control markets through quality control, product amount, and marketing uniformity.
