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June 15, 2013

Stop the Farm Bill: FDR's Socialist Structure Still Violating Farmers

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The massive farm bill being considered by the House of Representatives — the Federal Agriculture Reform and Risk Management Act (H.R. 1947) — exemplifies the regulatory excess that characterizes the federal government today and which dominates our agricultural policy. Much of this government control began implementation in the 1930s, led by advisors and aides to the Roosevelt administration who greatly admired the complete Soviet takeover and nationalization of agriculture in Communist Russia.

That system has continued for decades. It essentially licenses farmers, telling them what they can and can’t plant, how much they can produce, and in some instances what they must do with their production. Often, American taxpayers pay farmers not to farm. And producers have involuntary levies [1] imposed on them to pay for standardized promotion of various commodities.

This byzantine structure is illustrated in a case that was just decided by the U.S. Supreme Court, Horne v. Department of Agriculture. [2]

Under the Agricultural Marketing Agreement Act of 1937, the secretary of Agriculture can regulate the sale and delivery of agricultural goods. In the best tradition of Russian commissars, the secretary has promulgated a “California Raisin Marketing Order” that is administered by the Raisin Administrative Committee. That order limits the supply of raisins in the market to artificially inflate prices. To enforce those limits, the secretary can (and frequently does) order raisin growers to “turn over a percentage of their crop to the Federal Government” to create an annual reserve pool of raisins.

That’s correct.

In our land of supposed economic liberty, the federal government can in essence confiscate the raisins produced by farmers to make sure there are not — in the sole opinion of the all-powerful secretary of Agriculture — too many raisins on the market.

“Handlers” who are affected by the regulation, which includes processors, associations of producers, and others engaged in the handling of agricultural commodities, are subject to both civil and criminal penalties if they disobey the Agriculture Commissar.

Mind you, producers who have to turn over their raisins don’t necessarily get paid for them. After all, someone has to pay for the Raisin Administrative Committee (RAC) to dictate raisin policy (although they don’t call them five-year plans). The RAC has the power to sell the reserve raisins overseas “to finance the RAC’s administrative costs,” or the RAC can direct that the raisins are “sold or given at no cost to secondary, noncompetitive domestic markets, such as school lunch programs.” So raisin growers only “retain a limited interest in the net proceeds of the RAC’s disposition of the reserve pool.”

In Horne, a married couple who owned Raisin Valley Farms and had been producing raisins since 1969 refused to pay assessments to the RAC or to turn over part of their raisin crop (and that of other farmers for whom they were doing packaging) to the government for the raisin reserve. The government initiated an enforcement action against the Hornes, assessing them almost half a million dollars for the value of the raisins they should have forfeited to the reserve. In other words, the Agricultural Department wanted the Hornes to pay the government the value of their own raisin crop, something that is totally foreign to our constitutional view of property rights. The Hornes challenged the enforcement action, claiming that the government was taking their property without compensating them in violation of the Fifth Amendment.

The Hornes were not able to get a ruling on the substantive merits of their claim. The Ninth Circuit Court of Appeals upheld the government’s actions against the Hornes, but refused to consider their takings claim, saying it did not have jurisdiction. The Supreme Court disagreed, so the case will go back down to the Ninth Circuit where the court will look at the Fifth Amendment issue.

The real point here is the violation of some of our most fundamental principles of private property and economic liberty, violations here represented by the California Raisin Marketing Order and the entire structure of agricultural controls explicit in federal laws and regulations.

These are continued unchanged in the current farm bill.

The Hornes, along with many other raisin farmers with whom they do business, simply want to raise and sell their raisins without government interference, unnecessary controls, or regulatory confiscation. It is about time we started to take apart the 1930s socialist agricultural system that should never have been implemented in the first place. Certainly, it should not be continued by Congress.

First appeared in PJ Media.

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