Raisin out­law has his day in sun

Farmer takes fight against national re­serve to high court

Northwest Arkansas Democrat-Gazette - - Business & Farm - DAVID A. FAHRENTHOLD

KER­MAN, Calif. — In the world of dried fruit, Amer­ica has no greater out­law than Marvin Horne, 68.

Horne, a raisin farmer, has been break­ing the law for 11 years. He now owes the U.S. govern­ment at least $650,000 in un­paid fines. And 1.2 mil­lion pounds of un­paid raisins, roughly equal to his en­tire har­vest for four years.

His crime? Horne de­fied one of the strangest arms of the fed­eral bu­reau­cracy — a farm pro­gram cre­ated to solve a prob­lem dur­ing Pres­i­dent Harry Tru­man’s ad­min­is­tra­tion and never turned off.

Horne said “no” to the national raisin re­serve.

“I be­lieve in Amer­ica. And I be­lieve in our Con­sti­tu­tion. And I be­lieve that even­tu­ally we will be proved right,” Horne said re­cently, sit­ting in an of­fice next to 20 acres of ripen­ing Thomp­son grapes. “They took our raisins and didn’t pay us for them.”

The national raisin re­serve is a 64-year-old pro­gram that gives the U.S. govern­ment power to in­ter­fere with the sup­ply and de­mand for dried grapes.

It works like this: In a given year, the govern­ment may de­cide that farm­ers are grow­ing more raisins than Amer­i­cans will want to eat. That would cause sup­ply to out­strip de­mand. Raisin prices would drop. And raisin farm­ers might go out of busi­ness.

To pre­vent that, the govern­ment can take away a per­cent­age of ev­ery farmer’s raisins, of­ten with­out pay­ing for them.

Th­ese seized raisins are put into a govern­ment-con­trolled “re­serve” and kept off U.S. mar­kets. In the­ory, that low­ers the avail­able sup­ply of raisins

and thereby in­creases the price for farm­ers’ raisin crops. Or, at least, the part of their crops that the govern­ment didn’t just take.

For years, Horne handed over his raisins to the re­serve. Then, in 2002, he re­fused.

Since then, his life has be­come a case study in one of Wash­ing­ton’s bad habits — a ten­dency never to re-ex­am­ine old laws once they’re on the books. Even ones like this.

When Horne’s case reached the Supreme Court this spring, Jus­tice Elena Ka­gan won­dered whether it might be “just the world’s most out­dated law.”

“Your raisins or your life, right?” joked Jus­tice An­tonin Scalia.

Last month, the high court is­sued its rul­ing and gave Horne a par­tial vic­tory. A lower court had re­jected Horne’s chal­lenge of the law. Now, the jus­tices told that court to re­con­sider it.

Horne does not have the per­sona of a live-wire rev­o­lu­tion­ary. He used to be a tax au­di­tor for the state. Now, in his sec­ond ca­reer, he watches fruit dry.

But get Horne talk­ing about the national raisin re­serve, and sud­denly he can’t find a metaphor to ex­press his con­tempt.

“You have heard of the rape of the Sabine women? This is even worse,” Horne said, ref­er­enc­ing a leg­endary mass ab­duc­tion from Ro­man mythol­ogy. “The rape of the raisin grow­ers.”

Horne has spent a decade try­ing to do one of the hard­est things in Amer­i­can pol­i­tics: killing a law by break­ing it.

Specif­i­cally, Horne is try­ing to kill Mar­ket­ing Or­der 989 — a fed­eral reg­u­la­tion meant to solve a prob­lem from the era af­ter World War II.

The govern­ment stopped buy­ing huge amounts of raisins to send over­seas with GIs, as it had done dur­ing wartime. So sup­ply out­stripped de­mand. Prices fell. The in­dus­try’s an­swer was to start a raisin re­serve.

It’s not quite what it sounds like. The govern­ment sim­ply waits for farm­ers to grow their crops — nine months of grow­ing grapes, then two to three weeks of dry­ing them in the sun. Then it takes away a part of that crop and stores it in ware­houses around Cal­i­for­nia.

The govern­ment might save some of th­ese “re­serve” raisins for later years. It might sell them to for­eign­ers. It might feed them to school­child­ren. Or cows. The point is to get them off the open mar­ket in the United States and lower the sup­ply avail­able to com­mer­cial buy­ers.

That, in the­ory, means greater scarcity and higher prices. The same ap­proach works for oil and di­a­monds.

“It’s a car­tel. Let’s use the power of the govern­ment to op­er­ate a car­tel,” said Daniel Sum­ner, di­rec­tor of the Univer­sity of Cal­i­for­nia’s Agri­cul­tural Is­sues Cen­ter. Congress had given the U.S. Agri­cul­ture Depart­ment the au­thor­ity to op­er­ate re­serves dur­ing the New Deal: Other re­serves ex­isted for al­monds, wal­nuts, tart cher­ries and more.

To­day, it is run by the Raisin Ad­min­is­tra­tive Com­mit­tee, a Fresno-based or­ga­ni­za­tion made up of in­dus­try rep­re­sen­ta­tives, but over­seen by the Agri­cul­ture Depart­ment. The com­mit­tee is al­lowed to sell off some of those re­serve raisins that it took for free. It can use those pro­ceeds to pay its own ex­penses and to pro­mote raisins over­seas.

And if there’s any money left over, it goes back to the farm­ers whose raisins were taken.

The com­mit­tee is not very good at hav­ing money left over. “We gen­er­ated $65,483,211. And we pretty well spent it all,” said Gary Schulz, the com­mit­tee’s pres­i­dent and gen­eral man­ager, re­view­ing the books for one re­cent year. That year, the com­mit­tee spent those mil­lions on stor­age fees. Over­seas pro­mo­tions. Ad­min­is­tra­tive over­head.

So what, pre­cisely, was left for the farm­ers?

“Zero,” said Schulz. “They re­ceived the value of our in­vest­ment.” A re­cent study showed that raisin ad­ver­tis­ing brought in nearly $10 in rev­enue for ev­ery dol­lar spent; how­ever, U.S. raisin con­sump­tion has de­clined since 2004.

In 2002, Horne de­cided he wouldn’t give those peo­ple his raisins any­more.

“The hell with the whole mess,” he says now. “It’s like be­ing a serf.”

That year, Horne sold all of his raisins. He re­fused to save any for the re­serve.

Af­ter a while, Horne got a list of the charges against him.

“The re­spon­dents vi­o­lated sec­tion 989.66 of the Or­der,” it said, in part. “By fail­ing to hold in re­serve … ap­prox­i­mately 24.7 tons of Nat­u­ral Sun-dried Seed­less raisins.” There were 12 charges in all. Horne needed a lawyer. Horne’s at­tor­ney, Brian Leighton, ar­gued that the raisin re­serve was flatly un­con­sti­tu­tional. The Fifth Amend­ment says that pri­vate prop­erty may not be taken with­out just com­pen­sa­tion. This, he be­lieved, was not that. “It’s ba­si­cally theft,” Leighton said.

Horne tried that ar­gu­ment on an Agri­cul­ture Depart­ment hear­ing of­fi­cer. He lost — re­peat­edly, un­til the case was heard by the Supreme Court, where jus­tices seemed sym­pa­thetic to Horne. And mys­ti­fied by the whole idea of the raisin re­serve.

Horne’s fight has di­vided the world of raisin grow­ers. At least a few dozen are hard­core sup­port­ers, con­tribut­ing 2 cents per pound of raisins to Horne’s le­gal de­fense fund.

But he is also hated by the peo­ple who fol­lowed the rules and handed over their raisins when the govern­ment asked.

“I lost a lot of my land, fol­low­ing the rules,” said Ed­die Wayne Al­brecht, a raisin grower in nearby Del Rey, Calif. He handed over 47 per­cent of his crop to the re­serve in 2003. And 30 per­cent in 2004. He lost so much money that his hold­ings shrank from 1,700 acres to 100.

“He got 100 per­cent, while I was get­ting 53 per­cent,” Al­brecht said. “The crim­i­nal is win­ning right now.”

The Agri­cul­ture Depart­ment has the power to abol­ish the raisin re­serve. But it hasn’t. There is no pro­vi­sion in Mar­ket­ing Or­der 989 for to­day’s raisin grow­ers to go around the com­mit­tee and vote out the pro­gram that grow­ers in 1949 ap­proved.

But Horne has still won a kind of vic­tory. For the past three years, the Agri­cul­ture Depart­ment and the Raisin Ad­min­is­tra­tive Com­mit­tee have agreed that no new raisins should be put into the re­serve.

Will the re­serve re­ally never be used again?

“Never,” said Schulz, the keeper of the raisin re­serve, “is an aw­fully long time.”

Wash­ing­ton Post/CHRIS HARDY

Work­ers mea­sure out 5-pound bags of raisins at a co-op in Ker­man, Calif. Raisin farmer Marvin Horne has re­fused to con­trib­ute to a manda­tory re­serve for the past 11 years.

Wash­ing­ton Post/CHRIS HARDY

Marvin Horne, a farmer in Cal­i­for­nia, has ig­nored a man­date to send raisins to a national re­serve. He re­cently took his fight to the U.S. Supreme Court.

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