Federal Court Upholds ‘Out-Dated’ New Deal Scheme That Hurts Small Farmers

In June 2013 the U.S. Supreme Court ruled unanimously in favor
of California raisin farmers Marvin and Laura Horne. At issue in
Horne v.
Department of Agriculture was the Agricultural Marketing
Agreement Act of 1937, a New Deal law designed to raise certain
agricultural prices by controlling supplies. For the Hornes, this
meant handing over a portion of their raisin crop each year to the
federal government, thereby contributing to the artificial scarcity
that is supposed to benefit the industry at large. (Never mind if
those higher prices benefit consumers. New Deal lawmakers were
not
worried about that.)

As the Hornes see it, this government-mandated surrender of a
portion of their crop violates the Takings Clause of the 5th
Amendment, which requires the government to pay just compensation
when it takes private property for a public use. But the U.S. Court
of Appeals for the 9th Circuit ruled against the Hornes in 2011,
holding that it lacked jurisdiction to even hear their Takings
Clause arguments. On appeal last year, the U.S. Supreme Court
overruled that decision and granted the Hornes their day in federal
court.

That day has now come and gone. And once again, the 9th Circuit
ruled against the Hornes. In a
decision issued last Friday, the 9th Circuit found the Takings
Clause to be undisturbed because the USDA “did not authorize a
forced seizure of the Hornes’ crops, but rather imposed a condition
on the Hornes’ use of their crops by regulating their
sale.” In effect, so long as the farmers “voluntarily choose to
send their raisins into the stream of interstate commerce,” they
must bend to the regulatory rules set by the USDA. Don’t like it?
Try “planting different crops,” the court suggested. Or perhaps the
Hornes might consider “selling their grapes without drying them
into raisins.”

At this point, you may be wondering where the USDA gets the
authority to impose these sorts of controls on the raisin supply in
the first place. We’re not talking about health or safety
regulations, after all, we’re talking about a federal agency
raising prices by artificially limiting supplies. What makes that
pass muster?

Here’s how the 9th Circuit addressed those concerns:

While the Hornes’ impatience with a regulatory program they view
to be out-dated and perhaps disadvantageous to smaller agricultural
firms is understandable, the courts are not well-positioned to
effect the change the Hornes seek, which is, at base, a
restructuring of the way government regulates raisin production.
The Constitution endows Congress, not the courts, with the
authority to regulate the national economy.

Translation: This court defers to the judgment of Congress on
economic matters and there’s nothing you small farmers can do about
it.

The Hornes next move is to either ask for a rehearing of their
case by a full panel of the 9th Circuit, or else seek review (once
again) at the U.S. Supreme Court.

Related: Reason TV profiled the Hornes last
year.