More on Raisin Freedom

Deciding whether the government can force a farmer to deposit some of her raisins in a reserve, we have to look at the Takings Clause of the Fifth Amendment of the U.S. Constitution.

First a bit of background…

The Takings Clause

Saying, “nor shall private property be taken for public use, without just compensation,” the Takings Clause is all about balancing private property and society’s needs. When he proposed the Takings Clause, James Madison was said to be concerned with military seizures from civilians during the Revolutionary War.

Whereas Madison was referring to physical property, by the 1920s, the Takings Clause took the leap into property value. The subsequent debate included a case where a federal law prohibited doctors from using malt liquors for medicinal purposes. Citing the Takings Clause, a brewery sued and lost. On the other hand, when a chicken farmer said low flying military planes caused his frightened chickens to injure themselves, the courts agreed it was a “taking.”

The Raisin Decision

In Horne v. Department of Agriculture, the relevant facts center on the 1.2 million pounds of raisins that were supposed to be taken from a farmer to a USDA raisin reserve.  Because he refused to participate in the program, the government went after the $480,000 value and a $200,000 fine. Last week, the Supreme Court said it was a “taking” and voided the fines and fees.

Our Bottom Line: Property Rights

As always, thinking economically returns us to tradeoffs. With the Agricultural Marketing Act (1937) empowering the government to create a raisin reserve that would limit supply and boost prices, we have been choosing between the public interest and private property rights.

This Daily Show segment on the raisin reserve is great for huge smiles. (I could not discover a direct youtube link.)

http://thedailyshow.cc.com/videos/pmrodj/raisin-growers-lawsuit