Why It Was Illegal to Sell All Your Raisins Until 2015

0:00 Think of the classic crimes.

0:02 Robbery, murder, robbing a murderer.

0:04 Boring.

0:05 Today, we're talking about a far more esoteric crime.

0:08 Selling 54% or more of your personal raisin crop in the year 2002.

0:14 Now, these days, a California grape farmer like you is allowed

0:17 to sell as many of your raisins to whomever you like.

0:20 But until 2015, the government was allowed to take

0:23 a massive annual cut of your wrinkly darlings.

0:26 And to explain why, we're going to have to touch on, among other things,

0:29 World War II, the New Deal, the Fifth Amendment,

0:31 the Magna Carta, a real life private investigator named Rocky Pipkin,

0:35 and a real life grumpy raisin grower by the name of Marvin Horn.

0:38 In 2002, Marvin Horn, like every other raisin maker in the US,

0:42 was [music] to give a whopping 47% of his crop

0:45 to the federal government to put in their raisin reserve.

0:47 [music] And not because of some fresh

0:49 new policy from that nasty communist George W.

0:51 Bush.

0:52 This had already been common practice for decades.

0:55 [music] But 47% was just too much for Horn.

0:58 So when Uncle Sam sent a truck to pick up the goods,

1:01 Uncle Marv turned them away and landed himself a $695,226.92 [music] fine,

1:08 which ignited a legal battle that over a decade

1:10 later would spell the [music] end of the raisin reserve.

1:13 But I'm getting ahead of myself.

1:15 Why the did the US government keep a raisin reserve in the first place?

1:20 Picture this.

1:20 It's World War II.

1:21 A very bad time in general, but a baller time to be the United States economy.

1:26 During the war, our government was buying tons

1:28 of raisins to send over to Europe as troop snacks.

1:31 But when the war ended, not only did government demand for raisins plummet,

1:35 but grape farms in Europe began to recover and start producing again,

1:38 meaning not only did the many raisin growers

1:40 of California Central Valley lose business from their biggest customer,

1:43 but they also had more competition.

1:45 By 1949, the price of raisins had fallen 60% in about

1:49 3 years from 309 bucks a ton to just 130.

1:54 Luckily, all the way back in the New Deal,

1:56 Congress passed the Agricultural Marketing Agreement Act of 1937,

1:59 which gave the government power to create

2:00 a crop reserve to stabilize the market.

2:03 And low, around this time, the government created reserves for a bunch of stuff.

2:07 Walnuts, almonds, tart cherries, and of course, raisins.

2:11 Here's basically how the raisin reserve, the reserve, worked.

2:14 Every year, a group of private raisin producers

2:17 called the raisin administrative committee would decide based

2:20 on the size of that year's harvest what portion

2:22 of it each grower had to put in the reserve.

2:24 The idea was to prevent over supply.

2:26 If a year saw a bumper crop,

2:28 or if say everyone had devoted a ton of land to raisins while there was a war

2:32 going on, but now the war is over

2:33 and they're growing more raisins than anyone needs,

2:35 raisin growers could collectively artificially reduce the supply

2:38 of raisins [music] to the US market,

2:40 which would keep the price high enough to keep them all in business.

2:43 The Department of Agriculture, for its part,

2:45 would take whatever portion the committee decided on and make it law.

2:48 Then take all those extra raisins and distribute them in non-competitive ways.

2:52 Either exporting them to foreign markets,

2:54 donating them, putting them in school lunches, adding them to animal feed,

2:57 or trying to wean old Gipper off those dang jelly beans.

3:01 Those reserve raisins didn't tend to make a ton of money,

3:03 but any money they did make would be distributed back

3:06 to the farmers after paying off the government's administrative costs,

3:09 though often not that much.

3:10 Between storage for raisin warehouses all over California,

3:13 to administrative overhead and marketing raisins overseas,

3:16 the ACT department tended to spend most or all of their revenue,

3:19 sometimes in the tens of millions of dollars,

3:21 before returning anything to the growers.

3:23 While this solution was on some level kind of silly, it did work.

3:27 By the 1958-59 season, about a decade after the reserve started,

3:31 raisin prices were back up to $2 per ton more than their 1946 levels.

3:36 So, the system stayed.

3:37 Year in and year out, the raisin people would decide how many raisins to saddle

3:41 the government with to restrict supply and the government

3:43 would get rid of them and the price would stay

3:45 high enough for the remainder the farmers stayed in business.

3:48 In the 2002 2003 season, as we know, that portion was set at 47% enough

3:54 to turn Marvin Horn into a conscientious objector.

3:56 And fair enough, right?

3:58 That's a lot of raisins to give to the Bush administration.

4:00 And growers only got paid back 205 bucks

4:03 a ton for the raisins in the reserve that year.

4:05 And there were many, many years where they didn't get paid enough

4:08 to cover the cost of growing the government's raisins,

4:10 including years where they got paid nothing at all.

4:12 But also in the 2002 2003 season,

4:15 what the raisin growers did get to sell went for $745 bucks a ton.

4:20 In the next season, when they had to give the government 30%,

4:22 they sold their own for $810.

4:25 So arguably, the system was still working, but for Marv, it had gone too far.

4:31 So in 2002, he stopped giving the A department their cut.

4:34 Other growers get suspicious and send Rocky Pipkin PI

4:37 to videotape how many raisins are going in and out.

4:39 And they confirm that while every other grower

4:41 is sending the agreed upon portion to the reserve,

4:44 Horn is selling 100% of his crop at a price

4:46 point that only exists because everyone else is following the rules.

4:50 Eventually, the government finds him for the market

4:52 value of the raisins he didn't hand over,

4:54 plus a civil penalty, and he sues them,

4:56 claiming that the reserve is unconstitutional.

4:59 The issue proceeds to divide California's raisin grower community.

5:02 Some who feel just as hamstrung by the mandatory

5:04 reserve support Horn and even donate to his legal defense.

5:07 Others want to see the fine paid because Horn profited handsomely

5:11 off of the rest of them following the rules he flouted.

5:13 The case drags on through court after court after court

5:17 until finally in 2015 the Supreme Court rules in Horn's favor,

5:22 ending the raisin reserve for good.

5:24 In their 81 decision, the Supreme Court found that the rules around the raisin

5:28 reserve were in violation of the Constitution's fifth amendment,

5:31 which says, among other things, that the government can't take

5:33 your private property without quote just compensation.

5:36 That amendment, as Justice John Roberts mentions in the majority opinion,

5:40 has its roots in the Magna Carta,

5:42 which centuries earlier and an ocean away protected

5:45 people from having their crops taken away without payment.

5:47 As is part for the course with SCOD's decisions,

5:50 they spilled [music] a ton of ink explaining why exactly

5:53 the government had no right to demand 47% of your raisins,

5:56 even if the whole raisin club came together and decided you'd

5:59 be better off if the government had 47% of your raisins.

6:01 [music] And we've hardly got the time to get into all of it.

6:04 But the court said that the promise that you maybe might get some

6:07 money back for the reserve raisins wasn't

6:09 enough to count as quote just compensation.

6:12 and that while the government is allowed

6:13 to tighten the raisin supply by limiting production,

6:15 the fact that they were literally

6:17 taking existing raisins made this unconstitutional.

6:20 When it comes to fixing the price of raisins,

6:22 the court said the ends simply do not justify the means.

6:26 But the truth is, the raisin reserve was all but dead before SCOTA's killed it.

6:30 The raisin administrative committee hadn't actually had the government

6:33 to take a cut of everyone's raisins since 2009.

6:36 So for about 6 years before the reserve was rendered unconstitutional,

6:39 it was [music] rendered obsolete.

6:41 The growers, simply put, were growing an appropriate number of raisins.

6:45 Between the year 2000 and the Scotas decision,

6:47 a few thousand acres of California farmland per year

6:50 were already turning to more valuable crops like citrus,

6:52 almonds, and pistachios.

6:54 And many of the grapes being grown were being made

6:56 into more popular [music] products than raisins, like juice or wine.

6:59 Meaning over supply wasn't the kind of issue

7:01 it had been in [music] the years past.

7:03 So the judicial striking down of the reason

7:05 Reserve was less the destruction of a thing

7:07 and more the guarantee that the thing that hadn't

7:09 existed in a while wasn't allowed to come back.

7:12 And you know what?

7:13 Sure, let freedom ring.

7:15 I guess in uncertain times,

7:17 it's a great comfort to know Americans' constitutional right to sell

7:21 whatever fraction of our raisins we see fit is safe and sound.

7:26 And hey, once you've gone out and tasted

7:28 the sweet freedom of selling 100% of your raisins,

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