SCOTUS Raisin Reserve Decision
August 12, 2015
Grower Reflects on SCOTUS Raisin Reserve Decision
By Charmayne Hefley, Associate Editor
The Supreme Court of the United States (SCOTUS) recently decided that California raisins held in reserve during heavy crop years belong to the government (under the Fresno-based Raisin Administrative Committee (RAC), a federal marketing order), and the government should pay growers for these raisins. Directly overseen by the United States Department of Agriculture (USDA), the RAC, created in 1949, is led by 47 growers and a public member.
Monte Schutz, a Fresno County raisin grower, as well as chairman of the executive committee of the RAC, said the recent decision by SCOTUS doesn’t make any sense. “The biggest problem I had with the decision is when Justice Roberts stated very clearly that the government took ownership of the raisins, and that was just not true—growers maintained ownership throughout,” Schutz noted. “And the committee, which is made up of growers and handlers, had complete control over when they sold the raisins and for how much. So I think they were mistaken that the government took control; while the government oversees our federal marketing order, we as a committee had control.”
Explaining how he thinks the Supreme Court got it wrong, Schutz said, “Personally I think it may have been the USDA lawyers who just didn’t explain it. The system is a little complicated, and I wasn’t in the courtroom, but I’m afraid they did not explain it properly. How they could conclude the government owned the raisins--is just completely wrong.”
“For the last five years, we haven’t used the reserve program at all because we are in a better balance right now than we were 13 years ago. At that time, the reserve was a tool to take care of the excess supply. We haven’t had to use it for the last five years, and we don’t intend on using it any time in the future. Although I would still like to keep that tool available, unfortunately, the Supreme Court has taken it away from us,” Schutz said.
“Now when we need to put the raisins in reserve, we have to consider, I assume, that the grower has to be compensated for them. But I do not know how the government can tell you at what price; the market dictates the price. That was the problem back then; the market was in a tough situation due to the oversupply, so we had to take less for those reserve raisins,” Schutz said. "Those raisin growers were paid less, but raisin prices did not spiral downward and the industry was kept in balance."
“Without the reserve program, the raisin price would have crashed, ending in a bigger disaster than what occurred.”
The Supreme Court reached its decision at the end of a long fight by raisin grower Marvin Horne, who held that he did not have to give his raisins to the reserve without fair compensation.