The Raisin Reserve: On the Way Out?

For many years I have used the California raisin market as an illustration of the effects of government intervention, even dressing up as a California raisin and dancing, as in the famous advertisement, to Marvin Gayes’ “Heard It through the Grapevine” on the lecture hall stage to show how crazy the policy is, as explained in this post. (Now that the ads are on YouTube I have retired my raisin costume, and simply show the ads in lecture.)  Under this intervention a group called the Raisin Administrative Committee takes an amount of raisins off the market and puts them into a “raisin reserve” reduce the supply and thereby increase the price of raisins.

But in the last few months, the strange practice has reached the national stage, with the Supreme Court hearing the case of a California farmer who refused to hand over his grapes and sold them instead. James Bovard wrote about it in a piece called “Dancing to the Beat of the Grapevine: The Raisin Farmers Seek Servitude Liberation.” He quotes Justice Stephen G. Breyer as saying “I can’t believe that Congress wanted the taxpayers to pay for a program that’s going to mean they have to pay higher prices as consumers,” with Justice Elena Kagan adding that it is “the world’s most-outdated law.”

Last month NPR’s planet money did a wonderful piece on the farmer and the Committee called “The Raisin Outlaw Of Kerman, Calif,” which is a must-listen-to. For video I recommend this CNBC piece Farmer Raisin Hell. Really great titles and a lot of outrage. Signs that the Raisin Reserve may be nearing its end.

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