The Raisin Mavens

by John Lawrence

For millions of Americans, the greatest controversy involving raisins is how many are in a box of cereal or bag of trail mix.  Even the maddening marketing of the little dried grapes as dancing entertainers a generation ago failed to capture the public’s imagination for long.  So I admit it is chancy, at best, to write about raisins.

Except that raisins are so much more than dried grapes, especially now, when they have become central players in an ongoing debate about the allocation of power, money and water, that most vital of all resources.

There is some history to my fascination to the raisin revolt launched by an unlikely revolutionary, Marvin Horn.  Horn is the California raisin rancher who has chosen to defy the dictates of the Raisin Administrative Committee, a 64-year old federally-sanctioned, industry run board that decides how many raisins Mr. Horn can legally sell.  

“What!” you cry.  “Somebody is telling a hardworking, salt-of-the-Earth raisin farmer that he can’t take his shriveled little grapes to market and sell them?” What is this – one more example of left-wing, Obama-style socialism intruding into the private marketplace and dictating the supply of essential commodities? First health care, now raisins!

Well, actually no.  I have no inside knowledge, but I am going to go out on a vine here and bet President Obama has never really focused on the details of Marketing Order 989.  In any event, he has no culpability in the raisin revolt that I am aware of.

The conspirators who are manipulating the raisin crop are none other than raisin growers themselves, authorized by a New Deal era federal agricultural law to organize their industry, manipulate the crop, maximize profits, and control the flow of fruit to market — all, of course, in the name of “protecting the consumer.”  (There is one consumer among the 47 members on the Raisin Administrative Committee.) To accomplish their mission of consumer protection, they are challenging one of their own, Horn, who has insisted that other growers, i.e., his competitors, should not be empowered to restrict his ability to market the crop he produced. 

I have seen this movie before.  Back in the very early 1980s, I was chief of staff for Congressman George Miller of California, who has made a career of fighting for the modernization of federal water policy.  Since a hugely disproportionate amount of the heavily subsidized water impounded, transported and sold by the U.S. Bureau of Reclamation in California goes to support irrigated agriculture, often to grow crops that are water-consumptive, subsidized or surplus, Miller has earned the enmity of much of the state’s farm community, especially in the bountiful Central Valley.

So it happened that Miller’s office received a call one day from a small, Harvard-educated orange grower named Carl “Skip” Pescosolido – not a grower of small oranges (which might have been a relevant issue as the story unfolded) but a fairly small player in the world dominated by the Sunkist and Pure Gold cooperatives.  Pescosolido was being bullied by the Navel Orange Administrative Committee, which was sanctioned by the same federal law allowing certain producers of food to create government-sanctioned cartels which would determine the quantity product that could be sold on the open market.  In The Grapes of Wrath, published half a century earlier, John Steinbeck had described how millions of pounds of oranges had been kept rotting in warehouses to keep prices up, even as people were starving.  

The orange powers warned Pescosolido not to sell a substantial portion of his crop;  tons of good quality fruit had to be diverted, allegedly to ensure the quality and volume of those that found their way onto the grocers’ shelves.  Also to keep prices artificially high, which the orange board admitted was one of its goals.

Pescosolido was not a predictable ally of Miller, a devout environmentalist despised by the farm community of which Pescosolido was a proud member.  In fact, Pescosolido was a conservative Republican, a free marketer who was furious that anyone – let alone his competitors – could dictate how he ran his business.  Miller was only too happy to link arms with Pescosolido, and as Miller’s water policy wonk, I shortly found myself standing alongside Skip out in the broiling California sun looking at mountains – and I am not exaggerating in the use of that term – of oranges left to rot in the desert on orders of the orange cartel.  Including Skip’s oranges.

I also visited the offices of the offices of the Navel Orange Administrative Committee where I learned that Pescosolido had it all wrong: oranges were being kept off the market because they were too small, or damaged, or otherwise unsuitable for sale.  Some were diverted to be crushed into juice, some were fed to cattle.  But one thing was for certain, according to the orange bosses: they were unsuited to human consumption.  Which was interesting because when we had Pescosolido box up some of his prohibited fruit and send it to Washington, where Miller served it to unsuspecting legislators in the Members Dining Room, we didn’t have a single complaint.  Until we announced what we had done, which brought angry denunciations from the orange directorate.

These flow-to-market restrictions were supposed to be modified following the war of the oranges, but as so often seems to be the case with agriculture policy, the big farm interests flexed their muscles to prevent congressional and administrative reforms.  In 1983, flow to market restrictions from the lemon bosses resulted in 20 million cartons being destroyed or abandoned.  In fact, more lemons were diverted from the market that year than sold, forcing the importation of foreign lemons.

So, over 30 years later, here is Marvin Horn and the raisin revolt.  According to the reports on NPR, the raisin politburo is not taking Marvin’s protest lying down; they’ve gone to war with him, hiring detectives to spy on his activities, and hauled him into federal court.

Unless you are an aficionado of the dried grape, perhaps you think this entire issue has no relevance to you.  You would be wrong, and not only because such practices limit consumer choices and artificially plump up prices.

Miller asked the General Accounting Office in 1981 to study whether any of the oranges being kept from consumers might have been grown with federally supplied irrigation water.  That water is heavily subsidized by the same taxpaying consumers who were thoughtfully being protected from orange oversupply.  While neither GAO nor the Bureau of Reclamation (which runs the Central Valley Project) could identify which oranges in the box were the progeny of federal irrigation water, GAO concluded that of the 83,000 tons of oranges in the 1980-1981 year diverted to cattle feed, 72,000 tons of that total were grown on trees irrigated with taxpayer subsidized water.  That’s nearly 90%.

So, taxpayer money was being spent to subsidize water that was used to irrigate farms, the yield of which was destroyed or diverted so that fruit prices for consumers would be higher.  That, in a nutshell (or orange rind) describes our misguided farm and water policies.

Now the reason this is highly relevant is not just because of Farmer Marvin’s ongoing battle with the raisin mavens, but because the West is going through a massive drought that is going to become chronic thanks to of climate change.  The aforementioned Bureau of Reclamation just announced the deepest reductions in releases from Lake Powell in history.  Those who are addicted to the federally supplied subsidies are demanding that taxpayers pretend this is 1935 or 1955, when interest-free money was flowing like water for public works projects, and build – get ready – tens of billions of dollars in new water projects to deliver more subsidized water to continue to grow not only vital food and fiber, but also crops we are subsidizing others to grow, that are surplus, or that farmers won’t be allowed to sell. 

There are many proven and cost-effective alternatives to building dams, canals, diversion tunnels and the like including recycling, conservation (including improvement of aging water infrastructure), waste water reuse and groundwater replenishment.  Some areas, like urban areas in southern California, see the likelihood of huge new projects evaporating and are embracing more modern water management strategies, but there is still massive resistance in agriculture (which uses more than 70% of water in California) and water bureaucracies like the Bureau of Reclamation.  Congress shares a big part of the blame, failing to use longstanding authority to fund water recycling projects that could reduce the need for costly and controversial storage and transportation facilities which, in any event, face decades of delays because of financial, environmental and legal complications.

Hopefully Marvin Horn and the raisin revolution will once again focus attention on the need for serious reform of agriculture and water policies, reforms that will focus on the legitimate needs taxpayers and consumers instead of mainly catering to the implausible demands of special interests.  Perhaps those fiscal conservatives running the House of Representatives, the ones who can’t figure out how to pass a farm bill without lavishing subsidies on farmers and denying food to hungry Americans, will end once and for all the right of special interest cartels to dictate how private farmers market their crops.  Maybe, but don’t count on it.  Two years after Miller’s revelations about the navel orange marketing order, Congress by law prohibited the Office of Management and Budget from examining the impact of marketing orders.  That was one year after Skip Pescosolido had died in a car accident.  He was 55.

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