Posts tagged Raisins
The raisin law.

The US Supreme Court hearing regarding raisins is not a public matter that one reads about very often in the daily press, but this year is an exception. The current raisin related news comes as a result of the old raisin law that came to life in 1937 (The Great Depression era) and has been obligating US raisin producers to hand the US government a part of the yearly crop of this commodity for which government could compensate the producer or not. This law binding "government seized" part of raisins' crop is not trivial and could be even as high as 47% of the total yearly crop, depending on the year. The main purpose of this federal law was price stabilization in order to keep prices of raisins over years as steady as possible. The famous Adam Smith's "invisible hand" had been aided by the government intervention to bring higher benefits to the society. But did it really help? Supposedly this law has been set up in order to benefit producers and processors of raisins, to soften price fluctuations. Consumers' welfare? Well, nobody mentioned that. Not everybody agrees that this law has really helped all raisin producers. Some claim that this policy imposed unnecessary hardship on at least some of them and has been violating the Fifth Amendment to the Constitution of the United States that says that the government should provide a "JUST COMPENSATION" when it takes "PRIVATE PROPERTY FOR PUBLIC USE".

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