The Raisin Outlaw Of Kerman, Calif.

The Raisin Outlaw Of Kerman, Calif.

9:39pm Aug 09, 2013
Raisin farmer Marvin Horne stands in a field of grapevines planted next to his home.
Raisin farmer Marvin Horne stands in a field of grapevines planted next to his home.
Gary Kazanjian/AP

Meet Marvin Horne, raisin farmer. Horne has been farming raisins on a vineyard in Kerman, Calif., for decades. But a couple of years ago, he did something that made a lot of the other raisin farmers out here in California really angry. So angry that they hired a private investigator to spy on Horne and his wife, Laura. Agents from a detective agency spent hours sitting outside the Hornes' farm recording video of trucks entering and leaving the property.

What did the Hornes do to become the subject of a surveillance campaign? They sold raisins. More specifically, they sold all the raisins they produced.

In most other industries, selling all the goods you can make is just good business. But in the raisin world, things are different. In the raisin world, this can be illegal.

The decision about how many raisins should be sold to the public isn't supposed to be made by individual farmers working on individual farms across California. It's supposed to be made by a group — the Raisin Administrative Committee. The committee gets together regularly to decide how to market the raisins of California, and they set grades and standards for California raisins. Another, more unusual, part of their work is determining how many raisins to sell to the public.

Each year the committee uses an equation to decide just how many raisins to release out into the world. If they don't think the demand is high enough for all the raisins made that year, they tell raisin farmers to turn over or divert some of their raisins into something called the raisin "reserve."

Generally, the committee only holds back raisins when there's a big crop. If lots of raisins are coming online, the committee worries that the price could collapse and that farmers could go out of business.

Once the Raisin Administrative Committee decides on the number of raisins to release to the public, it becomes the law of the land. The raisin committee gives a recommended number to the U.S. Department of Agriculture, and the department typically approves it.

If the committee recommends a lower number and any farmer tries to sell 100 percent of their raisins, it's against the rules and against the law.

Marvin and Laura Horne used to follow these rules and abide by the committee decision. But something happened years ago that made them decide to go outside the system: In 2002, the Raisin Administrative Committee voted for a particularly big diversion. Instead of letting the farmers sell all their raisins, they decided to divert a ton of them into the raisin "reserve" — 47 percent.

"A lot of we all jumped up and yelled, and said, 'No, it's crazy. What's the matter with you guys?' " says Marvin Horne. "It was no avail, and that's when I came home, and I talked with my wife, and we said, 'No, we're not going to deliver.' "

The Hornes knew if they didn't deliver to the raisin reserve, they might be breaking the law. So they started researching. They got a hold of the actual legislation where this is laid out, Marketing Order Part 989, and the Hornes say they found a loophole in the law. Loophole in hand, they set up their own packing operation a couple of years ago and started selling all their raisins.

The Raisin Administrative Committee does not agree with the Hornes' legal interpretation. They say the Hornes are breaking the law and should be punished.

What happened next is proof of how upside down the world of raisins is. For not agreeing to participate in behavior that in many other industries would be considered collusion, the federal government sued the Hornes for hundreds of thousands of dollars in uncollected raisins and fines. The case went all the way up to the Supreme Court before being kicked down to a lower appeals court.

The Hornes are awaiting a decision.

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Transcript

MELISSA BLOCK, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

AUDIE CORNISH, HOST:

And I'm Audie Cornish.

To set up this next story, we have a little sound from some surveillance footage. This is audio of farmers allegedly involved in an elaborate illegal scheme in the Central Valley of California. An investigator narrates over grainy video of the scene.

(SOUNDBITE OF VIDEO SURVEILLANCE)

UNIDENTIFIED MAN #1: This will indicate that they arrived with this vehicle yesterday afternoon.

CORNISH: The farmer is caught in the act of hauling what might be illegal contraband.

(SOUNDBITE OF VIDEO SURVEILLANCE)

UNIDENTIFIED MAN #1: California Transportation License...

CORNISH: The investigator records the license number. And in the video, the camera zooms in. The contraband is raisins, raisins in boxes about to be sold. That is the crime. These are ordinary California raisins, and what these farmers are doing in almost any other industry would be perfectly legal. But as NPR's Planet Money reporter Zoe Chace found, raisins are very different.

ZOE CHACE, BYLINE: In most industries, competitors getting together to form syndicates or cartels, to collude about holding supply off the market, that's illegal. In the raisin world, it's the opposite. Competitors working together is the law enforced by the government. The number of raisins out there and how much they cost, it is not simply a question of supply and demand. It's also the result of decisions made in this one room, specifically a second-floor conference room in a nondescript red building in Fresno, California.

UNIDENTIFIED MAN #2: All those in favor say aye.

UNIDENTIFIED GROUP: Aye.

UNIDENTIFIED MAN #2: Opposed. Motion carries. Thank you, Bob.

CHACE: This is the Raisin Administrative Committee, made up of raisin growers and raisin packers. And one of the things they decide in this room is how many raisins to release to the public and how many to hold off the market in a decision called diversion.

UNIDENTIFIED MAN #3: The recommendation that a diversion program not be...

CHACE: Some years these farmers decide to divert a portion of the raisin crop into a raisin reserve, lowering the supply of raisins out there and making the price higher than it probably would be otherwise. Once the Raisin Administrative Committee takes this vote and decides to keep some raisins off the market for the year, then that is it, that is the law of the land. If any farmer tries to sell 100 percent of his raisins, that's against the rules, against the law.

One farmer did that a decade ago, and he's still paying for it.

MARVIN HORNE: They said your money or your raisins, and we don't have the raisins, we already sold the raisins. So now they want the money, with penalties and fines, somewhere around a million and a half.

CHACE: Meet Marvin Horne, the raisin rebel, the raisin outlaw. He farms raisins on a vineyard just 20 minutes away from Fresno. Here's the story. About 10 years ago, the Raisin Administrative Committee voted on a particularly big diversion. Instead of letting the farmers sell all their raisins, they decided to divert some of them into the raisin reserve, actually a lot of their raisins, almost half.

HORNE: Forty-seven percent. A lot of us, we all jumped up and yelled and said no, that's crazy. What's the matter with you guys? And it was no avail, and that's when I came home, and I talked with my wife, and we said no.

CHACE: Marvin and Laura Horne, husband and wife raisin-farming team. They knew if they didn't hand over the raisins, they might be breaking the law. They weren't sure, though. They got a hold of the actual legislation and started researching. It's called Marketing Order 989. It goes back to the Great Depression and exempts raisin growers from certain anti-trust provisions.

LAURA HORNE: We sat many nights reading through it, and I'd read it, and he'd read it, and then we'd discuss it between us. I would have maybe a different point on some things than he would, and then we'd work it out to what we thought it meant.

CHACE: The Hornes say they found a loophole in the law. So they decided to sell all their raisins. The Raisin Administrative Committee did not agree with the Hornes' legal interpretation. They say we have the right to manage our supply of raisins, and we should. There are years when there are too many raisins. If they all got released onto the market, the price could plunge, farmers might go out of business.

So the committee hired a private investigator to case out the Hornes' operation. He's the one who made the surveillance tapes you heard in the beginning. Things got a little contentious. On one of the tapes, you see Laura Horne's mom in shorts and sandals marching up to one of the surveillance agents.

(SOUNDBITE OF VIDEO SURVEILLANCE)

UNIDENTIFIED MAN: Hello.

UNIDENTIFIED WOMAN: What the hell are you here for?

UNIDENTIFIED MAN: I don't think it's any of your business, ma'am.

UNIDENTIFIED WOMAN: Well, I think it is because that's my property there, and I'd like to know why you're filming it.

UNIDENTIFIED MAN: I can film anything I want...

CHACE: What happens next is proof of how upside down the world of raisins is. For not agreeing to participate in what in many other industries would be collusion, the government sued the Hornes for hundreds of thousands of dollars in raisins and late fees. The government won that case, so the Hornes took their case to another court. They lost again, they appealed, case went all the way to the Supreme Court.

The Hornes were encouraged at that point by Justice Kagan, who was widely quoted as saying: This just might be the world's most outdated law on the books. The Supreme Court refused to rule this year, kicked it down to a lower court, where ruling is expected in a few months. Zoe Chace, NPR News. Transcript provided by NPR, Copyright NPR.

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