The Raisin Outlaw Of Kerman, Calif. : Planet Money In most industries, competitors getting together and conspiring to control supply of a product is illegal. But in the raisin world, the law actually says competitors have to work together. It's going against your competitors that can get you in trouble.
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The Raisin Outlaw Of Kerman, Calif.

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The Raisin Outlaw Of Kerman, Calif.

The Raisin Outlaw Of Kerman, Calif.

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


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.


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


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 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.


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.

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