California’s Oranges of Wrath
Charity begins at home. So does free trade. And sometimes there is a connection between the two. According to some estimates, agricultural subsidies, tariff barriers and the like raise the food bill for a U.S. family of four by as much as $500 a year. But there is reason to hope that one monument to socialism in the allegedly open market may be about to crumble.
For decades, a private citrus cartel operating with government authority has restricted the amount of fruit that California growers can bring to market. By keeping quantities artificially low, the cartel has kept prices artificially high. According to the Agricultural Marketing Agreement Act of 1937, quotas have been set weekly for navel oranges by the Navel Orange Administrative Committee, which is dominated by Sunkist Growers Inc., the Sherman Oaks-based cooperative that represents 60% of California and Arizona growers. Growers who exceed their committee-determined quota become, quite literally, criminals. To obey the law, they must either destroy their oranges, turn them into animal feed or (a step that is impractical with navel oranges) “juice” them (turn them into orange juice). A separate administrative committee performs the same “service” for the lemon market.
Happily for consumers as well as for growers (and farm workers) who would like to bring more of their crop to market even if prices drop, the cartel quotas were suspended last February by President Bush as part of his general suspension of federal regulations. Under lobbying pressure, the Agriculture Department quietly reinstated the quotas. On Dec. 14, Agriculture Secretary Edward R. Madigan suspended them again. In a last-ditch effort to keep the captive market captive, Sunkist persuaded U.S. District Court Judge Gerhard Gesell to issue a temporary restraining order against Madigan. A final decision is expected soon.
The cartelization of the California citrus market and the resulting destruction of fruit has been a scandal since John Steinbeck wrote about it in “The Grapes of Wrath.” With a bumper crop coming in, one consumer group predicts that 1.3 billion pounds of oranges may have to be trashed if quotas are reimposed. We urge Judge Gesell to lift his restraining order. California can do without cartels.
