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Quote of the Day - The man who acquires the ability to take full possession of his own mind may take possession of anything else to which he is justly entitled. - Andrew Carnegie

Court Rules Farm Subsidies Are Not Property Interests Compensable In Eminent Domain

You've probably heard a number of complaints about entitlements to welfare.  You know the rant:  "Welfare is a privilege, not an entitlement.  Go get a job!"  Keep that in mind when you read this case about peanut farmers who lost farm subsidies for their peanut crops when Congress changed the Farm Bill for the umpteenth time since the 1930s.  Don't get me wrong here - I used to live on a farm and be married to a farmer who received them - I think farm subsidies are necessary, as are tariffs on hard goods.  My point is that sometimes we forget the plank.  (It is Sunday, you know.)

Here's the deal:  in the course of several amendments to a farm bill passed in the early '30s in response to the Depression, Congress established peanut quotas that applied to farmers who had been tilling the soil, growing peanuts for profit.  Those quotas allowed farmers to get low-interest, non-recourse loans secured only by their crops. The loan rates from those loans could be assigned or leased to other farmers.  It essentially encouraged sharecropping, where one farmer farms and the other who used to farm now just collects money.  From the government.  The net effect of the program was that it kept peanut prices artificially high.  Then, in 2002, Congress changed the law and limited the quotas only to those farmers who were still tilling the soil.  The quota benefits and loan rates were no longer assignable or could be leased, and those "farmers" who had not been farming lost out. 

Peanut farmers were upset at the loss of their money, which they deemed a property interest, protected by the Fifth Amendment.  It's those last two words:  "just compensation," though, that really frosted them.  They wanted the government to pay them for the loss of the money that Congress took away from them.   Read that last sentence again, and you'll understand why the court decided the way it did.

The Court of Federal Claims (side note here:  doesn't that yellow border look suspiciously like this yellow border? - are you listening NatGeo?) ruled that the peanut farmers did have a property interest in the quotas, but that interest was not compensable under the Fifth Amendment.  The court said the farmers couldn't recover "because the property interest represented by the peanut quota is entirely the product of a government program unilaterally extending benefits to the quota holders, and nothing in the terms of the statute indicated that the benefits could not be altered or extinguished at the government's election."  

In other words, it's not an entitlement.

Posted by J. Craig Williams on 8/28/2005 at 10:39 Comments (0)


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