Agricultural issues

Matters relating to the production of food crops from the land and the raising of livestock.

As long as agriculture was largely a subsistence activity, it was generally held to be a matter of purely local concern in which the states had exclusive jurisdiction. However, as agriculture became increasingly commercialized, especially after the Civil War (1861-1864) when the national railroad network was completed, matters affecting agriculture through commerce in farm products came increasingly to the Supreme Court’s attention.

The first of the agriculture-related cases to come before the Court were the Slaughterhouse Cases[case]Slaughterhouse Cases[Slaughterhouse Cases] (1873). Louisiana butchers protested a law that granted monopoly status to a meat-slaughtering facility, claiming it was unconstitutional because it violated individual rights guaranteed by the Thirteenth and Fourteenth Amendments. The Court upheld the Louisiana law; however, a justice in a dissenting opinion stated his view that the Fourteenth Amendment offers protections from state interference.

The second case before the Court involved the regulation of tradeCommerce, regulation of in agricultural commodities, specifically through regulation of grain elevators. Many state legislatures, especially in the Midwest, were dominated by politicians representing farming interests. Those interests, often organized through societies of farmers known as the Grange, pressed for regulation of the large commercial interests that affected the sale of their agricultural crops. The most important of these were the proprietors of grain elevators, generally railroads, who held a local monopoly. Under pressure from the farmers, states passed legislation regulating the actions, including price setting, of the grain elevators and the railroads that owned them. The railroad owners believed that such laws restricted the freedom of contractContract, freedom of and should be beyond the reach of state laws because the railroads that owned the elevators were engaged in interstate commerce. They appealed to the courts, and the issue reached the Court in the Granger cases, notably Munn v. Illinois[case]Munn v. Illinois[Munn v. Illinois] (1877). Although the Court had long tenaciously defended freedom of contract, in this case it allowed the state regulation of businesses that were “affected with the public interest,” a category that included grain elevators. In another important decision, Wabash, St. Louis, and Pacific Railway Co. v. Illinois[case]Wabash, St. Louis, and Pacific Railway Co. v. Illinois[Wabash, St. Louis, and Pacific Railway Co. v. Illinois] (1886), the Court ruled that the power to regulate businesses such as railroads engaged in interstate commerce belonged properly with the federal government, and some experts believe that this decision triggered the passage, by Congress, of the Interstate Commerce Act of 1887.

The Court, although generally conservative in its outlook, responded to the demands of society for the regulation of commercial products that involved the health and safety of the public. The Pure Food and Drug Act of 1906 was upheld by the Court in Hipolite Egg Co. v. United States in 1911. In Hipolite, the Court gave expression to a federal police power when the commerce in question was undeniably interstate. In 1915 in Hadacheck v. Sebastian, the Court ruled that the states had the power to condemn diseased animals, even without compensation.

In Frost v. Oklahoma Corporation Commission[case]Frost v. Oklahoma Corporation Commission[Frost v. Oklahoma Corporation Commission] (1929), the Court indirectly recognized the special status of farm cooperatives. Although the Court ruled in favor of Frost, an individual, instead of the cooperative cotton ginning company licensed to compete with Frost by the Oklahoma Corporation Commission, it recognized that true agricultural cooperatives enjoyed certain freedoms that did not extend to private companies operating for profit.

New Deal Legislation

New DealAgricultural issues played a prominent part in the Court’s reaction to the attempts of Franklin D. Roosevelt to deal with the effects of the Depression. In 1933 Congress passed the Agricultural Adjustment Act,Agricultural Adjustment Act of 1933 which paid farmers to take land out of production, in an effort to reduce the supply of farm products so that prices would rise. In United States v. Butler[case]Butler, United States v.[Butler, United States v.] (1936), the Court ruled the act to be unconstitutional on the grounds that it was being used to transfer income from one segment of society to another, in the process depriving the states of the authority retained by them under the Constitution. The Court, by a 6-3 majority, held that this kind of regulation was inappropriate because agriculture was essentially a local activity.

Roosevelt brought about an effective reconstitution of the Court by replacing seven of its justices between 1937 and 1941, exchanging the Court’s extreme conservatism for a more liberal outlook. Even before the shift, in St. Joseph Stock Yards Co. v. United States[case]St. Joseph Stock Yards Co. v. United States[Saint Joseph Stock Yards Co. v. United States] (1936), the Court had indicated that it would accept some agricultural regulations if the Agriculture Department would develop procedural rules that applied uniformly, thus assuring the fairness of administrative actions. In 1938 Congress passed a second Agricultural Adjustment Act,Agricultural Adjustment Act of 1938 funded by the U.S. Treasury, not by taxes levied specifically on some special interests. The Court in effect approved the second Agricultural Adjustment Act in Mulford v. Smith[case]Mulford v. Smith[Mulford v. Smith] (1939). In addition, in Wickard v. Filburn[case]Wickard v. Filburn[Wickard v. Filburn] (1942), the Court effectively granted the federal government the right to regulate any agricultural operations, even those that clearly did not involve interstate commerce, on the grounds that even agricultural commodities withheld from the market had an implicit effect on the national market in agricultural products. In the same year, in United States v. Wrightwood Dairy Co., the Court allowed federal regulation of intrastate commerce when such commerce directly related to interstate commerce.

After 1937 the Department of Agriculture developed an elaborate system of market regulation of the commerce in agricultural products, to which the Court made few objections. The Court, however, did police some agricultural operations that appeared to be taking advantage of exemptions from antitrust rules provided as long ago as the Capper-Volstead ActCapper-Volstead Act (1922) for farm cooperatives. For example, in United States v. Borden Co.[case] Borden Co., United States v.[Borden Co., United States v.] (1939), the Court ruled that a cooperative lost its antitrust exemption if it included members who were not primary agricultural producers, and again, in Case-Swayne v. Sunkist Growers[case]Case-Swayne v. Sunkist Growers[Case-Swayne v. Sunkist Growers] (1967), that “agriculture” meant primary agricultural producers. Because Sunkist included commercial packing houses among its members, it did not qualify as an exempt agricultural cooperative. In Maryland v. Virginia Milk Producers Association[case]Maryland v. Virginia Milk Producers Association[Maryland v. Virginia Milk Producers Association] (1960), agricultural cooperatives using predatory pricing lost their antitrust protection, and in Farmers Reservoir and Irrigation Co. v. McComb[case]Farmers Reservoir and Irrigation Co. v. McComb[Farmers Reservoir and Irrigation Co. v. McComb] (1949), the Court ruled that an irrigation business did not qualify as “agriculture.”

Marketing orders (under which producers of various agricultural products have been effectively compelled to join cooperatives that set prices for the product and exclude nonmembers from participation) have generally passed Court muster, but some orders have produced controversy and in a few cases litigation. The system provides for the participants to underwrite, from their sales receipts, some of the costs of administering the marketing orders. One of the most controversial of the marketing orders has been that governing milk, which attempted to set prices based in part on the distance of the ultimate market from the primary dairy region of the United States in Wisconsin and Minnesota. This system has led to complaints from some dairy groups that they cannot recover higher production costs because the pricing is tied to the primary dairy area where production costs are low. In Massachusetts, to stem the loss of dairy farmers, the Massachusetts Dairy Equalization Fund was created to help Massachusetts dairy farmers meet the higher costs of dairying in New England. However, in West Lynn Dairy v. Healy[case]West Lynn Dairy v. Healy[West Lynn Dairy v. Healy] (1994), the Court ruled that it was impermissible to have a system that helped farmers in one state at the expense of those from other states.

Another challenge to the system of marketing orders was brought in Dan Glickman v. Wileman Bros. and Elliott, et al.[case]Dan Glickman v. Wileman Bros. and Elliott, et al.[Dan Glickman v. Wileman Bros. and Elliott, et al.] (1997), in which it was alleged that the assessments imposed under the orders, used in part for generic advertising of the crop, infringed on the First Amendment rights of those required to pay the assessments. In a 5-4 decision, the Court upheld the marketing orders, including the assessment to pay for generic advertising, because it did not push any particular producer’s product and did not push any particular political viewpoint. Moreover, the Court found that the marketing orders did not prevent any participant from advertising his or her own particular products or viewpoints. Hence the marketing orders did not violate the First Amendment guarantee of free speech.

Agricultural issues Summary