Horne v. USDA, Canadian Style: Quebec Maple Syrup Cartels Seizes Black Market Maple Syrup

August 20th, 2015

In Horne v. USDA, the Supreme Court found that a New Deal-era program, where the federal government seizes excess raisins to stabilize market prices, constituted a taking. It seems Quebec  has a similar program in effect for maple syrup. The Federation of Quebec Maple Syrup Producers was authorized by the courts to seize any black-market maple syrup that was not sold at the correct price.

It is effectively a cartel, approved by the provincial government and backed by the law. In 1990, the federation became the only wholesale seller of the province’s production, and in 2004, it gained the power to decide who gets to make maple syrup and how much.


And what happens if a producer doesn’t comply? The cartel will send guards to take it.

For weeks, security guards, hired by the Federation of Quebec Maple Syrup Producers, kept watch over Mr. Hodge’s farm. Then one day, the federation seized 20,400 pounds of maple syrup, his entire annual production, worth about 60,000 Canadian dollars, or nearly $46,000.

The incident was part of the escalating battle with farmers like Mr. Hodge who break the law by not participating in the federation’s tightly controlled production and sales system.

Talk about a sticky situation! Without their syrup, the black-market producers are tapped out, and stripped of their source of income. We’re not talking about a drop in the bucket here. This cartel has really tightened the spigot. Are my puns too sappy? (I’ll be here all night).

Unsurprisingly, most members of the cartel are happy with the arrangement, as it has jacked up the price of their product:

“Three-quarters of our members are happy or very happy with what we are doing,” said Simon Trépanier, the federation’s executive director. “Those producers are living through the maple syrup production. It’s their main income because we present them with a stable income.” …

In 2003, a majority of federation members voted to make production quotas mandatory, meaning farmers could sell only a certain amount each year. Farmers are required to sell all of their syrup through the federation or its designated agents.

Under the system, prices have risen to 2.92 Canadian dollars a pound for the highest grades of syrup, from 2.14 Canadian dollars in 2004. In American stores, a pint goes for about $10. The shift has helped turn an annual ritual into a full-time occupation for many Quebec farmers.



And yes, there is a maple syrup strategic reserve.

Then in 2012, $18 million of maple syrup was stolen from the global strategic reserve, a warehouse where the federation stockpiles the sweetener. Police arrested more than two dozen people in the heist, the first of whom is expected to go on trial in November. … Most of the world’s syrup passes through the new and more secure global strategic reserve in Laurierville, Quebec, which opened after the heist. …

To keep prices high, the federation enforces strict quotas for the province’s 7,400 producers. Instead of flooding the market during years with bumper crops, all syrup produced beyond that amount is stored in the federation’s warehouse, which helps prop up prices by limiting supply. When seasons are lean, it releases the syrup, to maintain stable supply and pricing. (Sales of small containers to consumers at farms are exempt from the system.

But not Mr. Hodge, who, like the Hornes, doesn’t want anyone tell him what he can sell and where.

Mr. Hodge is similarly intransigent. At this point in the season, Mr. Hodge would normally have sold his syrup, turning his attention to his cattle and other crops. But this year he had nothing to sell. He believes that farmers should be allowed to set their own level of production and sell directly to large buyers, regardless of what the law says.

“They call us rebels, say we’re in a sugar war or something. I’ve heard rumors of that,” said Mr. Hodge, at his farm in Bury, Quebec.

“Yeah, I guess you could call it that.”

“Well, I don’t accept the system because I don’t believe in not being able to sell our product,” he said. “We just think that that product is ours. We bought the land. We’ve done all the work. Why should we not be able to sell our product the way we want as long as we legitimately put it on our income tax?”

And where does the unhappy owner want to go? To where the 5th Amendment applies!

“It’s a good thing that I’m not 35, 40 years old because I’d pack up all my sugar equipment that’s movable, and I’d go to the United States — oh yes, in a minute, in a minute,” said Mr. Hodge, 68.

It’s like OPEC for maple syrup.