Did you know that Giant Panda cubs can be as small as a stick of butter? A panda mother is approximately 900 times bigger than her newborn cub, which can weigh less than 5 ounces. This is like an 8-pound human baby having a mother that weighed 7,200 pounds – this size difference may explain why so many panda cubs die from accidentally being crushed by their mothers. However, not everything is doom and gloom for the Giant Panda. Chinese officials have officially downgraded pandas from “endangered” to “vulnerable.” Although the International Union for Conservation of Nature re-labelled, the Panda as “vulnerable” in 2016, China wanted to make sure that the population of its national treasure continued to grow before downgrading the panda’s classification.
Although it seems as though pandas are thriving thanks to conservation efforts in China, not all animal species in China are so lucky. This week’s Ag Law Harvest takes a trip around the world to bring you domestic and international agricultural and resource issues. We take a look at court decisions, Congress’ latest actions, China’s struggle with African Swine Fever, and President Biden’s latest executive order.
Iowa Supreme Court Dismisses Raccoon River Lawsuit. Environmental organizations (“Plaintiffs”) filed a lawsuit against the state of Iowa and its agencies (“Defendants”) asking the court to compel Defendants to adopt legislation that would require Iowa farmers to implement practices that would help reduce the levels of nitrogen and phosphorus in Raccoon River. The Plaintiffs argued that Defendants violated their duty under the Public Trust Doctrine (“PTD”), which is a legal doctrine that requires states to hold certain natural resources in trust for the benefit of the state’s citizens. Defendants argued that Plaintiffs lacked standing to bring the lawsuit. The Iowa Supreme Court agreed with Defendants and found that a ruling in Plaintiffs’ favor would not necessarily remediate Plaintiffs’ alleged injuries, and therefore the Plaintiffs lacked standing to bring the lawsuit. The Iowa Supreme Court also found that Plaintiffs’ issue was a nonjusticiable political question. The political question doctrine is a principle that helps prevent upsetting the balance of power between the branches of government. Under the doctrine, courts will not decide certain issues because they are better suited to be decided by another branch of government. In this case, the court reasoned that Plaintiffs’ issue was better suited to be resolved through the legislative branch of government, not the judicial branch. The Iowa Supreme Court decision is significant because, as it stands, agricultural producers in the Raccoon River Watershed will not be required to adopt any new practices but the decision leaves it up to Iowa’s legislature to determine whether farmers should be required to adopt new practices under the PTD to help reduce nitrogen and phosphorus in Raccoon River.
U.S. House of Representatives’ spending bill increases focuses on climate action and environmental protection. Before the July 4th break, the United States House Appropriations Committee approved the first of its Fiscal Year 2022 (“FY22”) funding bills. Included in these bills is the agriculture funding bill, which will be sent to the House floor for full consideration. The bill provides $26.55 billion in the discretionary funding of agencies and programs within the USDA, FDA, the Commodity Futures Trading Commission, and the Farm Credit Administration – an increase of $2.851 billion from 2021. In total, the agriculture funding bill includes $196.7 billion for both mandatory and discretionary programs. The bill focuses on: (1) rural development and infrastructure – including rural broadband; (2) food and nutrition programs to help combat hunger and food insecurity; (3) international food assistance to promote U.S. agricultural exports; (4) conservation programs to help farmers, ranchers, and other landowners protect their land; (5) ag lending; (6) climate-related work to help research and remedy the climate crisis; and (7) enforcement of environmental programs. The agriculture spending bill will, however, have to be reconciled with any spending bill produced by the U.S. Senate.
U.S. House Agriculture Committee advances rural broadband bill. The House Agriculture Committee (the “Committee”) unanimously voted to advance the Broadband Internet Connections for Rural America Act (the “Act”), which would authorize $4.5 billion in annual funding, starting in fiscal year 2022, for the Broadband ReConnect Program (the “Program”) through fiscal year 2029. The existing Program is set to expire on June 30, 2022. To demonstrate Congress’ commitment to expanding rural broadband, the Program was only given $742 million in 2021. It is unclear whether the Act will be included in the infrastructure package that is currently being negotiated between Congress and the White House. Under the Act, the USDA must give the highest priority to projects that seek to provide broadband service to unserved communities that do not have any residential broadband service with speeds of at least 10/1 Mbps. The USDA will then prioritize communities with less than 10,000 permanent residents and areas with a high percentage of low-income families.
Small hog farmers in China no longer required to seek environmental approval. China is the world’s largest pork producer and over the past few years, its hog herds have been decimated. A deadly African Swine Fever (“ASF”) has wiped out about half of China’s hog herds, especially affecting small farmers. According to Reuters, China relies heavily on small farmers for its pork output, but because of ASF, small farmers have been left with little to no product and mass amounts of debts. Further, Chinese farmers are hesitant to rebuild their herds because ASF is an ongoing risk and farmers stand to lose everything if they continue to raise diseased hogs. Addressing these concerns, China’s agriculture ministry will no longer require small hog farmers to get environmental approval from the government before breeding their hogs. China hopes to reduce the costs and red tape for small farmers as China tries to incentivize small farmers to rebuild their hog herds. African Swine Fever is a highly contagious and deadly viral disease affecting both domestic and feral swine. The ASF poses no threat to human health but can decimate domestic hog populations. Germany has recently reported its first two cases of ASF in domestic hogs. Currently, ASF has not been found within the United States, and the USDA hopes to keep it that way. To learn more about ASF, visit the USDA’s Animal and Plant Health Inspection Service website.
President Biden signs executive order to reduce consolidation in agriculture. President Biden’s recent Executive Order on Promoting Competition in the American Economy seeks to address inadequate competition within the U.S. economy that the administration believes holds back economic growth and innovation. The Order includes more than 70 initiatives by more than a dozen federal agencies to promote competition. With respect to agriculture, the Order seeks to break up agricultural markets “that have become more concentrated and less competitive.” The Biden Administration believes that the markets for seeds, equipment, feed, and fertilizer are dominated by a few large companies which negatively impacts family farmers and ranchers. The Biden Administration believes that the lack of competition increases the costs of inputs for family farmers all while decreasing the revenue a family farmer receives. The Order directs the USDA to consider issuing new rules: (1) making it easier for farmers to bring and win lawsuits under the Packers and Stockyards Act; (2) prohibiting chicken processors from exploiting and underpaying chicken farmers; (3) adopting anti-retaliation protections for farmers who speak out about a company’s bad practices; and (4) defining when meat producers can promote and label their products as a “Product of the USA.” The Order also requires the USDA to develop a plan to increase opportunities for small farmers to access markets and receive a fair return and encourages the Federal Trade Commission to limit when equipment companies can restrict farmers from repairing their own farm machinery. Follow this link to learn more about President Biden’s recent Executive Order.
Following a flurry of activity before its break, the Ohio General Assembly can now enjoy a few lazy days of summer. While the legislature spent much of its energy passing the state budget, it also moved several bills affecting agriculture. Here’s the latest update on legislation that's moving down at the capitol.
Solar and wind facilities. We wrote earlier about S.B. 52, the wind and solar facility siting bill the legislature passed in late June. Despite pressure to veto the bill, Governor DeWine signed the legislation on July 12; its effective date is October 9, 2021. The new law requires developers to hold a public meeting in a community at least 90 days prior to applying for project approval, allows counties to designate restricted areas where wind and solar projects may not locate, sets up a referendum process for county residents to have a voice in restricted area designations, adds two community officials to the project review process at the Power Siting Board, and establishes rules for decommissioning of projects, including performance bonds.
Natural gas services. While communities will have a say in siting wind and solar facilities after S.B. 52’s passage, the opposite will be true for natural gas services. H.B. 201 guarantees that persons have a right to obtain natural gas and propane services, subject to municipal home rule authority and regulatory oversight. The bill prohibits political subdivisions from limiting or preventing gas and propane services within its boundaries. Governor DeWine signed the bill on July 1 and it becomes effective on September 28, 2021.
State budget. It took a good while, but the governor signed the state budget bill, H.B. 110, on June 30 and it took effect on July 1. Highlights of agricultural provisions in the bill include:
- H2Ohio. Requires state agencies that prepare the already mandated annual report on the H2Ohio fund to present the report to the Senate and House finance committees each year. ORC 126.60(D).
- Ohio Proud. Allows the Ohio Department of Agriculture (ODA) to sell merchandise that promotes the Ohio Proud program, and to use proceeds for the Ohio proud, international, and domestic market development fund. ORC 901.171(B) and (C).
- Liming inspections. Allows the ODA director to enter into agreements with private parties for the inspection, sampling, and analysis of liming material and allows those parties to enter onto private and public land for inspections. ORC 905.59.
- OSU Extension. Establishes a farm production, policy, and financial management institute in OSU Extension to address the integration of farm production practices, agricultural marketing, farm policy, and financial management challenges for farm owners and managers, lending agencies, ag teachers, and OSU professionals and provides the institute $250,000 each year for two years. ORC 3335.38.
- Farmers market inspections. Removes the option for a farmers market to register and be inspected as a farm market with ODA. ORC 3717.221(A) and (B).
- Wine taxes. Makes the 2 cents per gallon wine tax revenue credited to the Ohio Grape Industries Fund permanent. R.C. 4301.43.
- Southern Ohio Agricultural and Community Development Foundation. At the end of 2021, abolishes the foundation and its board, which was established in 1998 through the Tobacco Master Settlement Agreement with tobacco manufacturers. Any remaining funds will transfer to the Ohio Proud Marketing Fund.
- H2Ohio. Appropriates $49.3 million each year to the H2Ohio program for 2022 and 2023.
- Farmland preservation. Allocates $500,000 for the purchase of agricultural easements in 2022 and 2023.
- Soil and water phosphorus program. Allocates $10.7 million in 2022 and 2023 for programs to assist in reducing phosphorus in the Western Lake Erie Basin.
- SWCDs in Western Lake Erie Basin. Allocates $3.85 million to support Soil and Water Districts in the Western Lake Erie Basin in complying with former S.B. 1 and assisting with soil testing, nutrient management plan development, manure management technologies, filter strips and water management.
Bills on the move
Beginning farmers. H.B. 95 finally passed the House on June 28, 2021—it was introduced in February and lagged in the last legislative session. The proposal allows individuals to be certified as beginning farmers either through USDA or a certification program by ODA, Ohio State or Central State. Certification criteria includes: farming in Ohio less than 10 years, having a net worth of less than $800,000, providing a majority of labor and management for the farm, demonstrating adequate knowledge of farming, submitting projected earning and profits, demonstrating that farming will be a significant source of income, and participation in an approved financial management program. The bill would establish two income tax credits, one for owners who sell land and agricultural assets to certified beginning farmers and another for beginning farmers that attend a financial management program. The bill now requires Senate approval.
Slow-moving vehicles. H.B. 30 had its first hearing before the Senate Transportation committee on June 23. The proposal passed the House in April. The bill aims to increase visibility of animal-drawn vehicles by changing marking and lighting requirements. The vehicles would have to display either an SMV emblem or reflective micro prism tape rather than reflective tape on the rear, a flashing yellow lamp at the top and rear, in addition to current lighting requirements.
Earning statements. A bill passed by the House on June 16 has been referred to the Senate Small Business and Economic Opportunity Committee. H.B. 187 would require all employers to provide employee with a written or electronic statement of the employee’s earnings and deductions for each pay period, to include total hours worked and hourly rate, total gross wages, amounts and purposes of addition or deductions from wages, and total net wages. The bill also establishes a request and violation reporting system for employers who fail to provide the statements.
Moratorium on animal feeding facilities. A bill introduced by two representatives from northwestern Ohio would affect new and expanding animal feeding facilities in the Maumee watershed. H.B. 349 would not allow the Ohio Department of Agriculture to approve a permit for a new construction or expansion of a “regulated animal feeding facility” if it is in the Maumee watershed and the director of ODA has determined that the spring load of total phosphorus for the Maumee River exceeded 860 metric tons and total dissolved reactive phosphorus exceeded 186 metric tons in the preceding calendar year. Regulated animal feeding facilities are those housing over 250 dairy cattle; 300 beef cattle; 3,000 piglets; 750 hogs; 25,000 egg layers; 37,500 meat chickens; 9,000 egg layers and meat chickens if on liquid manure handling system; 16,500 turkeys; 3,000 sheep and 150 horses. H.B. 349 was referred to the House Agriculture and Conservation committee on June 16, 2021.
"Farm Office Live" returns this summer as an opportunity for you to get the latest outlook and updates on ag law, farm management, ag economics, farm business analysis, and other related issues. Targeted to farmers and agri-business stakeholders, our specialists digest the latest news and issues and present it in an easy-to-understand format.
The live broadcast is presented monthly. In months where two shows are scheduled, one will be held in the morning and one in the evening. Each session is recorded and posted on the OSU Extension Farm Office YouTube channel for later viewing.
|July 23, 2021||10:00 - 11:30 am||December 17, 2021||10:00 - 11:30 am|
|August 27, 2021||10:00 - 11:30 am||January 19, 2022||7:00 - 8:30 pm|
|September 23, 2021||10:00 - 11:30 am||January 21, 2022||10:00 - 11:30 am|
|October 13, 2021||7:00 - 8:30 pm||Februrary 16, 2022||7:00 - 8:30 pm|
|October 15, 2021||10:00 - 11:30 am||February 18, 2022||10:00 - 11:30 am|
|November 17, 2021||7:00 - 8:30 pm||March 16, 2022||7:00 - 8:30 pm|
|November 19, 2021||10:00 - 11:30 am||March 18, 2022||10:00 - 11:30 am|
|December 15, 2021||7:00 - 8:30 pm||April 20, 2022||7:00 - 8:30 pm|
Topics we will discuss in upcoming webinars include:
- Coronavirus Food Assitance Program (CFAP)
- Legislative Proposals and Accompanying Tax Provisions
- Outlook on Crop Input Costs and Profit Margins
- Outlook on Cropland Values and Cash Rents
- Tax Issues That May Impact Farm Businesses
- Legal Trends
- Legislative Updates
- Farm Business Management and Analysis
- Farm Succession & Estate Planning
To register or to view a previous "Farm Office Live," please visit https://go.osu.edu/farmofficelive. You will receive a reminder with your personal link to join each month.
The Farm Office is a one-stop shop for navigating the legal and economic challenges of agricultural production. For more information visit https://farmoffice.osu.edu or contact Julie Strawser at email@example.com or call 614.292.2433
Tags: Farm Office Live, farm management, Farm Succession, Estate Planning, Farm Business, Dairy Production, Farm Tax, Agricultural Law, Resource Law
Perhaps it’s an overused phrase but “sometimes you win, sometimes you lose” has relevance to agriculture lately. It’s a fitting response to several new decisions from the federal courts. Some of the decisions align with positions advocated by agricultural interests but others do not. We wrote last week about a case in the “sometimes you lose” category--the Court’s ruling in favor of small refineries claiming exemptions from renewable fuels mandates. Several members of Congress have already proposed legislation that would nullify the Court’s decision in that case. A second loss came with a challenge to California’s animal welfare standards and a third with the court striking down a waiver of E15 ethanol blends. The sole win came with a challenge to a California statute allowing union organizing activities on private property. Here’s a summary.
California Proposition 12 – North American Meat Institute v. Bonta
The U.S. Supreme Court announced that it would not grant certiorari and review a decision by the Ninth Circuit Court of Appeals’ on California Proposition 12. Voters approved Proposition 12, the “Prevention of Cruelty to Farm Animals Act,” in 2018. The Act establishes housing standards for egg-laying hens, breeding hogs and veal calves and prohibits the confinement of animals in spaces that don’t meet the standards. Business owners and operators in California may not sell meat or egg products from animals that are not confined according to the standards. Standards for calves (43 square feet) and egg laying hens (1 square foot) became effective in 2020 while standards for breeding pigs and their offspring (24 square feet) and cage-free provisions for egg laying hens are to be effective beginning January 1, 2022.
The North American Meat Institute (NAMI) sought a preliminary injunction against Proposition 12 in 2019, arguing that it violates the Interstate Commerce Clause of the U.S. Constitution, which grants only Congress the authority to regulate commerce among the states. NAMI claimed that the Act establishes a “protectionist trade barrier” that would protect California producers from out-of-state competition and control conduct outside of its state borders.
Both the federal District Court and the Ninth Circuit Court of Appeals disagreed with NAMI. The appellate court affirmed the District Court’s conclusions that Proposition 12 is not discriminatory on its face and does not have a discriminatory purpose or effect, as there was no evidence that the state had a protectionist intent and the Act treats in-state and out-of-state producers the same. Nor does the Act try to directly regulate out-of-state conduct or impose burdens on out-of-state producers, but instead only precludes sale of meats resulting from certain practices, the courts concluded. The federal government and 20 states joined NAMI in a request for a rehearing of the case by the full panel of judges on the Ninth Circuit but were unsuccessful.
NAMI turned to the U.S. Supreme Court, seeking a review of the case on the basis that the Ninth Circuit’s decision conflicts with holdings by other appellate courts and the U.S. Supreme Court. The Supreme Court denied the request for review on June 28, offering no explanation for its decision. The legal challenges to Proposition 12 do not end with that denial, however. A separate case filed by the National Pork Producers Association and American Farm Bureau Federation is pending before the Ninth Circuit Court of Appeals. It also argues that Proposition 12 negatively impacts interstate commerce and will increase consumer costs for pork and that the federal district court judge who dismissed the case failed to examine the practical effects the law would have on producers. The Ninth Circuit heard the appeal in April, so we may see a decision in the next few months.
E15 waiver: American Fuel & Petrochemical Manufacturers v. EPA
The D.C. Circuit Court of Appeals held in favor of a claim by the American Fuel and Petrochemical Manufacturers (AFPM) challenging a Trump Administration rule in 2019 that waived restrictions on summer sales of E15 due to higher fuel volatility in summer temperatures. The decision could mean that current sales of E15 must end unless further legal challenges follow.
The 2019 Reid Vapor Pressure (RVP) waiver for E15 allowed fuel stations to sell 15% ethanol blends during the summer months rather than limiting those sales to 10% ethanol, a move that would increase ethanol sales. As expected, the oil and gas refining industry responded to the waiver issuance with a legal challenge, arguing that the administration lacked the authority to grant the RVP waiver for fuels over 10% ethanol.
The volatility waiver authority derives from the Clean Air Act, which establishes when the EPA may alter volatility limits through the waiver process and specifically allows the EPA to grant an ethanol waiver for “fuel blends containing gasoline and 10 percent denatured anhydrous ethanol” in Section 745(h)(4). The EPA relied upon the ethanol waiver language in the Clean Air Act back in 1992 to waive volatility standards for E10. But whether the EPA could use the Clean Air Act language to issue a waiver for ethanol beyond 10 percent is the question at the heart of the dispute. The EPA and intervenors in the case representing biofuel interests claimed the language was ambiguous enough to allow the EPA to grant waivers for fuel with 10% ethanol or more.
In a unanimous decision, the Court of Appeals concluded that “the text, structure, and legislative history” of the Clean Air Act do not allow EPA to extend a waiver to E15. The court found the statutory language straightforward, lacking any modifiers that would establish a range of ethanol blends rather than the 10 percent stated in the statute. Legislative actions at the time also supported an interpretation that the 10 percent language addressed E10 and not ethanol blends in excess of 10 percent.
The next critical question for this case is what the Biden Administration EPA will do with case and the E15 waiver. A request for further review of the D.C. Circuit’s opinion is possible. Or perhaps the EPA will pursue a legislative fix that increases the statutory reference from 10 percent to 15 percent ethanol. And it’s always possible that no further action will occur and E15 summer sales will no longer be an option.
Union organizer access as a taking – Cedar Point Nursery v Hassid
In the “win” column for agricultural employers is a case that asks whether a state regulation granting access to private property for union activities is a “taking” of property under the Constitution. The U.S. Supreme Court’s answer to the question is “yes,” although three of the Justices dissented from the majority opinion.
A regulation formed under the California Agricultural Labor Relations Act of 1975 gives labor organizations a “right to take access” to an agricultural employer’s property “for the purpose of meeting and talking with employees and soliciting their support.” The regulation requires agricultural employers to allow union organizers to be on the property up to three hours per day and four 30-day periods per year but cannot be “disruptive” and must provide written notice to employers. An employer who interferes with the organizers can be subject to sanctions.
After representatives from United Farm Workers accessed Cedar Point Nursery and engaged in disruptive conduct and sought to access Fowler Packing Company, both occasions without notice to the employers, the companies filed a lawsuit seeking an injunction from the federal District Court. They argued that the regulation was a physical taking of their properties because it granted an easement to the union organizers, which required compensation under the Fifth and Fourteenth amendments of U.S. Constitution.
The District Court did not grant the injunction and held that the regulation is not a physical taking because it doesn’t allow the public a permanent and continuous right of access to the property for any reason. The Ninth Circuit Court of Appeals affirmed that decision, agreeing that it wasn’t a physical taking, but a strong dissent argued that the union activities were a physical occupation and taking of property. The agricultural companies sought but were denied a hearing before all of the Ninth Circuit judges, leading to a request for review granted by the U.S. Supreme Court.
The majority of the Justices concluded that the California regulation is a physical taking because it grants union organizers a right to invade an agricultural employer’s property. Particularly important to the majority was the regulation’s removal of an owner’s right to exclude people from their private property, which is a “fundamental element” of property rights according to the Court. The Court rejected the argument that the access must be continuous and permanent to be a physical taking and dispensed with claims that the holding could endanger regulations that allow government entries onto private land. The Court’s holding was clear: the access regulation amounts to simple appropriation of private property.
Read the court opinions in these three cases here:
Did you know that the Florida Panther is the last subspecies of Mountain Lion found east of the Mississippi River? The Florida Panther is an endangered species with an estimated population of under 100 panthers. As bleak as it may seem, things may be looking up for the Florida Panther to make a roaring comeback (which is ironic because Florida Panthers can’t roar).
Like the Florida Panther, we have prowled agricultural and resource issues from across the country. Topics include a historic move by Florida to protect its wildlife and natural resources, agritourism getting a boost in Pennsylvania, Colorado’s livestock industry receiving a lifeline, and USDA efforts to expand broadband and water quality initiatives.
Florida makes conservation history. Florida has recently enacted a new law known as the Florida Wildlife Corridor Act (the “Act”). The Act creates a wildlife corridor that will connect Florida’s large national and state parks and create an unbroken area of preserved land that stretches from the Alabama state line all the way down to the Florida Keys. Specifically, the Act looks to protect about 18 million acres of habitat for Florida’s wildlife. The Act seeks to prevent wildlife, like the Florida Panther, from being cut off from other members of its species, which is a main driver of extinction. The Act also aims to protect Florida’s major watersheds and rivers, provide wildlife crossings over and/or under major highways and roads, and establish sustainable practices to help working ranches, farms and, forests that will be vital to ensuring the success and sustainability of the wildlife corridor. The Act goes into effect July 1 and provides $400 million in initial funding to help purchase land to create the corridor.
Pennsylvania provides protection for agritourism operators. Pennsylvania Governor, Tom Wolf, signed House Bill 101 into law. Like Ohio’s law, House Bill 101 shields agritourism operators from certain lawsuits that could arise from circumstances beyond their control. House Bill 101 prevents participants in an agritourism activity from suing the agritourism operator if the operator warns participants of the inherent risks of being on a farm and engaging in an agritourism activity. An agritourism operator must: (1) have a 3’ x 2’ warning sign posted and notifying participants that an agritourism operator is not liable, except under limited circumstances, for any injury or death of a participant resulting from an agritourism activity; and (2) have a signed written agreement with an agritourism participant acknowledging an agritourism operator’s limited liability or have specific language printed on an admission ticket to an agritourism activity that notifies and warns a participant of an agritourism operator’s limited liability. House Bill 101, however, does not completely shelter agritourism operators. An agritourism operator can still be liable for injuries, death, or damages arising from overnight accommodations, weddings, concerts, and food and beverage services. The enactment of House Bill 101 will help to protect farmers from costly and unnecessary lawsuits and provide additional sustainability to Pennsylvania’s agritourism industry.
Colorado Supreme Court strikes proposed ballot initiative seeking to hold farmers liable for animal cruelty. The Colorado Supreme Court issued an opinion removing Initiative 16, also known as the Protect Animals from Unnecessary Suffering and Exploitation Initiative (“PAUSE”), from voter consideration. Initiative 16 sought to amend Colorado law and remove certain agriculture exemptions from Colorado’s animal cruelty laws. Initiative 16 intended to set limitations on the slaughter of livestock and to broadly expand the definition of “sexual act with an animal” to include any intrusion or penetration of an animal’s sexual organs, which opponents of the initiative have argued would prohibit artificial insemination and spaying/neutering procedures. The Colorado Supreme Court found that the initiative violated Colorado’s single-subject requirement for ballot initiatives and therefore, was an illegal ballot initiative. The court argued that the central theme of the initiative was to incorporate livestock into Colorado’s animal cruelty laws. However, because the initiative redefined “sexual act with an animal” to include animals other than livestock, the court concluded that the ballot initiative covered two subjects, not one. The court reasoned that because the initiative addresses two unrelated subjects, voters could be surprised by the consequences of the initiative if it passed, which is why Colorado has single-subject requirement for ballot initiatives.
USDA announces dates for Conservation Reserve Program (“CRP”) signups. The USDA set a July 23 deadline for agricultural producers and landowners to apply for the CRP General and will also be accepting applications for CRP Grasslands from July 12 through August 20. Through the CRP General, producers and landowners establish long-term conservation practices aimed at conserving certain plant species, controlling soil erosion, improving water quality, and enhancing wildlife habitat on cropland. CRP Grasslands helps landowners and producers protect grasslands including rangeland, pastureland, and certain other lands, while maintaining grazing lands. To enroll in the CRP, producers and landowners should contact their local USDA Service Center.
USDA expands CLEAR30 initiative nationwide. The USDA announced that landowners and agricultural producers currently enrolled in CRP now have an opportunity to sign a 30-year contract through the Clean Lakes, Estuaries, and Rivers Initiative (“CLEAR30”). CLEAR30 was created by the 2018 Farm Bill to address water quality concerns and was originally only available in the Great Lakes and Chesapeake Bay watersheds. Now, producers and landowners across the country can sign up for CLEAR30. Eligible producers must have certain water quality improvement practices under a continuous CRP or under the Conservation Reserve Enhancement Program (“CREP”) and contracts that are set to expire on September 30, 2021. The USDA hopes that by expanding the initiative, it will enable more producers to take conservation efforts up a level and create lasting impacts. CLEAR30’s longer contracts help to ensure that conservation benefits will remain in place longer to help in reducing sediment and nutrient runoff and reducing algal blooms. To sign up, producers and landowners should contact their local USDA Service Center by August 6, 2021.
Three federal agencies enter into agreement to coordinate broadband funding deployment. The Federal Communications Commission (“FCC”), the USDA, and the National Telecommunications and Information Administration (“NTIA”) entered into an agreement to coordinate the distribution of federal funds for broadband development in rural and underserved areas. In an announcement released by the USDA, Secretary Vilsack stressed the importance of broadband in rural and underserved communities. Lessons learned from the COVID-19 Pandemic have made access to broadband a central issue for local, state, federal and Tribal governments. The goal is to get 100% of Americans connected to high-speed internet. As part of the signed agreement, the agencies will share information about existing or planned projects and identify areas that need broadband service in order to reach the 100% connectivity goal. Visit the USDA’s Rural Development Telecom Programs webpage to learn more about the USDA’s efforts to provide broadband service in rural areas.
Did you know that a housefly buzzes in the key of F? Neither did I, but I think the musical stylings of the Cicada have stolen the show this summer.
Aside from Mother Nature’s orchestra, federal agencies have also been abuzz as they continue to review the prior administration’s agencies’ rules and regulations. This week’s Ag Law Harvest is heavily focused on federal agency announcements that may lead to rule changes that affect you, your farm or business, or your family.
USDA issues administrative complaint against Ohio company. The USDA’s Agricultural Marketing Service (“AMS”) issued an administrative complaint on May 4, 2021, against Barnesville Livestock LLC (“Barnesville”) and an Ohio resident for allegedly violating the Packers and Stockyards Act (“P&S Act”). An investigation conducted by the AMS revealed that the Ohio auction company failed to properly maintain its custodial account resulting in shortages of $49,059 on July 31, 2019, $123,571 on November 29, 2019, and $54,519 on December 31, 2019. Companies like Barnesville are required to keep a custodial account under the P&S Act. A custodial account is a trust account that is designed to keep shippers’ proceeds from the sale of livestock in a secure and centralized location until those proceeds can be distributed to the seller. According to the AMS, Barnesville failed to deposit funds equal to the proceeds received from livestock sales into the custodial account. Additionally, Barnesville reported a $15,711 insolvency in its Annual Report submission to AMS. Operating with custodial account shortages and while insolvent are both violations of the P&S Act. The AMS alleges that Barnesville’s violations place livestock sellers at risk of not being paid fully or completely. If Barnesville is proven to have violated the P&S Act in an oral hearing, it may be ordered to cease and desist from violating the P&S Act and assessed a civil penalty of up to $28,061 per violation.
USDA to invest $1 billion as first investment of new “Build Back Better” initiative. The USDA announced that it will be investing up to $1 billion to support and expand the emergency food network so food banks and local organizations can serve their communities. Building on the lessons learned from the COVID-19 pandemic, the USDA looks to enter into cooperative agreements with state, Tribal, and local entities to more efficiently purchase food from local producers and invest in infrastructure that enables organizations to more effectively reach underserved communities. The USDA hopes to ensure that producers receive a fair share of the food dollar while also providing healthy food for food insecure Americans. This investment is the first part of the USDA’s Build Back Better initiative which is focused on building a better food system. Build Back Better initiative efforts will focus on improving access to nutritious foods, address racial injustice and inequity, climate change, and provide ongoing support for producers and workers.
Colorado passes law changing agricultural employment within the state. On June 8, 2021, Colorado’s legislature passed Senate Bill 87, also known as the Farmworker Bill of Rights, which will change how agricultural employees are to be treated under Colorado law. The bill removes the state’s exemption for agricultural labor from state and local minimum wage laws, requiring agricultural employers to pay the state’s $12.32/hour minimum wage to all employees. Under the new law, agricultural employees are allowed to organize and join labor unions and must also be paid overtime wages for any time worked over 12 hours in a day or 40 hours in a week. The bill also mandates certain working conditions including: (1) requiring Colorado’s department of labor to implement rules to prevent agricultural workers from heat-related stress, illness, and injury when the outside temperature reaches 80 degrees or higher; (2) limiting the use of a short-handled hoe for weeding and thinning in a stooped, kneeling, or squatting position; (3) requiring an agricultural employer give periodic bathroom, meal, and rest breaks; and (4) limiting requirements for hand weeding or thinning of vegetation. Reportedly, Colorado’s Governor, Jared Polis, is eager to sign the bill into law.
Wildlife agencies release plan to improve Endangered Species Act. The U.S. Fish and Wildlife Service (“FWS”) and the National Marine Fisheries Service (“NMFS”) have released a plan to reverse Trump administration changes to the Endangered Species Act (“ESA”). The agencies reviewed the ESA following President Biden’s Executive Order 13990, which directed all federal agencies to review any agency actions during the Trump administration that conflict with the Biden-Harris administration objectives. The agencies look to reverse five ESA regulations finalized by the Trump administration which include the FWS’ process for considering exclusions from critical habitat designations, redefining the term “habitat,” reinstating prior regulations for listing species and designating critical habitats, and reinstating protections under the ESA to species listed as threatened. Critics of the agencies’ plan claim that the current administration’s proposals would remove incentives for landowners to cooperate in helping wildlife.
EPA announces intent to revise the definition of “waters of the United States.” On June 9, 2021, the EPA and the Department of the Army (the “Agencies”) announced that they intend to change the definition of “waters of the United States” (“WOTUS”), in order to protect the nation’s water resources. The Agencies’ also filed a motion in a Massachusetts federal court requesting that the court send the Trump administration’s Navigable Water Protection Rule (“NWPR”) back to the Agencies so they can initiate a new rulemaking process to change the definition of WOTUS. In the motion, the Agencies explained that pursuant to President Biden’s Executive Order 13990, they have reviewed the necessary data and determined that the Trump administration’s rule has led to significant environmental harm. The Agencies hope to restore the protections that were in place prior to the 2015 WOTUS rule. According to the EPA, the Agencies’ new regulatory process will be guided by: (1) protecting water resources and communities consistent with the Clean Water Act; (2) the latest science and the effects of climate change on the nation’s waters; (3) practical implementation; and (4) the experience and input of the agricultural community, landowners, states, Tribes, local governments, environmental groups, and disadvantaged communities with environmental justice concerns. The EPA is expected to release further details of the Agencies’ plans, including opportunity for public participation, in a forthcoming action. To learn more about WOTUS, visit https://www.epa.gov/wotus.
As planting season draws to a close, new agricultural issues are sprouting up across the country. This edition of the Ag Law Harvest brings you federal court cases, international commodity news, and new program benefits affecting the agriculture industry.
Pork processing plants told to hold their horses. The USDA’s Food Safety and Inspection Service (“FSIS”) is not going to appeal a federal court’s ruling that requires the nation’s hog processing facilities to operate at slower line speeds. On March 31, 2021, a federal judge in Minnesota vacated a portion of the USDA’s 2019 “New Swine Slaughter Inspection System” that eliminated evisceration line speed limits. The court held that the USDA had violated the Administrative Procedure Act when it failed to take into consideration the impact the new rule would have on the health and safety of plant workers. The court, however, only vacated the provisions of the new rule relating to line speeds, all other provisions of the rule were not affected. Proponents of the new rule claim that the rule was well researched and was years in the making. Further, proponents argue that worker safety was taken into consideration before adopting the rule and that the court’s decision will cost the pork industry millions. The federal court stayed the order for 90 days to give the USDA and impacted plants time to adjust to the ruling. All affected entities should prepare to revert to a maximum line speed of 1,106 head per hour starting June 30, 2021.
Beef under (cyber)attack. Over the Memorial Day weekend, JBS SA, the largest meat producer globally, was forced to shut down all of its U.S. beef plants which is responsible for nearly 25% of the American beef market. JBS plants in Australia and Canada were also affected. The reason for the shut down? Over the weekend, JBS’ computer networks were infiltrated by unknown ransomware. The USDA released a statement showing its commitment to working with JBS, the White House, Department of Homeland Security, and others to monitor the situation. The ransomware attack comes on the heels of the Colonial Pipeline cyber-attack, leading many to wonder who is next. As part of its effort, the USDA has been in touch with meat processors across the country to ensure they are aware of the situation and asking them to accommodate additional capacity, if possible. The impact of the cyber-attack may include a supply chain shortage in the United States, a hike in beef prices at the grocery store, and a renewed push to regulate other U.S. industries to prevent future cyber-attacks.
Texas has a new tool to help combat feral hogs. Texas Agriculture Commissioner, Sid Miller, announced a new tool in their war against feral hogs within the state. HogStop, a new hog contraceptive bait enters the market this week. HogStop is being released in hopes of curbing the growth of the feral hog population. According to recent reports, the feral hog population in Texas has grown to over 2.6 million. It is estimated that the feral hogs in Texas have been responsible for $52 million in damage. HogStop is an all-natural contraceptive bait that targets the male hog’s ability to reproduce. HogStop is considered a 25(b) pesticide under the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”), which allows Texas to use it without registering the product. Commissioner Miller thinks HogStop is a more humane way to curb the feral hog population in Texas and hopes that it is the answer to controlling the impact that feral hogs have on farmers and ranchers. More information about HogStop can be found at their website at www.hogstop.com.
USDA announces premium benefit for cover crops. Most farmers who have coverage under a crop insurance policy are eligible for a premium benefit from the USDA if they planted cover crops this spring. The USDA’s Risk Management Agency (“RMA”) announced that producers who insured their spring crop and planted a qualifying cover crop during the 2021 crop year are eligible for a $5 per acre premium benefit. However, farmers cannot receive more than the amount of their insurance premium owed. Certain policies are not eligible for the benefit because those policies have underlying coverage that already receive the benefit or are not designed to be reported in a manner consistent with the Report of Acreage form (FSA-578). All cover crops reportable to the Farm Service Agency (“FSA”) including, cereals and other grasses, legumes, brassicas and other non-legume broadleaves, and mixtures of two or more cover crop species planted at the same time, are eligible for the benefit. To receive the benefit, farmers must file a Report of Acreage form (FSA-578) for cover crops with the FSA by June 15, 2021. To file the form, farmers must contact and make an appointment with their local USDA Service Center. More information can be found at https://www.farmers.gov/pandemic-assistance/cover-crops.
Federal court vacates prior administration’s small refinery exemptions. The Tenth Circuit Court of Appeals issued an order vacating the EPA’s January 2021 small refinery exemptions issued under the Trump administration and sent the case back to the EPA for further proceedings that are consistent with the Tenth Circuit’s holding in Renewable Fuels Association v. EPA. The Tenth Circuit held that the EPA may only grant a small refinery exemption if “disproportionate economic hardship” is caused by complying with Renewable Fuel Standards. The EPA admitted that such economic hardship may not have existed with a few of the exemptions granted and asked the court to send the case back to them for further review. The order granted by the Tenth Circuit acknowledged the agency’s concession and noted that the EPA’s motion to vacate was unopposed by the plaintiff refineries.
Michigan dairy farm penalized for National Pollutant Discharge Elimination System violations. A federal district court in Michigan issued a decision affirming a consent decree between a Michigan dairy farm and the EPA. According to the complaint, the dairy farm failed to comply with two National Pollutant Discharge Elimination System (“NPDES”) permits issued under Section 402 of the Clean Water Act. The violations include improper discharges, deficient maintenance and operation of waste storage facilities, failing to report discharges, failing to abide by its NPDES land application requirements, and incomplete recordkeeping. The farm is required to pay a penalty of $33,750, assess and remedy its waste storage facilities, and implement proper land application and reporting procedures. The farm also faces potential penalties for failing to implement any remedial measures in a timely fashion.
It’s that time of year again. A time full of excitement and hope. Kids and students are eagerly waiting for that final bell to ring, releasing them into weeks of freedom and fun. Some are celebrating with their closest loved ones as they prepare to embark on their next journey. And lastly, some parents have circled a certain fall date for when things return back to normal. It is finally nice to see hope, joy, and excitement return to our lives. These past 18 months have been a real wake-up call, and by no means is it over, but the light can be seen at the end of the tunnel. This past week has also been abuzz with interesting agricultural and resource issues. This edition of the Ag Law Harvest brings you some interesting lawsuits, reports, and initiatives from across the country affecting agriculture and the environment.
USDA expands aquaculture disaster assistance. The USDA has announced a policy change that makes food fish and other aquatic species eligible for the Emergency Assistance for Livestock, Honey Bees and Farm-raised Fish Program (ELAP). Previously, only losses of farm-raised game and bait fish were eligible under ELAP. Under the program, eligible producers can receive financial assistance for losses due to disease and certain severe weather events. To be eligible, losses must have occurred on or after January 1, 2021. The Farm Service Agency (FSA) is waiving the requirement to file a notice of loss within 30 calendar days for farm-raised fish and other aquatic species death losses that occurred prior to June 1, 2021. Producers must still provide records to document any eligible losses. The deadline to file an application for payment for the 2021 program year is January 31, 2022. The USDA also announced that it will purchase up to $159.4 million in domestically produced seafood, fruits, legumes, and nuts for distribution to domestic food assistance programs in order to address disruptions in the food production and supply chains resulting from the COVID-19 pandemic.
Oregon ballot initiative seeks to redefine animal cruelty. Supporters of Oregon Initiative Petition 13 (“IP13”) have succeeded in meeting their first requirement to putting their proposed law on the 2022 Oregon ballot. IP13 seeks to amend the definition of what constitutes animal cruelty and who can be punished. Oregon, like many other states, does have an animal cruelty law that prohibits individuals from unnecessarily harming animals. Additionally, Oregon’s current law specifically exempts certain practices from being assumed to be animal abuse (activities like farming, breeding livestock, hunting, fishing, wildlife management practices, rodeos, slaughter, and scientific or agricultural research). However, IP13 seeks to remove all the above listed exemptions and would make it a crime to engage in those types of activities. IP13 only exempts individuals that harm an animal because the animal posed an immediate risk of danger and veterinarians. Supporters of IP13 claim that no one should be above the law and should be held accountable for any and all animal abuse and neglect. Opponents of IP13 fear that if the initiative passes and becomes law, Oregon’s animal agriculture industry will be destroyed. Opponents argue that IP13 makes common farming practices like breeding and slaughtering livestock for food, illegal. If supporters of IP13 continue to collect signatures and meet the required thresholds, IP13 will be voted on by the citizens of Oregon in 2022.
Indiana passes law to purchase locally grown food from youth agricultural education programs. Indiana’s governor signed a bill into law that allows schools to purchase up to $7,500 worth of food from youth agricultural education programs. The bill, sponsored by State Rep. Steve Davisson, was born after local Indiana FFA students were raising hogs and growing hydroponic lettuce to sell to their school cafeteria but hit a roadblock because of state laws and requirements. House Bill 1119 provides an avenue for local youth agricultural programs to sell to their respective school districts and not compete against wholesale distributors. Rep. Davisson hopes the program will expand into other Indiana schools to give students practical agricultural experience and potentially launch students into a career in agriculture.
Federal lawsuit about USDA’s RFID tags for cattle dismissed. Last month we reported that farmers and ranchers from South Dakota and Wyoming filed a lawsuit against the USDA and its subagency, the Animal and Plant Health Inspection Service (“APHIS”), for improperly using advisory committees to create new rules in violation of federal law. Well, last week a Wyoming federal court dismissed the complaint against the USDA and APHIS. The court concluded that APHIS did not “establish” the Cattle Traceability Working Group (“CTWG”) or the Producer Traceability Council (“PTC”) as advisory councils to create the RFID tag rules. The court also found that the advisory groups were completely private and consisted of cattle industry representatives, showing that APHIS did not “establish” these advisory groups. Additionally, the court held that APHIS did not “utilize” or control the actions of the advisory groups. The court reasoned that the advisory groups and APHIS were working on parallel tracks to achieve the same goal, preventing and tracing animal disease for livestock moving across state lines, and that APHIS only provided input to the advisory groups. The court held that the USDA and APHIS were not in violation of federal law because the advisory groups were not subject to the Federal Advisory Committee Act. As it stands, the USDA and APHIS have rescinded their July 2020 notice that RFID tags would be required for cattle crossing state lines. However, attorneys and interest groups representing the farmers and ranchers in the Wyoming case still fear that APHIS and the USDA will use the information provided by these advisory groups to implement an “unlawful mandate” in the future.
South Dakota farmer suing the USDA over a mud puddle? On May 05, 2021, Arlen and Cindy Foster filed a federal lawsuit in South Dakota claiming that the USDA has improperly identified a mud puddle in the middle of their farm field as a federally protected wetland and that the Swampbuster Act violates the U.S. Constitution. Under the Swampbuster Act, farmers that receive USDA benefits cannot produce crops on or around a federally protected wetland or they risk losing all federal agriculture benefits. The Fosters contend that Arlen’s father planted a tree belt in 1936 to help prevent soil erosion which is now causing snow to accumulate under the tree belt producing a puddle in the field when the snow melts. The Fosters argue that this makes the puddle in their field an unregulated “artificial wetland” and is not subject to the Swampbuster Act or the USDA’s control. Additionally, the Fosters claim that the Swampbuster Act violates the Tenth Amendment of the U.S. Constitution, and that the federal government cannot regulate the Fosters’ alleged wetland. The Fosters reason that if their puddle should be considered a wetland, any regulation of that wetland should come from the state of South Dakota, not the federal government.
Hawai’i man fined over $600,000 for pouring poison into Paahe’ehe’e Stream. Hawai’i’s Board of Land and Natural Resources (“BLNR”) fined a Hilo resident $633,840 for pouring poison into a North Hilo stream and causing the death of an estimated 6,250 Tahitian prawns. North Hilo has a history of individuals using poison to harvest Tahitian prawn. DLNR, in conjunction with other natural resource protection entities, are continuously concerned with the impact that the poison will have on the local wildlife and environment. The $633,840 fine is the largest in BLNR history and advocates hope that it is a step in the right direction to let illegal fishers know that Hawai’i is committed to prosecuting individuals that engage in harmful environmental practices to the full extent of the law in order to protect Hawai’i’s natural resources.
Montana man sentenced to prison for cattle theft. A ranch manager has been sentenced to 30 months in prison and ordered to pay back $451,000 after pleading guilty to wire fraud and to selling cattle that he did not own. The Montana man was a ranch manager at Hayes Ranch in Wilsall, Montana from 2008 to 2017 and also started his own cattle company in 2015. When the owners of Hayes Ranch were out of town, the ranch manager began stealing cattle from his employer and selling them as if they were his own. The ranch manager was ordered to repay his former employer $241,000 for the stolen cattle. Additionally, the ranch manager was ordered to pay Northwest Farm Credit Services over $200,000 for selling cattle that he pledged as collateral for loans obtained from the lender.
The return of the U.S. Jaguar? Environmental groups and scientists recently published a paper urging U.S. wildlife managers to consider reintroducing jaguars to the American Southwest. Advocates argue that reintroducing jaguars to the region is essential to species conservation and restoration of the ecosystem. In July 2018, the U.S. Fish and Wildlife Service published a jaguar recovery plan as required by the Endangered Species Act of 1973. While the recovery plan does not call for the reintroduction of jaguars into the Southwest region of the U.S., federal officials have been increasingly focused on sustaining habitat, eliminating poaching, and improving public acceptance for jaguars that naturally make their way across the U.S.-Mexico border. The southwest region of the U.S. makes up 1% of the jaguar’s historic range but is suitable for sustaining the big cat. Jaguar sightings have been reported in the area, although very rarely. Jaguar advocates hope that potential opposition to the reintroduction of jaguars, specifically from ranchers and rural residents, can be eased by implementing compensation programs focused on things like increased livestock deaths.
The final day of April is already here! Spring feels like it has finally arrived and planting season is in motion across Ohio. Just like farmers in the field, legislatures, government bodies, and courts across the country are hard at work addressing critical agricultural and resource law issues. We've gathered a collection of those issues for this Ag Law Harvest.
Debt relief for socially disadvantaged farmers is in the works. The USDA has announced its plans for implementing debt relief to socially disadvantaged producers mandated by the American Rescue Plan Act of 2021 that Congress passed in March. The payments will be 120% of any outstanding Farm Service Agency Direct and Guaranteed Farm Loans and Farm Storage Facility Loans held by a socially disadvantaged farmer on January 1, 2021. The additional 20% on top of the loan balance is for tax liabilities associated with the payment, as it will be considered income. For purposes of this debt relief program, a “socially disadvantaged producer” is one who is Black or African American, American Indian, Alaskan Native, Hispanic or Latino, Asian American or Pacific Islander. A producer must indicate the identification on the Customer Data Worksheet, USDA Form AD-2047, filed with the FSA. Producers who fit into the socially disadvantaged producer definition can update those forms now with the local FSA office. No other action by a producer who is eligible for the debt relief is necessary, as the FSA will notify producers of the payoff process as it occurs. For more information, visit this webpage for the USDA’s American Rescue Plan Debt Payments.
Missouri’s Truth in Labeling Law. In 2018, Missouri enacted a law making it a criminal offense to “misrepresent a product as meat that is not derived from harvested production livestock or poultry.” Violators could potentially face up to one year in prison and/or a fine up to $2,000.00. Shortly after the law went into effect, Turtle Island Foods Inc., a business that makes Tofurky (an alternative meat product) and advocacy groups such as the Animal Legal Defense Fund (collectively the “Plaintiffs”), filed a lawsuit challenging Missouri’s law on the grounds that the law violated the U.S. Constitution including the Free Speech Clause of the First Amendment, the Due Process Clause of the Fourteenth Amendment, and the Dormant Commerce Clause. The district court denied Plaintiffs’ request for an injunction determining that Missouri’s law only prohibits companies from misleading consumers. Plaintiffs then appealed to the federal circuit court. Last month the Eighth Circuit Court issued its opinion and agreed with the district court. However, the Eighth Circuit noted that the facts of this specific case did not support overturning Missouri’s law, but that facts and circumstances of another case may provide otherwise. As it stands, Missouri’s law remains in full force and effect.
Renewable Fuel Standard deadlines extended. The EPA issued its final rule extending deadlines for obligated parties to comply with Renewable Fuel Standard deadlines for 2019 and 2020. Under the extension, small refineries must submit 2019 compliance forms by November 30, 2021, and their associated attest engagement forms by June 1, 2022. For 2020, obligated parties must submit their compliance documents by January 31, 2022, and their associated attest engagement reports by June 1, 2022. Lastly, the EPA extended the deadline for obligated parties to submit attest engagement reports for 2021 to September 1, 2022, the deadline for 2021 compliance documents remains unchanged.
Ohio man sentenced for stealing grain. How often do you hear of farmers being victims of theft and a criminal on the run? Well, last month an Ohio man was sentenced to one year in prison and 5 years of probation after stealing over $94,000.00 in harvested grain. The defendant took his employer’s gravity wagon full of grain and sold it to a local co-op in Ashland County under false pretenses. After the theft was discovered, the defendant fled from Ohio, eventually having to be extradited from New Mexico. This case demonstrates just how vulnerable farmers are to potential crimes. For more information on intentional harm to farm property and your rights, check out our law bulletin.
Iowa passes agricultural trespass law. Iowa lawmakers have recently passed a new law that will make certain types of trespass on Iowa farms a criminal offense in an effort to stop animal activists and others from secretly documenting activities. House File 775 makes it illegal to take soil or water samples and samples of an animal’s bodily fluids or other byproducts. Additionally, the law makes it a crime to place or use a camera on the farm property without the owner’s consent. Proponents of the law argue that such laws are necessary to protect private property rights and prevent bioterrorism. Opponents of the bill are expected to challenge the law on First Amendment grounds.
USDA discussing current issues surrounding shipping U.S. agricultural exports. USDA had a meeting with the U.S. Department of Transportation and agricultural stakeholders to discuss the challenges of exporting U.S. agricultural products. Challenges arose in the fall of 2020 and have only continued to get worse. With the resurgence of international trade, nearly every sector of the supply chain has been under stress, including warehousing, trucking, rail service, container availability, and vessel service. Farmers have long struggled with finding a market for their products and getting a fair price for their work. With worldwide markets opening back up, the USDA and the Department of Transportation are hard at work trying to ensure that U.S. farm products reach consumers across the globe.
Farmers to Families Food Box program to end May 31, 2021. As part of the Coronavirus Food Assistance Program announced in April 2020, the Farmers to Families Food Box program was designed and implemented as a temporary relief effort to purchase produce, dairy, and meat products from American farmers and distribute these products in family-sized boxes to Americans in need. In a letter to stakeholders, the USDA announced that due to the improving economy and the access food insecure Americans have to expanded federal nutritional programs like SNAP, WIC, P-EBT, and more, the need for the Farmers to Families Food Box program no longer exists. The USDA also stated that the lessons learned from the Farmers to Food Box program will continue to be implemented in current and future programs. The USDA has already begun to offer a fresh produce box on a temporary basis through The Emergency Food Assistance Program (TEFAP) and is in the process of designing a Dairy Donation Program to facilitate the timely donation of dairy products to nonprofit organizations that distribute food to persons in need and to help prevent and minimize food waste.
Grant program to enhance the waters of Lake Erie. The Ohio Department of Agriculture (ODA) has announced that the USDA has awarded ODA’s Division of Soil and Water Conservation a five-year, $8-million grant to help improve the water quality in Lake Erie. The program will reinforce Governor Mike Dewine’s H2Ohio initiative by assisting farmers in developing nutrient management plans and conservation practices. The grant will be available to farmers in Crawford, Erie, Huron, Marion, Ottawa, Richland, Sandusky, Seneca, Shelby, and Wyandot counties. Farmers can start applying for the program through their local soil & water district office later this summer.
Radio Frequency Identification (RFID) tags replacing the branding iron? Last year the USDA’s Animal and Plant Health Inspection Service proposed to approve a rule that would require using RFID eartags for use on cattle that move across state lines. While the rule has not yet been finalized, the proposed rule, which is supposed to take effect January 2023, has not been free of controversy. The USDA believes the use of a RFID tag will provide the cattle industry with the best protection against the rapid spread of animal diseases. Some farmers, on the other hand, feel they should be able to use currently approved methods to maintain their cattle. To fight for their right, the Ranchers Cattlemen Action Legal Fund (R-CALF) has filed a lawsuit in a Wyoming Federal Court on behalf of some Wyoming cattle producers. R-CALF argues that the USDA has improperly used advisory committees to create new rules in violation of the Administrative Procedure Act and the Federal Advisory Committee Act. Essentially, R-CALF argues that neither the USDA nor its subcommittees followed correct procedure as required by federal law in order to create this proposed RFID rule. R-CALF seeks to prevent the USDA from using the recommendations obtained from the subcommittees in violation of federal law and in its place ask the court to require the USDA to revisit the RFID eartag issue with subcommittees that are compliant with federal law.
All farm employees are set to receive overtime pay in the state of Washington. Last November the Washington Supreme Court ruled that Washington’s exclusion of dairy workers from overtime pay was in violation of the state’s constitution. Since the Washington Supreme Court ruling, several class-action lawsuits were filed against Washington dairy farmers for unpaid overtime hours, threatening to wipe out the Washington dairy industry. Fearing the worst, Washington legislators worked diligently to pass Senate Bill 5172 ending the overtime exemption for all of agriculture and to make the transition for agricultural employers as smooth as possible. The prevents lawsuits for unpaid overtime from being filed after the Washington Supreme Court decision and to phase in overtime in the agriculture industry. Beginning in 2022, agricultural employees will be paid overtime for time worked over 55 hours in any one workweek and by 2024, employees shall be paid overtime for any time worked over 40 hours in any one workweek. Senate Bill 5172 awaits the Washington Governor's signature.
Update: Mengel Dairy Farms appealed the federal district court's decision regarding loss of business income (discussed below) to the 6th Circuit Court of Appeals. On July 16, 2021, the 6th Circuit Court of Appeals issued an opinion agreeing with the district court's decision. The 6th Circuit concluded that in order for Mengel Dairy Farms to receive insurance proceeds for loss of business income, Mengel Dairy Farms had to completely shut down its dairy farm. The 6th Circuit found that a reduction in business is simply not enough.
When was the last time you read your farm business insurance policy? Under your policy, do you know when coverage is triggered for loss of business profits and loss of assets? In the case below, you will learn about a dairy farm that recently dealt with the issue of stray voltage causing dairy cattle to unexpectedly pass away. Even though the farm had insurance, the farm continued to operate, albeit at a reduced capacity, while it dealt with the silent killer. The farm continued to operate under the assumption that any loss of business income and the loss of its primary assets would be covered under its insurance policy.
Mengel Dairy Farms
Mengel Dairy Farms (“Mengel”) could not begin to fathom why its dairy cattle were unexpectedly dying off. Beyond its loss of livestock, Mengel also suffered loss of milk production and business profits. The farm eventually hired an expert to help it determine the cause of death of its cattle. The expert determined that a stray electrical current was present on the property, causing the dairy cattle to die.
Mengel then proceeded to file an insurance claim with its insurance provider, Hastings Mutual Insurance Company (“Hastings”), hoping to receive insurance benefits for the lost cattle, cost of the investigation into the death of the cattle, the subsequent repairs to correct the stray electrical current, and for its lost business profits.
Hastings, however, sent out its own expert to help determine the cause of death of the cattle. Hastings’ expert could not find any stray voltage on the property but did believe that electrocution may have caused Mengel’s cattle to stop eating and ultimately die.
After its investigation, Hastings paid Mengel for the death of its cattle and the cost of the investigation into the deaths of the livestock, but Hastings rejected coverage for the loss of business income. Hastings then filed an action in the Federal District Court, asking the court to determine that there was no coverage for Mengel’s lost business income as a result of the electrocuted dairy cattle.
After Hastings filed its action, Mengel submitted a second insurance claim to Hastings for the death of additional livestock, costs of additional investigation and repair, and additional lost profits. Hastings did not provide any coverage, this time, to Mengel for its second insurance claim and instead issued a reservation of rights letter to Mengel stating that coverage for Mengel’s second claim may be subject to exclusions under Mengel’s insurance policy. Hastings then asked the court to also determine whether Hastings was required to pay for the loss of the additional dairy cattle and additional lost profits.
Coverage for Electrocuted Dairy Cattle
In its arguement to the court, Hastings claimed that under the dairy farm’s insurance policy, Hastings was not required to pay any insurance benefits for the additional dairy cattle that passed away from the stray electrical current. Hastings argued that even though death or destruction of livestock by electrocution is a covered peril under Mengel’s insurance policy, the term electrocution means instant death, and because Mengel’s cattle did not die instantly, Mengel was not entitled to insurance benefits for the cattle.
The Court disagreed. The court found that the term “electrocution” was an ambiguous term within the insurance policy because it was not expressly defined. Additionally, the court went on to analyze that coverage existed for both the death or destruction of livestock. The court determined that the term destruction encompasses more than just death. Reading the terms destruction and electrocution together, the court held that electrocution can consist of an event that does not necessarily result in instantaneous death but may still cause irreparable harm.
Therefore, the electrocution causing Mengel’s cattle to stop eating and ultimately die could be considered “destruction of livestock” which would be covered under the farm’s insurance policy.
Coverage for Lost Business Income
Since discovering the cause of death to its dairy cattle, Mengel reduced its farming operations to deal with the stray electrical current. Under Mengel’s insurance policy, coverage existed for lost business income “due to the necessary suspension” of operations. The insurance policy also indicated that the necessary suspension of farm operations must have been caused or resulted from an insured peril. Mengel thought that because it reduced operations for a covered peril (the electrocution of its livestock), it was entitled to coverage for its lost business income. Hastings disagreed and claimed that coverage did not exist for Mengel because the farm did not shut down its farming operations completely, it only reduced operations.
The court sided with Hastings. The court found that “necessary suspension” means a complete shutdown of operations, even if temporary. The court noted that a slowing down of business is not covered under the insurance policy. Therefore, Mengel’s claim for lost profits is not covered under the policy because it continued to operate at a reduced capacity.
Mengel filed its own claims against its insurer for bad faith and breach of contract. However, after the court’s determination that coverage existed for electrocuted cattle that did not die instantly and the court’s conclusion that Mengel was not owed any insurance benefits for lost profits, the parties settled their dispute out of court.
It may not be as easy as you think to determine what is covered (and what should be covered) under your insurance policy. Insurance companies do their best to draft insurance policies to be as precise as possible. Certain pre-requisites must be met in order for coverage to exist for a farmer and their business. It is vital that you understand what is covered (and not covered) under your insurance policy. You may be taking steps to remediate any issues with the assumption that insurance will cover any expenses or lost revenue you may endure, but as the above case demonstrates, this is not always true.