Valentine’s Day was indeed a sweet day for Bader Farms, a peach farm in Missouri that claimed that dicamba products by Monsanto/Bayer and BASF drifted onto its property and injured 20,000 of its peach trees over 700 acres. A federal jury agreed and awarded the farm $15 million in compensatory damages. The following day, the jury gave the farm another $250 million in punitive damages against Bayer and BASF, bringing the total award to $265 million.
In 2016, Bader Farms was the first to file a dicamba drift lawsuit against Monsanto. A summary of the lawsuit from our partner, the National Agricultural Law Center, explains that the farm’s claim alleged widespread damage to the peach orchards and a multi-million dollar financial loss. At the center of Bader Farms’ original complaint was Monsanto’s genetically modified Roundup Ready 2 Xtend soybeans and Bollgard II Xtend cotton seeds (“Xtend crops”), dicamba-resistant seeds that Bader Farms alleged were released without an accompanying EPA-approved dicamba herbicide in 2015 and 2016. The farm argued that by selling the Xtend crop seeds without a corresponding herbicide, it was foreseeable to Monsanto that farmers would use old, highly volatile, drift-prone dicamba that had a strong chance of damaging neighboring crops.
Bader Farms later added BASF as a defendant to the case and also added new complaints for dicamba-related damage it suffered during the 2017 growing season. Bader Farms stated that Monsanto and BASF had worked together to manufacture, market, and sell dicamba-based products that they knew would cause harm.
The jury in the federal lawsuit ruled in favor of Bader Farms on all counts. Specifically, the jury concluded that Monsanto was negligent by releasing dicamba-tolerant seeds before releasing the herbicide. The jury also determined that both Monsanto and BASF were negligent because they issued new dicamba products that drifted off-target although the companies claimed that the products were less likely to drift. Important to the punitive damage award, the jury found that Monsanto and BASF had engaged in a “conspiracy to create an ecological disaster to increase profits.”
The Bader Farms case is the first of many dicamba-based cases against Monsanto/Bayer and BASF, combined last year into Multi-District Litigation involving both a Crop Damage Class Action Master Complaint and a Master Antitrust Action Complaint. For an excellent review of the dicamba cases, see the National Agricultural Law Center’s series on “The Deal with Dicamba,” available at https://nationalaglawcenter.org/the-deal-with-dicamba-part-three/.
With 2019’s ups and downs in the weather and the marketplace, it’s likely that many farmers used the Federal Crop Insurance Program to mitigate their losses. Those farmers whose crop insurance claims reach $200,000 or more will be audited by the USDA’s Risk Management Agency.
What’s the purpose of an audit—does it mean you’re in trouble with the government? What can you expect when going through the audit process? How do you prepare for an audit? What kind of records and documentation do you need? All of these questions and more are answered in a new fact sheet we recently published through our partnership with the National Agricultural Law Center. Click here to read the fact sheet to better prepare you for going through an audit.
Christmas is a good time to make wishes for the peace and well-being of others. One of our top wishes this year does that: we hope for all Ohio farmers to have written farmland leases. It’s an odd wish, we know. But putting leases in writing can help landowners and farm tenants live in peace, and we like that.
Farm leases have always been prone to being verbal agreements, sealed with a handshake. Simplicity and trust are two plausible reasons we’ve done business that way. But a written farm lease can be simple, and using one doesn’t have to mean that the parties don’t trust each another. Instead, a lease can keep distrust from arising between the parties by anticipating needs and foreclosing uncertainties and disagreements.
One of the strongest disagreements we hear about verbal farm leases is whether one party can terminate the lease without giving the other much notice of that termination. For example, if Riley has rented land from Dale every year for the past ten years, can Dale terminate the lease for the 2020 planting season in February of 2020? What if Riley has already purchased inputs, added nutrients, or planted a cover crop? Or perhaps Dale passes away at the end of the year. Will Riley lose the lease if Dale’s children sell the land before planting season begins? These are the uncertainties that can lead to fighting, distrust, and sometimes, costly and difficult litigation.
A written farmland lease can prevent these uncertainties that can arise with verbal leases. A written lease can state how much notice is required in order for one party to terminate the lease. It can address other potentially problematic issues, such as who repairs drainage tiles, fences and access points, how to address new subsurface drainage and soil fertility needs, and whether and how to adjust annual lease rental rates. When an issue or question about the arrangement develops, the written farm lease can provide the already agreed-upon answer or solution.
When it comes to the peace and well-being of farmers, written farmland leases are a good thing to wish for. So let’s keep the Grinch of uncertainty from showing up in 2020, and put those farmland leases in writing. For our resources on what to include in a written farm lease, how to create an enforceable lease, and other farm lease needs, please visit this page.
Legalized hemp production in the U.S. took a major step forward today with the publication of the USDA’s rule establishing the “U.S. Domestic Hemp Production Program.” States and potential hemp growers have been awaiting this rule since the Farm Bill legalized hemp back in December 2018 but required that regulatory programs be established for overseeing hemp production. Today’s hemp rule sets up the regulatory framework for state departments of agriculture, Indian tribal governments and the USDA to license producers who want to grow hemp as a commodity crop.
What’s in the hemp rule?
The hemp rule lays out the requirements for establishing Hemp Production Plans within States or Tribal governments and creates a USDA administered licensing program for producers in areas that choose not to regulate hemp production. Other parts of the rule include definitions, appeal provisions, and reporting requirements. The rule also addresses the interstate transportation of hemp. Here’s a quick summary of provisions that affect Ohioans.
Requirements for State and Tribal Hemp Production Plans. A State or Tribe must include the following in a Hemp Production Plan that the USDA must approve before the State or Tribe can allow hemp production within its borders:
- Plans to maintain relevant producer and land information. A state must collect, maintain and provide USDA with contact and location information for each licensed hemp producer, including personal information about the individual or business and location information about the land where hemp is produced.
- Plans for accurate and effective sampling and testing. A plan must include procedures for collecting hemp flower samples; conducting sampling and testing of plants 15 days prior to any harvest; ensuring that sampling methods are reliable and represent a homogeneous composition of the sampling area; preventing commingling of plants from different sampling areas; requiring that producers are present during sampling; and allowing samplers to have unrestricted access to hemp plants and all land and facilities used for cultivating or handling hemp.
- Procedures to accurately test THC levels in samples. The rule lays out suggested reliable testing methods but does not establish a single, national testing procedure for determining whether a hemp plant falls beneath the 0.3 threshold for THC, the psychoactive ingredient that distinguishes hemp from marijuana. However, a State or Tribe must use a testing lab that is registered with the Drug Enforcement Agency and must require the lab to follow testing performance standards. The standards must include evaluation of “measurement of uncertainty,” a concept similar to determining the margin of error, and must account for the uncertainty in THC test results.
- Procedures for disposal of non-compliant plants. A State or Tribal plan must prohibit any handling, processing, or entering the stream of commerce of any hemp grown in an area that exceeds the acceptable THC level and must have procedures for disposing of the plants, verifying disposal, and notifying USDA of non-compliant plants, including provision of test results to USDA.
- Inspection procedures. A plan must include procedures for annual inspections of random samples of licensed producers.
- Reporting procedures. A plan must explain how a State or Tribe will submit all of the information and reports required by the rule, which includes monthly producer reports, monthly hemp disposal reports, and annual reports of total planted, harvested, and disposed acreage. The plan must also require producers to report crop acreage to the Farm Service Agency.
- Corrective action plans. A required corrected action plan will address procedures for allowing producers to correct negligent regulatory violations such as failing to provide a legal description, failing to obtain a license, and exceeding the THC level. The procedures must include a reasonable compliance date, reporting by the producer for two years after a violation, five years of ineligibility for producers with three negligence violations with a five-year period, and inspections to ensure implementation of corrective action plans.
- Enforcement for culpable violations. A plan must have procedures for reporting any intentional, knowing, willful or reckless violations made by producers to the U.S. Attorney General and chief law enforcement officers of the State or Tribe.
- Procedures for addressing felonies and false information. The plan must not allow a producer with a felony conviction relating to controlled substances to be eligible for a hemp license for a period of ten years from the felony conviction, and must prohibit a producer who materially falsifies information on an application to be ineligible for a license.
Plan review by USDA. The rule states that after a State or Tribe submits a hemp plan, USDA has 60 days to approve or deny the plan. The rule also allows USDA to audit approved state plans at least every three years.
Interstate commerce of hemp. The rule reiterates an important provision first mentioned in the 2018 Farm Bill: that no state can prohibit transportation of hemp or hemp products lawfully produced under an approved state plan or a USDA license.
USDA issued licenses. A producer in a state that chooses not to regulate hemp production may apply to the USDA for a license to cultivate hemp. The USDA’s sets forth its licensing program requirements in the rule, which are similar to provisions for State and Tribal Hemp Production Plans.
Effective date: today
It’s important to note that the USDA published the rule as an “interim final rule” that becomes effective upon its publication in the Federal Register, which is today, October 31, 2019. Federal law allows an agency to forego the typical “notice and comment” period of rulemaking and publish a final rule if there is good cause for doing so. USDA explains that good cause exists due to Congress’s interest in expeditious development of domestic hemp production, critically needed guidance to stakeholders who’ve awaited publication of the hemp rule, previous outreach efforts, and the public’s interest in engaging in a new and promising economic endeavor. The immediacy of USDA’s rule allows the agency to begin reviewing State and Tribal Hemp Production Plans now, in hopes that producers will be able to plant hemp for the 2020 growing season. USDA is seeking public input on the interim final rule for the next sixty days, however, and plans to consider such comments when it replaces the interim final rule with a “final rule” in two years time.
Is Ohio ready?
While Ohio’s Department of Agriculture (ODA) won’t be the first in line to have its hemp production program reviewed under the new USDA program, Ohio won’t be too far behind the twenty states and tribes that are already awaiting review. ODA proposed Ohio’s hemp regulations earlier this month after the General Assembly decriminalized hemp and authorized the agency to develop a hemp program in July of this year via Senate Bill 57. The USDA rule comes just one day after ODA closed the comment period on the proposed rules, which we summarize here. Once ODA publishes the final hemp regulations, it can proceed to submit Ohio’s Hemp Production Plan to the USDA for approval. Ohio’s timing may prove beneficial, as ODA now has the opportunity to review the USDA rule and ensure that Ohio’s plan will meet the federal requirements.
Our comparison of Ohio’s hemp laws and regulations to the USDA’s hemp rule indicates that Ohio is well prepared to meet the hemp rule requirements. Only a few provisions in the federal rule may require additional attention by Ohio before ODA submits its plan for USDA approval. Key among those are procedures for THC testing methods (technical details not included in Ohio’s proposed regulations) and procedures for corrective action plans (which are not clearly laid out in the proposed regulations but are addressed in Senate Bill 57). One potential conflict between the federal and Ohio rules regards destruction of hemp plants that exceed the allowable 0.3 THC level. The federal rule prohibits any further handling, processing or entering into the stream of commerce of any hemp plants from the sampling area and requires disposal of non-compliant plants, while Ohio’s regulations allow bare hemp stalks for fiber that is free of leaf, seed and floral material to be harvested, processed and used while all other material from plants that exceed 0.3 THC must be destroyed. We’ll soon see how ODA handles these and other issues when it submits Ohio’s Hemp Production Plan for USDA approval.
Read the interim final rule on “Establishment of a Domestic Hemp Production Program” here, which is also the site for submitting comments on the rule. USDA will accept public comments until December 30, 2019.
By Peggy Kirk Hall and Ellen Essman
Ohio’s newly created hemp program is one step further toward getting off the ground. On October 9, the Ohio Department of Agriculture (ODA) released its anxiously awaited proposal of the rules that will regulate hemp production in Ohio. ODA seeks public comments on the proposed regulations until October 30, 2019.
There are two parts to the rules package: one rule for hemp cultivation and another for hemp processing. Here’s an overview of the components of each rule:
1. Hemp cultivation
The first rule addresses the "cultivation" of hemp, which means "to plant, water, grow, fertilize, till or havest a plant or crop." Cultivating also includes "possessing or storing a plant or crop on a premises whre the plant was cultivated until transported to the first point of sale." The proposal lays out the following regulatory process for those who wish to cultivate hemp in Ohio.
Cultivation licenses. Anyone who wants to grow hemp must receive a hemp cultivation license from the ODA. Licenses are valid for three years. To obtain a license, the would-be hemp cultivator must submit an application during the application window, which will be between November 1 and March 31. The application requires the applicant to provide personal information about the applicant, and if the applicant is a business, information about who is authorized to sign on behalf of the business, who will be primarily responsible for hemp operations and the identity of those having a financial interest greater than ten percent in the entity. The cultivation license application will also seek information about each location where hemp will be grown, including the GPS coordinates, physical address, number of outdoor acres or indoor square footage, and maps of each field, greenhouse, building or storage facility where hemp will grow or be stored. Cultivators must pay a license application fee of $100, and once licensed, an additional license fee of $500 for each growing location, which the rule defines as "a contiguous land area or single building in which hemp is grown or planned to be grown." All applicants and anyone with a controlling interest in the hemp cultivation business must also submit to a criminal records check by the bureau of criminal identification and investigation.
Land use restrictions. The proposed rules state that a licensed hemp cultivator shall not:
- Plant or grow cannabis that is not hemp.
- Plant or grow hemp on any site not approved by the ODA.
- Plant, grow, handle or store hemp in or within 100 feet of a residential structure or 500 feet of a school or public park, unless for approved research.
- Co-mingle hemp with other crops without prior approval from ODA.
- Plant or grow hemp outdoors on less than one-quarter acre, indoors on less than 1,000 square feet, or in a quantity of less than 1,000 plants without prior approval from ODA.
- Plant or grow hemp within half a mile of a parcel licensed for medical marijuana cultivation.
- Plant or grow hemp on property that the license holder does not own or lease.
Hemp harvesting. Licensed growers would be required to submit a report to ODA at least 15 days before their intended harvest date and pay a pre-harvest sample fee of $150. ODA then has to sample the hemp for THC content, and only if approved can a cultivator harvest the crop, which in most cases must occur within 15 days after the sample is taken. Failing to harvest within the 15-day window might require a secondary sampling and sampling fee. A cultivator would be required to have a hemp release form from ODA before moving any harvested materials beyond the storage facility.
Random sampling. The proposed rules also allow for random sampling of hemp by ODA and provide details on how ODA will conduct the sampling and charge sampling fees. Any cultivator is subject to random sampling in each location where hemp has been cultivated. ODA will report testing results that exceed 0.3 THC to the cultivator, who may request a second sample. A cultivator must follow procedures for destroying any leaf, seed, or floral material from plants that exceed 0.3 THC and any material that was co-mingled with the 0.3 THC materials, but may harvest bare hemp stalks for fiber.
Destruction of hemp. Under the proposed regulations, a license holder must submit a destruction report before destroying hemp and ODA must be present to witness the destruction. The proposed rules also authorize ODA to destroy a crop that was ordered destroyed, abandoned, or otherwise not harvested and assess the costs against the licensee.
Reporting and recordkeeping are also important in the proposed rules. Licensed cultivators must submit a planting report on an ODA form for each growing location by July 1 or within 15 days of planting or replanting, which shall include the crop’s location, number of acres or square footage, variety name, and primary intended use. The rule would also require licensees to submit a completed production report by December 31 of each year. A licensee that fails to submit the required reports would be subject to penalties and fines. Cultivators must maintain planting, harvest, destruction and production reports for three years.
Control of volunteer plants. A licensee must scout and monitor unused fields for volunteer hemp plants and destroy the plants for a period of three years past the last date of reported planting. Failing to do so can result in enforcement action or destruction of the plants by ODA with costs assessed to the licensee.
Pesticide and fertilizer use. The laws and rules that apply to other crops will also apply to hemp, except that when using a pesticide on a site where hemp will be planted, the cultivator must comply with the longest of any planting restriction interval on the product label. ODA may perform pesticide testing randomly, and any hemp seeds, plants and materials that exceed federal pesticide residue tolerances will be subject to forfeiture or destruction without compensation.
Prohibited varieties. The proposed rule states that licensed cultivators cannot use any part of a hemp plant that ODA has listed as a prohibited variety of hemp on its website.
Clone and seed production. Special rules apply to hemp cultivators who plan to produce clones, cuttings, propagules, and seed for propagation purposes. The cultivator can only sell the seeds or plants to other licensed cultivators and must maintain records on the variety, strain and certificate of analysis for the “mother plants.” The licensee need not submit a harvest report, but must keep sales records for three years of the purchaser, date of sale, and variety and number of plants or seeds purchased.
Cultivation research. Universities may research hemp cultivation without a license but private and non-profit entities that want to conduct research must have a cultivation license. Cultivation research licensees would be exempt from many parts of the proposed rules, but must not sell or transfer any part of the plants and must destroy the plants when the research ends.
Enforcement. The proposed rule grants authority to the ODA to deny, suspend or revoke cultivation licenses for those who’ve provide false or misleading information, haven’t completed a background check, plead guilty to a felony relating to controlled substances within the past 10 years, or violated the hemp laws and rules three or more times in a five-year period.
2. Hemp processing
The proposed rules package by ODA also addresses processing, which the rule defines as “converting hemp into a hemp product” but does not include on-farm drying or dehydrating of raw hemp materials by a licensed hemp cultivator for sale directly to a licensed hemp processor. Because of this definition, many farmers who want only to grow and dry hemp would need only a cultivation license. Growers who want to process their licensed hemp into CBD oil or other products, however, must also obtain a processing license. The processing rules follow a similar pattern to their cultivation counterpart, as follows.
Processing licenses. In addition to submitting the same personal, business and location information as a cultivation license requires, a hemp processing license application must list the types of hemp products that the processor plans to produce. An “extraction operational plan” including safety measures and guidelines is required for processors who want to extract CBD from hemp to produce their product, and an applicant must indicate compliance with all building, fire, safety and zoning requirements. The amount of the license fee depends on what part of the hemp plant the processor plans to process. Processing raw hemp fiber, for example, requires a $500 license fee for each processing site, whereas processing the raw floral component of hemp requires a $3000 fee for each site. Like the cultivation license, a processing license is valid for three years. Applicants and those with a controlling interest in the business must submit to a background check.
Land use restrictions. The proposed regulations would prevent a licensed processor from:
- Processing or storing any cannabis that is not hemp.
- Processing or storing hemp or hemp products on any site not approved by ODA.
- Processing, handling, or storing hemp or hemp products in or adjacent to a personal residence or in any structure used for residential use or on land zoned for residential use.
- Processing hemp within 500 feet of a school or public park, except for approved research.
Financial responsibility. A licensed processor must meet standards of financial responsibility, which require having current assets at least $10,000 or five percent of the total purchase of raw hemp materials in the previous calendar year, whichever is greater, and possessing a surety bond.
Inspection and sampling. As with cultivation licensees, hemp processing licensees would be subject to inspection and sampling by ODA under the proposed rule.
Food safety regulations. The proposed rule requires hemp processes to comply with federal and state food safety regulations.
Sources and extraction of cannabinoids (CBD). A processor who wants to extract or sell CBD products must obtain the materials from a licensed or approved cultivator or processor in Ohio or another state with hemp cultivation licenses. The regulation outlines components of the extraction operational plan that a processor must submit with the processing application, as well as acceptable extraction methods and required training.
Product testing. A hemp processor must test hemp products at an accredited testing laboratory before selling the products. The proposed rule describes the testing procedures, which address microbial contaminants, cannabinoid potency, mycotoxins, heavy metals, pesticide and fertilizer residue and residual solvents. There are testing exemptions, however, for hemp used exclusively for fiber, derived exclusively from hemp seed and hemp extracts. The testing laboratory must create a certificate of analysis for each batch or lot of the tested hemp product.
Processor waste disposal. Under the proposed rule, a licensed processor must follow procedures for proper disposal of hemp byproducts and waste and must maintain disposal records.
Product labeling requirements are also proposed in the rule. A processor must label all hemp products except for those made exclusively from hemp fiber as outlined in the rule and in compliance with federal law and other existing Ohio regulations for standards of identify and food coloring.
Recordkeeping. As we’d expect, the proposal states that hemp processors must maintain records for five years that relate to the purchase of raw, unprocessed plant materials, the purchase or use of extracted cannabinoids, and the extraction process.
Prohibited products. Finally, the proposed rules include a list of hemp products that cannot be offered for sale, which includes hemp products with over 0.3 percent THC by dry weight basis, hemp products which laboratory testing determines do not meet standards of identity or that exceed the amount of mytoxins, heavy metals, or pesticides allowed, and any hemp products produced illegally.
What’s next for the hemp rules?
Keep in mind that these rules are not yet set in stone; they are a simply a proposal for hemp licensing rules in Ohio. Those interested in cultivating or processing hemp in the future should read the draft rules carefully. The proposed rule for hemp cultivation is here and the proposal for hemp processing is here. Anyone can submit comments on the proposed rules here. Your comments could affect what the final hemp rules require for hemp cultivators and processors. After ODA reviews all comments, it will issue its final hemp licensing regulations.
Federal law requires that after Ohio finalizes its rules, ODA must submit them to the USDA for approval. That approval won’t occur, however, until USDA completes its own hemp regulations, which are due out in proposal form any day now. Ohio’s rules will become effective once USDA approves them, hopefully in time for the 2020 planting season. Stay tuned to the Ag Law Blog to see what happens next with hemp production in Ohio.
Farm Science Review is upon us, and we’re hoping that the low-80s forecast holds true. In addition to checking the weather report, we’ve been monitoring the news for developments in the agricultural law world, and quizzing each other on agricultural law topics so that we’re ready to answer your questions. While we hope you come see our presentations (speaking schedule available HERE), we won’t make you wait until you see us at the Molly Caren Agricultural Center in London to learn what we’ve found in the news.
Here’s our latest gathering of agricultural law news you may want to know:
Family Farmer Relief Act of 2019 signed into law. We’ve talked about this bill on the ag law blog, and now it’s official. With the President’s signature, the debt limit for family farmers seeking to reorganize under Chapter 12 bankruptcy increases to $10 million from an adjusted $4.4 million.
No vote on community rights in Williams County, yet. A proposed county charter for Williams County, Ohio containing language similar to the Lake Erie Bill of Rights may not make it on the November ballot. The Ohio Supreme Court recently refused to compel the Williams County Board of Elections (BOE) to include the charter on the ballot for procedural reasons.
The charter would have declared that the people of Williams County have the right to a healthy environment and sustainable community, and that the Michindoh Aquifer and its ecosystem have the right to exist, flourish, evolve, regenerate. Further, the aquifer would have the right of restoration, recovery, and preservation, including the right to be free from interferences such as the extraction, sale, lease, transportation, or distribution of water outside of the aquifer’s boundary.
Even though the petition to put the charter on the ballot had enough signatures, the BOE believed that the language of the charter violated Ohio law, and therefore exercised its power to reject the petition and keep it off the ballot. The petitioners appealed the BOE’s decision to the Williams County Court of Common Pleas, and that court agreed with the BOE. Instead of going to the Court of Appeals, the petitioners tried to go directly the Ohio Supreme Court because the BOE will soon print the November ballots. The Ohio Supreme Court said the petitioners should have gone to the Court of Appeals first, and that it will not decide on whether the BOE has to include the charter on the ballot until the petitioners do so.
This doesn’t mean the end for the proposed charter, but rather that more court time is in the proposed charter’s future. To read the Ohio Supreme Court’s opinion, click HERE. To read the text of the proposed charter, click HERE.
Hemp, hemp, and more hemp. Legal and policy updates on hemp continue to trickle down from state and federal officials. Since our last blog post, when we released our latest law bulletin on the legal status of hemp in Ohio, there have been a couple additional developments.
One of the latest updates we’ve heard from USDA is that industrial hemp growers in states with a USDA-approved hemp production plan may apply for crop insurance to cover hemp grown for fiber, flower, or seeds starting next year. Ohio is in the process of putting together a hemp program to send to the USDA for approval. Ohio farmers still cannot legally grow hemp until the Ohio Department of Agriculture creates a hemp program and the USDA approves that program, but we are expecting rules to be released from those agencies in the coming weeks. For more about the crop insurance update, read the Risk Management Agency’s press release HERE.
Closer to home, we’ve heard that the Ohio Department of Agriculture (ODA) has requested $3.3 million from the Ohio Controlling Board for staffing along with IT equipment and support. Further, ODA has made statements predicting that it expects to have its rule hemp program rule package ready by the end of the year.
Federal court orders U.S. EPA to reconsider Renewable Fuel Standards waivers and their impact on endangered species. The U.S. EPA is responsible for creating fuel standards that incorporate and blend renewable sources of energy under the Clean Air Act. These standards tell refineries how much of their fuel blend must come from renewable sources of energy; however, the U.S. EPA also has the authority to grant waivers to companies that would have difficulty meeting the standard. The court noted that some industry groups felt that the 2018 rules were too strict, while others argued that they were too lax. The court ended up dismissing all but one of the claims against the U.S. EPA, saying that Congress gave it discretion in developing the standards. However, the court sent the rule back to the U.S. EPA due to an argument by environmental groups that the federal agency failed to conduct a thorough review of the risk to endangered animals, plants, and habitats under the Endangered Species Act. Many farm groups have criticized the Trump administration’s granting of waivers for causing a reduction in demand for their products from energy companies, but it appears that they will have to make their arguments to the administration rather than to the courts. To read the D.C. Circuit’s opinion, click HERE.
These days, industrial hemp never seems to leave the news. Just this week, the U.S. Court of Appeals for the Ninth Circuit declined to decide a case involving the interstate shipment of hemp between Oregon and Colorado by way of Idaho. Hemp is illegal in Idaho, where the product was seized and the driver was arrested, even though the 2018 Farm Bill allows for the interstate transportation of hemp. The Ninth Circuit, reviewing the case, determined that the state court actions needed to be decided before federal courts could hear the case. As you may be aware, Ohio also made news this summer when the state passed a bill legalizing hemp in the state.
All of these developments involving industrial hemp may leave you with many questions. What is hemp? What did the 2018 Farm Bill do? What does Ohio’s new law do? Most importantly, can I grow and process hemp right now? To help farmers and others interested in the status of the hemp industry, we have recently added a law bulletin entitled “Legal or Not? Growing Industrial Hemp in Ohio” to our Ag Law Library. There, we sort out the above questions and more. We also discuss the anticipated development of federal and state hemp regulations. The bulletin is available for you to read here.
It’s been a busy July in the ag law world, to say the least. The Ohio General Assembly officially passed the hemp bill and a budget, RMA adjusted its prevent plant restrictions, and we have seen more activity on LEBOR. With everything that is going on, it’s time for another ag law harvest. Here’s our latest gathering of agricultural law news you may want to know:
Ohio Department of Agriculture announces website for future hemp program. Just days after S.B. 57 took effect, the Ohio Department Agriculture (ODA) launched a new webpage declaring “Hemp Is Now Legal.” However, the webpage goes on to explain that hemp cultivation, processing, and research licenses, which are required to legally do those activities, are not yet available as the rules and regulations have not been developed. ODA says the goal is to have farmers licensed and able to start planting hemp by spring 2020. As for CBD, the webpage says that it is now legal to sell properly inspected CBD products in Ohio. Note the “properly inspected” caveat. ODA wants to test CBD products for safety and accurate labeling before the product is sold to Ohio consumers. If they have not already done so, those wanting to sell CBD products should contact ODA to have their product tested. You can view the new webpage HERE.
Judge says $2 billion damages award is too much in Roundup case. A California state judge recently reduced the punitive damages award granted to Alva and Alberta Pilliod from $2 billion to $69 million, and reduced their compensatory damages from $55 million to $17 million. All combined, the couple would still receive $86.7 million in damages. As we previously discussed, the couple successfully convinced a jury that the glyphosate in Roundup significantly contributed to causing their non-Hodgkin’s Lymphoma. In reducing the awards, the judge explained that the punitive damages were excessive and unconstitutional because they exceeded the U.S. Supreme Court’s restrictions. However, the judge denied Bayer’s request to strike the punitive damages award outright.
U.S. EPA denies petition to ban use of cholrpyrifos pesticide. Back in 2007, environmental groups petitioned to have the U.S. EPA revoke tolerances and registrations for the insecticide chlorpyrifos, citing harmful effects to people and nature. Without getting into the merits of the allegations, the timeline and history of the U.S. EPA’s decision is fairly interesting. The U.S. EPA had not completed its review of the chemical by 2015, so the groups took the agency to court, where they received a court order compelling the U.S. EPA to make a decision. The agency issued a proposed rule at the end of 2015 that would have revoked the tolerances; however, the federal court said that the U.S. EPA had not completed a full review nor properly responded to the 2007 petition. Even though it made a decision, the court wanted to see more evidence of a full administrative review. By the time the agency had a chance to fully review the chemical’s effects, the Obama EPA had turned into the Trump EPA. In March 2017, the U.S. EPA issued a denial order regarding the petition, which essentially threw out the petition. The environmental groups submitted an objection shortly after the denial order. By July 2019, the U.S. EPA had a chance to think some more and issued a final order denying the objections. As it stands now, the agency has decided not to revoke tolerances or registrations for chlorpyrifos. To read the agency’s final order denying the objections, click HERE.
Animal Disease Traceability program to require RFID tagging for cattle and bison by 2023. The USDA’s Animal and Plant Health Inspection Service is looking to fully bring animal disease traceability into the digital world, at least for beef and dairy cattle and bison. By requiring radio frequency identification (RFID) tags, the service says that animal health officials would be able to locate specific animals within hours of learning about a disease outbreak, significantly less than with paper records. Starting at the end of 2019, the USDA will stop providing free metal tags, but would allow vendors to produce official metal tags until the end of 2020. At that time, only RFID tags may be used as official tags. Starting on January 1, 2023, RFID tags will be required for beef and dairy cattle and bison moving interstate. Animals previously tagged with metal ear tags will have to be retagged, but feeder cattle and animals moving directly to slaughter will be exempt. To learn more, view the USDA’s “Advancing Animal Disease Traceability” factsheet HERE.
Senators want to fund more ag and food inspectors at U.S. ports of entry. Citing the national interest to protect the nation’s food supply, four U.S. Senators have introduced a bill that would provide the U.S. Customs and Border Protection with additional funding over the next three years. In each of the three fiscal years, the funds would be used to hire, train, and assign 240 additional agriculture specialists, 200 new agriculture technicians who provide support to the agriculture specialists, and 20 new canine teams. The personnel would work at U.S. ports of entry, including seaports, land ports, and airports across the country. If passed, S.2107 would require the Comptroller General of the United States to brief congressional committees one year after the bill’s enactment on how well federal agencies are doing at coordinating their border inspection efforts and how the agriculture specialists are being trained. The bill comes months after U.S. Customs and Border Protection seized nearly a million pounds of Chinese illegally smuggled pork from China, where African swine fever has ravaged the country’s pork industry. For more information about the bill, click HERE.
Cannabis decriminalization bill introduced in Congress. Congressman Jerrold Nadler (D-NY) has introduced H.R. 3884 with the aim to do four things: 1) decriminalize cannabis at the federal level, 2) remove cannabis from the federal controlled substances schedules, 3) provide resources and rehabilitation for certain people impacted by the war on drugs, and 4) expunge certain criminal convictions with a cannabis connection. The bill currently has 30 co-sponsors, including 29 Democrats and 1 Republican. None of Ohio’s members of Congress have signed on as a co-sponsor at this time. The bill follows the recent change in status for hemp, which found favor in the 2014 and 2018 Farm Bills. However, that change in status was largely predicated on the argument that hemp is not marijuana, so it remains to be seen whether the political climate is ready to loosen restrictions on marijuana as well. For more information about the bill, click HERE.
The funny thing about a "budget bill" is that it’s not all about the budget. Many laws that are not related to the budget are created or revised within a budget bill. That’s the case with Ohio’s HB 166, the "budget bill" signed on August 18 by Governor Dewine. In the midst of the bill’s 2,602 pages are revisions to an important law for agricultural landowners—the “Right to Farm” Law.
Ohio’s Right to Farm Law, also referred to as the "Agricultural District Program," provides immunity from a civil nuisance claim made by those who move near an existing farm. To receive the immunity under the old law, the land must be enrolled as an “agricultural district” with the county auditor, agricultural activities have to be in place first, i.e., before the complaining party obtained its property interest, and the agricultural activities must not be in conflict with laws that apply to them or must be conducted according to generally accepted agricultural practices. The immunity comes in the form of an affirmative defense that a farmer can raise if sued for nuisance due to agricultural activities such as noise, odors, dust, and other potential interferences with neighbors. If the landowner can prove that the activities are covered by the Right to Farm law, the law requires dismissal of the nuisance lawsuit. For years, we’ve been encouraging farmers to enroll land in this program to protect themselves from those who move out near a farm and then complain that the farming activities are a nuisance.
The new revisions to the law in the budget bill change the requirements for the land and agricultural activities that can receive Right to Farm immunity. In addition to protecting agricultural activities on land that is enrolled with the county auditor as agricultural district land, the law will now also protect the following from nuisance claims:
- Agricultural activities on land devoted exclusively to agricultural use in accordance with section 5713.30 of the Revised Code, which is Ohio’s Current Agricultural Use Valuation Program (CAUV), and
- Agricultural activities conducted by a person pursuant to a lease agreement, written or otherwise.
These two provisions significantly expand the geographic scope of the Right to Farm law. A landowner may not have to take the step to actively enroll and re-enroll land in the agricultural district program in order to obtain Right to Farm immunity. Instead, the agricultural activities are automatically covered by the Right to Farm law if the land is enrolled in Ohio’s CAUV property tax reduction program or is under a lease agreement, presumably a farmland lease, whether that lease is in writing or is verbal. This means that any land in Ohio that is actively being used for commercial agricultural production will likely qualify for the Right to Farm law’s nuisance protection.
The budget bill also added new language to the Right to Farm law that clarifies that “agricultural activities” means “common agricultural practices.” The law specifically includes the following as “common agricultural practices:”
- The cultivation of crops or changing crop rotation;
- Raising of livestock or changing the species of livestock raised;
- Entering into and operating under a livestock contract;
- The storage and application of commercial fertilizer;
- The storage and application of manure;
- The storage and application of pesticides and other chemicals commonly used in agriculture;
- A change in corporate structure or ownership;
- An expansion, contraction, or change in operations;
- Any agricultural practice that is acceptable by local custom.
This new language answers a question that we’ve long heard from farmers: if I expand my farming operation or change it from the farming activities that I, my parents or grandparents have always done, will I still have Right to Farm protection? We couldn’t answer this question with assurance because the law is unclear about whether it would also protect such changes. Under the new law, the answer is clear: transitions to new or expanded agricultural activities will also receive Right to Farm immunity. The law also states that certain practices, such as storing and applying fertilizers, pesticides, chemicals and manure, are “common agricultural practices.”
The final change to the Right to Farm law concerns a provision that addresses farmers suing other farmers for nuisance. Under the old law, Right to Farm immunity does not apply if the plaintiff who brings the nuisance law suit is also involved in agricultural production. That is, farmers don’t receive Right to Farm protection from nuisance claims by other farmers. The new law removes this provision. Under the revised law, farmers will be able to raise the Right to Farm law as an affirmative defense if sued for nuisance by another agricultural producer.
Many lawmakers who were focused on understanding and negotiating the financial provisions in Ohio’s recent budget bill may have missed the inclusion of changes to our Right to Farm law in the bill. Even so, with the passage of the budget bill, the legislature significantly expanded the reach of the Right to Farm Law and agricultural activities in Ohio now have broad protections from nuisance lawsuits.
Find the changes to Ohio’s Right to Farm Law--Ohio Revised Code 929.04, on pages 308 and 309 of HB 177, which is available on this page.
Tags: Right to Farm law; nuisance; budget bill; LEBOR; Lake Erie Bill of Rights; affirmative defenses; immunity
It’s been a busy week in Columbus, with the Ohio General Assembly sending multiple bills to Governor Mike DeWine for his signature. One of the bills is one we have been following very closely—Substitute Senate Bill 57, or the “hemp bill.”
Ohio’s hemp bill was originally introduced in the Senate in February. The bill was written in response to the 2018 federal Farm Bill, which gave states the option to create hemp programs so that citizens within the state could cultivate and sell hemp products. For a breakdown of the Farm Bill, see our post here. Ohio’s hemp bill passed the Senate in March, and was sent to the House, where numerous amendments were made.
The Ohio House made many changes to the Senate’s original hemp bill. In June, we highlighted those changes in a post you can find here. Most importantly, the House version, in addition to requiring a license to cultivate hemp, also requires a license to process hemp into different products. Additionally, the House’s substitute version of the bill created a Hemp Marketing Program, which would be similar to other grain and soybean marketing programs, added legally cultivated hemp to the list of agricultural uses permitted under CAUV, required setbacks between hemp and medical marijuana cultivation, and banned people from obtaining both hemp licenses and medical marijuana licenses, among other changes.
This week’s developments
We were not expecting the hemp bill to pass the General Assembly this week, as House Speaker Larry Householder indicated in June that the House would not vote on the bill until September 2019. However, on July 17, 2019, the bill passed in the House with emergency language, and the changes were quickly accepted by the Senate. During the July 17 afternoon legislative session, we were given some possible insight into why the bill passed so quickly and unexpectedly; State Representative Koehler spoke about the need to help Ohio’s farmers given all the struggles they currently face. Representative Koehler viewed quick passage of the bill as an opportunity for Ohio farmers to potentially have a new commodity crop in the ground next spring.
The emergency language in the final version of the bill means that once signed by the Governor, the law will go into immediate effect. In other words, once the bill passes, hemp and hemp products will be decriminalized in Ohio and the Ohio Department of Agriculture (ODA) will be able to immediately begin the process of writing regulations to carry out the new hemp cultivation and processing programs.
Great! Can I plant hemp right now?
No. Even with the emergency language in the bill, a few things still need to happen before farmers can plant hemp. First and most obviously, Governor DeWine still needs to sign the bill into law. Then, ODA must begin its hemp program rulemaking. The rules will not become effective until the United States Department of Agriculture (USDA) approves of Ohio’s hemp program. After USDA approves the program, then ODA will be able to approve licenses for those who want to cultivate and process hemp. The Ag Law Blog will keep you updated on the hemp rules and USDA’s decision—stay tuned!