Crop Issues

By: Peggy Kirk Hall, Monday, April 14th, 2014

The Ohio Legislature is one step closer to creating a unique fertilizer applicator certification program for Ohio agriculture.  The Ohio House of Representatives recently approved the measure in S.B. 150, which had already passed the Senate in January (see our related post.)   The legislation aims to reduce fertilizer runoff into Ohio's waters in response to recent problems with algae blooms in Lake Erie and Grand Lake St. Mary's.   Other states with fertilizer applicator certification programs focus on professional, turf or urban applications of fertilizer, but Ohio's program would require farmers applying fertilizers on their own land to complete the knowledge-based certification program. 

An amendment by the House extends the certification requirement to anyone applying fertilizer for agricultural production on more than 50 acres of land, rather than on more than 50 "contiguous" acres as approved by the Senate.  The amendment will likely expand the program to more smaller-acreage farmers.    Although urged to do so, neither the House of Representatives nor the Senate agreed to extend the proposal even further by including "manure" in the definition of "fertilizer."

The Senate must now approve the House-amended version when it reconvenes in early May.  Upon Senate approval, the legislation would move to the Governor by mid-May.  If enacted, the bill gives the Ohio Department of Agriculture three years to establish and implement the fertilizer applicator certification program.  The bill also contains provisions for voluntary nutrient mangement plans, operation and management plans for animal feeding operations, and a few changes to Ohio's fertilizer license laws.

Watch for our final analysis of S.B. 150 as it continues the legislative process next month.

 

By: Peggy Kirk Hall, Wednesday, March 05th, 2014

The Ohio Department of Agriculture (ODA) has announced that pesticide applicators, commercial sensitive crop producers and apiaries may now use the online Ohio Sensitive Crop Registry (OSCR).  ODA developed OSCR as a “voluntary informational tool designed to allow stakeholders an effective way to communicate and protect pesticide-sensitive crops and apiaries.”  The registry will enable applicators to determine whether there are any sensitive crops in an area before applying pesticides.

How does the registry work?

ODA designed the tool for registered apiaries and "commercial" sensitive crop producers who produce at least one-half acre of a single type of sensitve crop.  The ODA defines sensitive crops as follows:

Apiaries – any ODA-registered apiary
Aquaculture – a location with any fish and other aquatics grown outdoors
Brambles – aggregated total of fruit such as raspberries and blackberries of at least .5 acres
Certified Organic – an organic farm certified by a USDA-accredited agent; certified organic crops, forage, and livestock of at least .5 acres
Nurseries – nursery stock and flowers of at least .5 acres
Greenhouse/High Tunnels – must be for commercial use and produce at least .5 acre of any combination of crops annually
Orchards – fruit or nut-producing trees of at least .5 acres
Grapes – vineyards of at least .5 acres
Tomatoes – all tomato cultivars of at least .5 acres
Fruit (other) - non-tree simple, aggregate and multiple fruits of at least .5 acres, excluding tomatoes, grapes, and brambles
Herbs – herbs and plants for spices of at least .5 acres
Vegetables – root and leafy vegetables, legumes, and pumpkins of at least .5 acres
 

Registration on OSCR is completely voluntary; a sensitive crop producer may create an account on the OSCR website and map the locations of their crops.  ODA will then verify the producer's information before it is available on the registry.  Private and commercial pesticide applicators may also voluntarily register on the site.  If approved by ODA, an applicator may search the registry to identify the locations of sensitive crops and apiaries.  The registry includes a mapping tool with options to search by address, parcel number, township, county, city, village and other methods.

It is important to note that the information provided in the registry is not available to the general public.  It is only available to those who have registered on OSCR and have been verified by ODA.

Implications for crop producers and pesticide applicators

The registry offers a good risk management tool to sensitive crop producers.  By allowing producers to communicate the existence of sensitive crops, which are typically not as easily observed as other crops, the registry should reduce pesticide drift impacts.  One possible implication for sensitive crop producers is the risk of sharing crop information through the registry, but the ODA verification process should minimize potential misuse of registry information.

Reduced drift impacts will also benefit pesticide applicators who use OSCR.  However, the voluntary nature of the registry raises potential implications for pesticide applicators.  What is the liability exposure for an applicator who knows the registry is available but chooses not to use the tool?  Could a harmed party argue that an applicator "should have known" about a sensitive crop because it was registered?  Does the availability of the information create a new legal duty for  pesticide applicators--a duty to take the additional step to identify nearby sensitive crops?  Could an insurer refuse to cover an applicator who failed to consult the registry?   Until Ohio courts receive and answer these legal questions, we don't have clear answers.

The caution to pesticide applicators, then, is to take the OSCR seriously.  Don't overlook the registry because participation is "voluntary" rather than mandatory.   The registry can provide important information that could reduce pesticide exposure to sensitive crops; a pesticide applicator who fails to utilize the information might be increasing his or her potential liability if pesticide drift occurs.

To learn more about the Ohio Sensitive Crop Registry, visit: http://www.agri.ohio.gov/scr/.

By: Peggy Kirk Hall, Tuesday, February 04th, 2014

The federal Occupational Safety & Health Administration (OSHA) generated controversy recently when several of its enforcement actions against farms with grain bin storage hit the news headlines.   The enforcement actions are contrary to a general understanding in the agricultural community that OSHA does not have authority to enforce its regulations against farms with ten or fewer employees, referred to as the “small farms rider.”  While claiming that it does not intend to enforce beyond its authority, OSHA justifies its actions in an internal agency memorandum that interprets the small farms rider.  Is OSHA’s justification reasonable or contrary to law?  Here’s the language of the small farms rider and OSHA’s explanation of its authority:

  • The Small Farms Rider.  The 2014 Consolidated Appropriations Act passed by Congress, like every previous appropriations bill since 1976, states that none of the funds appropriated by Congress to OSHA “shall be obligated or expended to prescribe, issue, administer, or enforce any standard, rule, regulation, or order under the Act which is applicable to any person who is engaged in a farming operation which does not maintain a temporary labor camp and employs 10 or fewer employees.”  (emphasis added)
  • The agency focuses on the small farm rider’s use of the term “farming operation” which, according to the agency’s prior interpretation, means “any operation involved in the growing or harvesting of crops, the raising of livestock or poultry, or related activities conducted by a farmer on sites such as farms, ranches, orchards, dairy farms or similar farming operations.”  
  • Not included in the definition of “farming operations,” according to the agency, are those establishments engaged in performing services on crops subsequent to their harvest with the intent of preparing them for market or further processing, including activities such as crop cleaning, sun drying, shelling, fumigating, curing, sorting, grading, packing and cooling, corn drying and shelling, grain drying, cleaning, and fumigating.  Why are these not considered farming operations?   Because the North American Industrial Classification System (NAICS) and Standard Industrial Codes (SIC) differentiate agricultural businesses that conduct crop and livestock production from those that conduct post-production activities.   Small farms with grain storage structures where grain is fumigated, dried, or processed subsequent to harvest and sold into the market would fall under the post-harvest NAICS codes rather than the agricultural production codes and therefore are not “farming operations” exempted by the small farms rider, states OSHA.    
  • The agency also notes that grain handling operations are not “core agricultural operations” according to OSHA’s federal regulations.  These regulations state that “core agricultural operations” include activities such as growing and harvesting crops, plants, vines, fruit trees, nut trees, ornamental plants, egg production, the raising of livestock, poultry, fish and livestock products.
Why is OSHA working so hard to distinguish grain storage activities from other farming activities?  Statistics could be one reason.   The agency notes that over 900 grain entrapment fatalities have occurred in the past 50 years with the highest on record occurring in 2010, when 26 workers died in grain engulfments.  This led to agency efforts to increase attempts to prevent deaths and injuries (see, for example, “OSHA works with The Ohio State University to promote safe practices”).  The agency also points to statistics indicating steadily growing amounts of on-farm grain storage capacity.  Finding a way to increase inspection opportunities on the expanding number of farms with grain storage would be consistent with OSHA’s efforts to reduce fatalities and injuries.  Unfortunately, recent enforcement actions against farms in Nebraska and Ohio appear punitive in nature and not simply focused on reducing risk.
 
What’s next?  Many members of Congress are pushing OSHA to revise its interpretation of the small farms rider.  OSHA has agreed, stating that it plans to look to USDA for advice on which post-harvest activities are "intimately related to farming activities and which ones aren't," according to OSHA deputy assistant secretary Jordan Barab.  An alternative to OSHA action would be for Congress to provide its own definition of “farming operations” rather than deferring to the agency’s interpretation.  
 
The important issue here:  grain handling safety.  Agriculture prides itself on knowing how best to handle its own issues.  As Congress and OSHA bicker over regulatory authority, let’s hope agriculture stays focused on grain handling practices and continues to reduce grain-related deaths.  For resources on safe grain handling, visit OSU’s Agricultural Safety & Health Program at http://agsafety.osu.edu/resources
By: Peggy Kirk Hall, Friday, January 24th, 2014

The Ohio Senate has approved a bill directing the Ohio Department of Agriculture (ODA) to establish a fertilizer applicator certification program in Ohio.  The sponsors of Senate Bill 150, Senator Cliff Hite and Senator Bob Peterson, designed the legislation to address agricultural nutrient runoff into Ohio waterways and the algae problems in Grand Lake St. Marys and Lake Erie.  According to Senator Hite, the bill hinges on a new education and certification program that will give farmers additional information about fertilizer and nutrient use best practices.    

Here are answers to a few basic questions farmers might have about the proposed program:

When would the program begin?  If the bill is passed by the Ohio House of Representatives, the fertilizer application certification program would begin on September 30 on the third yearsfollowing the law’s effective date.   

Who would have to be certified?  Someone who applies “fertilizer” for agricultural production on land more than 50 acres in size would have to be certified by ODA as a fertilizer applicator, or would have to be acting under the instruction of a certified fertilizer applicator. 

Would there be any exemptions from the program?  Those who would make applications of fertilizer on land parcels of 50 acres or less would be exempt from the certification requirement.  The bill would also allow the ODA director to establish additional exemptions for certain persons or certain “types of cultivation.”

What fertilizers would the program cover?  Under the bill, “fertilizer” means any substance containing nitrogen, phosphorus, or potassium or any recognized plant nutrient element or compound that is used for its plant nutrient content or for compounding mixed fertilizers.  The definition of fertilizer does not include lime, manure and residual farm products such as bedding, wash waters, waste feed, silage drainage and certain dead animal composts, unless those are mixed with fertilizer materials or distributed with a guaranteed analysis.

What would the certification program involve?  The Senate’s bill directs that the program must educate applicants on the time, place, form, amount, handling, and application of fertilizer—commonly referred to as the "4-Rs" of nutrient stewardship (right fertilizer source at the right rate, at the right time and in the right place).  The bill also states that the program must "serve as a component of a comprehensive state nutrient reduction strategy addressing all sources of relevant nutrients" and must "support generally practical and economically feasible best management practices."

Would there be a certification fee?  The bill allows the ODA to establish a fee for applicants who seek certification, but the fee may not exceed the fee charged for the state’s pesticide applicator certification program.  Additionally, the bill exempts persons who hold an Ohio commercial or private pesticide applicator’s license from paying an additional application fee if they also seek fertilizer application certification.

Other important provisions in Senate Bill 150 include:

Recordkeeping requirements.  Certified applicators would have to maintain fertilizer application records for at least three years from the date of a fertilizer application.  The records must include the date, place and rate of application, an analysis of the fertilizer and the name of the person applying the fertilizer.  Applicators would not be required to submit the records to ODA on a regular basis, but would have to make the records available upon a request by the agency.

Emergency revocation and suspension powers.  The bill would allow the ODA director to immediately deny, suspend, revoke, refuse to renew or modify a fertilizer applicator certificate if there is "substantial reason to believe the certificate holder recklessly applied fertilizer in such a manner that an emergency exists that presents a clear and present danger to human or animal health."

Voluntary Nutrient Management Plans.  The bill would allow a person who owns or operates agricultural land to develop a voluntary nutrient management plan in collaboration with Ohio State University, the Soil and Water Conservation District or the Natural Resource Conservation Service or its certified providers and submit the plan for approval by the Soil and Water Conservation District.  A voluntary nutrient management plan would be an important critieria for immunity from civil liability, discussed below.

Legal Defense against Civil Actions.   Under the bill, a person sued in a claim involving liability for an application of fertilizer would have a legal defense that would prevent liability upon showing these three criteria:

  • The person is a certified fertilizer applicator or under the control of a certified applicator;
  • The person properly maintained fertilizer application records as required by the certification program;
  • The fertilizer was applied according to and in substantial compliance with an approved voluntary nutrient management plan.

Watch now for the agricultural nutrient management bill to be introduced in the Ohio House of Representatives for final approval.  More information about S.B. 150 is available here.

Litigation that arose from a drainage improvement project completed in 2002 has finally ended with a decision by the Ohio Supreme Court.  The court announced today that it will not accept the case for review, which allows the ruling by the Third District Court of Appeals in favor of the Henry County Engineer to remain in place.

Richard and Rodney Rohrs sued the county engineer  and several staff members in 2005 after a drainage project completed by the county flooded several acres of a farm field the Rohrs had rented from Gerald Westhoven.  In the late 1990s, Westhoven approached the Henry County Engineer about flooding problems on Westhoven's farm and the possibility of cleaning out the open drainage ditch that ran between his land and the county road.  The engineer proposed an alternative solution, to lay drainage tiles and fill the ditch, and offered to classify the work as a road safety improvement project to be handled through the engineer's budget rather than through the petition ditch process that would result in assessments on property owners.

The county engineer installed the new drainage system in 2002.  Westhoven entered into a lease for the land with the Rohrs in the Spring of 2003.  The Rohrs planted a tomato crop on the parcel; by July, part of the field was under water.   After the harvest season, the county engineer and Westhoven attempted to locate a drainage tile that could be the source of the flooding but they could not find any tile in the flooded area.  The county then installed a new catch basin near Westhoven's property to resolve the flooding problem, with plans to tie in any field tile that Westhoven might later discover on his land.  The Rohrs continued to lease the farmland from Westhoven.

According to witness testimony, the cause of the 2003 flooding was a drainage tile and catch basin just south of Westhoven's property that had been cut off during construction of the road improvement project drainage system; the engineer's staff  had filled the tile and catch basin because it did not appear to be a functioning tile and did not exist on any of the county's plans.  Excavation on the Westhoven property several years later revealed a drainage tile located just 15 feet from the filled tile and catch basin.  The newly discovered tile, which Westhoven had not previously reported to the engineer,  had a seed bag stuffed into its outlet, which was near the filled catch basin.   The Rohrs claimed that the engineer's staff had intentionally stuffed the seed bag into the functioning tile, while the engineer's staff claimed they did not know about the tile.   The county surmised that the seed bag had been used in the previous filling of the tile and catch basin that they had believed to be non-functioning.

The Rohrs sought $70,000 for losses to their 2003 tomato crop as a result of the flooding.  Their legal causes of action included several tort claims and violations of federal and state due process rights.  They also asked the court for a writ of mandamus to order the county to compensate them for a partial "taking" of their property by the county engineer.   The Henry County Court of Common Pleas, after seven years of litigation, rejected each of the Rohrs' claims.

The Rohrs appealed with no avail to the Third District Court of Appeals.  The appellate court agreed with the trial court's conclusion that state law prevented tort liability for the flooding because the county was entitled to governmental immunity under Ohio Revised Code 2744.02(A)(1) i.  The court stated that the Rohrs had failed to prove that any of the law's exceptions to governmental immunity applied to the situation.  In response to the Rohrs' argument that the county had committed a partial "taking" of property, the appeals court agreed with the trial court that a "taking" had not occurred for three reasons:  because the flooding was accidental and incidental rather than an intentional taking of property, because the alleged taking was not for a public use as required by the Constitution and because the Rohrs had other remedies for their harm, such as a tort claim against Westhoven and the failed tort claims against the county engineer.  As such other remedies were available, the court also agreed with the trial court that the Rohrs failed to prove violations of their due process rights.

In their request for a review by the Ohio Supreme Court, the Rohrs focused on the lower courts' conclusions that a "taking" had not occurred.  The Henry County Farm Bureau and the Ohio Farm Bureau filed a brief in support of the Rohrs, urging the Supreme Court to accept the case and review the takings issue.  The Court today declined to accept the case by a vote of 5--2 with Justices Paul Pfeifer and Judith French dissenting.  Without a review by the Ohio Supreme Court, the appellate court decision stands as the final resolution of the case.

The decision of the Third District Court of Appeals in State ex rel. Rohrs v. Germann is available here.

Peggy Kirk Hall, Asst. Professor, OSU Extension Agricultural & Resource Law Program

The Ohio Senate concurred with the House of Representatives yesterday to enact changes to Ohio's Agricultural Commodity Handler's law, commonly known as the Grain Indemnity Fund.  According to the bill sponsors, the changes will better protect Ohio farmers from grain elevator insolvency by raising the fund cap from $10 to $15 million and increasing the minimum fund balance trigger for the per bushel fee assessment from $8 to $10 million.

The Ohio Legislature originally created the Grain Indemnity Fund in 1983 to reimburse farmers when a grain handler becomes insolvent.  The law requires licensing of all grain handlers, who pay a 1/2 cent per bushel fee on grain handled to maintain a minimum balance in the indemnity fund.    In the case of a grain handler's financial failure, a farmer is reimbursed 100% for open storage grain in the elevator and 100% of the first $10,000 of a loss  for future contracts, delayed price and basis transactions, with 80% reimbursement beyond the first $10,000 of loss.  The legislature raised the indemnity fund's required minimum balance to $10 million in 2005.

Ohio Department of Agriculture handles the fund, which paid out $4.1 million to farmers in grain insolvency cases in 2011 and its highest payout of $2.5 million for one elevator in 2004.   The fund currently is around $8.2 million, but bill sponsors believe that payouts similar to those of the past could nearly bankrupt the fund under today’s grain prices.  Changes to the fund cap and the assessment trigger should prevent depletion of the fund, according to bill sponsor Senator Cliff Hite.

The legislation also changes grain lien priority rules, revises licensing requirements for commodity handlers and increases discretion for the ODA Director to determine the validity of claims.  The following summarizes these and other provisions in the legislation:

  • Increases the Grain Indemnity Fund's minimum balance from $8 to $10 million and its maximum balance from $10 to $15 million.  ODA cannot assess the per bushel assessment on handlers outside of the minimum and maximum balances.
  • Gives priority to the automatic lien established and held by ODA in the event of a commodity handler’s failure or insolvency.  The lien will now have priority over all competing lien claims asserted against the commodity.
  • Requires a commodity handler whose license is revoked to immediately notify all parties storing agricultural commodities in the handler's warehouse and all holders of receipts issued by the handler.
  • Directs the ODA Director to determine the validity of claims against the fund with the recommendation of the Commodity Advisory Commission rather than the approval of the Commission.
  • Revises the type of financial statements that must be submitted to the Director by an applicant for an agricultural commodity handler's license or renewal.  The financial statements must consist of all financial statements and footnotes required by generally accepted accounting principles as promulgated by the Financial Accounting Standards Board together with an independent accountant's report on the statements.
  • Establishes the total net worth requirements for a handler's license applicant as 15 cents per bushel handled in the previous year and raises the minimum net worth requirement to $50,000.
  • Removes barley, oats, rye, grain sorghum, sunflower and speltz from the list of agricultural commodities addressed by the law.

Revisions to the law will be effective on October 11, 2013.    View the agricultural commodity handler's legislation here.

Catharine Daniels, Attorney, OSUE Agricultural & Resource Law Program

The court's decision was not exactly what a group of farmers, seed sellers, and agricultural organizations was hoping for, but they are nevertheless claiming partial victory against Monsanto in a recent lawsuit centered on genetically modified seed.  On June 10, 2013, the United States Court of Appeals denied the group's request for a judgment against Monsanto but at the same time declared that Monsanto would be judicially bound to its promise not to pursue future patent infringement suits against the growers, seed sellers or organizations for "inadvertently using or selling 'trace amounts' of genetically modified seeds."

Case History

Several farmers and organizations who grow, use, or sell conventional and organic seeds ("Seed Growers")  filed a federal lawsuit against Monsanto in March of 2011.  Ohioans in the group include the Ohio Ecological Food and Farm Association.  The Seed Growers asked the court to declare some of Monsanto’s patents “invalid, unenforceable, and not infringed.”  The Seed Growers claimed they had to forgo planting certain crops and had to take “costly precautions” to avoid contamination by Monsanto's genetically modified "Roundup Ready" seeds.  Pointing to Monsanto's history of aggressive patent infringement litigation, the Seed Growers feared they would be sued by Monsanto despite their efforts to prevent unintended contamination.  The Seed Growers also alleged adverse health effects and long term environmental impacts from the genetically modified seed.   The federal court dismissed the case after determining that no traceable injury existed that the court could address, since none of the Seed  Growers had actually been sued by Monsanto.

The Appeal

The Seed Growers appealed the decision to the Court of Appeals for the Federal Circuit.  The court of appeals agreed that there was not a current traceable injury to the Seed Growers.  But the appeals court also concluded that there was no risk of harm to the Seed Growers because Monsanto had “unequivocally disclaimed any intent to sue appellant growers, seed sellers, or organizations for inadvertently using or selling “trace amounts” of genetically modified seeds.”   Even though Monsanto had denied the Seed Growers' request to enter into a written covenant not to sue, the appeals court held that Monsanto's promise to the Seed Growers throughout the lawsuit had the same effect as a written, signed agreement not to bring suit.

How Can the Court Enforce Monsanto's  “Promises”?

Monsanto's promise not to sue the Seed Growers came through verbal representations made in the course of the federal court proceedings.  How can the court hold Monsanto to such a promise?  To do so, the appeals court relied on the unique legal doctrine of "judicial estoppel," which states that under certain circumstances, a party who makes a declaration in a legal proceeding will be bound to that statement and may not contradict the declaration in a future legal proceeding.   The appeals court examined three factors that warrant a court's use of judicial estoppel:

  1. The party’s later position is clearly inconsistent with its prior position.
  2. The party successfully persuaded a court to accept its prior position.
  3. The party would derive an unfair advantage or impose an unfair detriment on the opposing party if the court didn't step in to enforce the promise.

According to the court, all three of these situations would exist if Monsanto later sued the parties for patent infringement, which requires the  application of judicial estoppel to bind Monsanto to its promise.

But the Promise is Limited

Monsanto's promise was not to sue "inadvertent users or sellers of seeds that are inadvertently contaminated with up to one percent of seeds carrying Monsanto's patented traits."  But what about growers who inadvertently use or sell seed containing greater than trace amounts; i.e. greater than one percent?  Despite the appeals court's effort to clarify whether or not Monsanto would assert its patent rights in those situations, Monsanto would not state its position on the issue.  Monsanto did make it clear that their view of an inadvertent infringement is quite narrow, stating that an "inadvertent infringer" would not include “those growers whose crops become accidentally contaminated, and who do not treat their fields with Roundup, but who, knowing of the contamination, harvest and replant or sell the seeds.”  Thus in situations where growers inadvertently use or sell seed containing greater than trace amounts of Monsanto's seed, it is possible that Monsanto could  bypass judicial estoppel and pursue a patent infringement case.

So Was this Really a Victory for the Organic Seed Growers?

While the Seed Growers did not obtain the declaratory judgments they sought against Monsanto, they did receive some protection from future litigation in the form of judicial estoppel.  Because the appeals court concluded that the Seed Growers were not at risk of being sued by Monsanto, the court was able to avoid delving into the deeper issues of whether or not Monsanto's patents are valid, whether avoiding contamination is a burden to conventional farmers and whether Monsanto's seed poses health and environmental harms.   The Seed Growers have expressed interest in requesting a review of the decision by the U.S. Supreme Court.  Even if the case does not make its way to the Supreme Court, it surely isn't the last lawsuit we'll see that challenges genetically modified seed technology.

View Organic Seed Growers et al v. Monsanto here.

Court rules that farmer's replanting of Roundup Ready beans violates federal patent law

Peggy Kirk Hall, Asst. Professor, OSU Extension Agricultural & Resource Law Program

The U.S. Supreme Court today ruled that a farmer's replanting of harvested Roundup Ready© soybeans violates Monsanto Company's patent rights.  The ruling leaves in place a former court award of $84,456 against farmer Vernon Bowman for planting and harvesting the soybeans, which he had purchased as commodity beans from a local grain elevator or saved from his prior harvests.

Relying on the theory of "patent exhaustion," Bowman argued that Monsanto's patent rights exhausted after the first sale of the seed and did not apply to later uses or sales.  This exception to patent protection allows a purchaser of a patented good to resell the "used" good without violating patent rights.   The Court unanimously disagreed that patent exhaustion was applicable in Bowman's case, explaining that the patent exhaustion theory applies to later uses of a good but not to the creation of new and additional goods from a patented good.  While Bowman could sell harvested Roundup Ready beans or use them as feed, he could not plant those beans, produce new beans and sell the new beans without violating Monsanto's patent rights.  "That is how "to ‘make’ a new product," said the Court, or to "reproduce Monsanto’s patented invention" without compensation to Monsanto.   "A patentee retains an undiminished right to prohibit others from making the thing his patent protects," said the Court.

Bowman tried to distinguish the application of patent exhaustion to his case based on the "self-replicating" nature of seed, arguing that the seed, rather than Bowman, controlled the seed's actual reproduction.  Monsanto should not be allowed to interfere with natural reproduction, claimed Bowman.  The Court again disagreed, rejecting what it referred to as Bowman's "blame the bean" and "seeds are special" arguments and pointing out that Bowman played an active role in the seed reproduction process.  But the Court carefully noted that its ruling does not automatically apply to every  self-replicating product, as there could be situations where a self-replication might occur outside a purchaser’s control or be a necessary but incidental step in using the item for another purpose.

Many expected the Court to rule in favor of Monsanto based solely on the argument that ruling otherwise would negate the incentive for innovation that Congress intended upon passing the federal Patent Act.  The Court was mindful of this argument when clarifying the parameters of the patent exhaustion doctrine, referring several times to the importance of not depriving Monsanto of its monopoly and the rewards of innovation.

What does the case mean for farmers?  The Monsanto ruling is not a big surprise but it does send a strong message to farmers, some of whom have likely grumbled over seed patents and limitations on the age-old practice of saving seed.  With the Supreme Court's decision, it's clear that the current legal system simply won't tolerate replantings of patented seeds.  Instead, the law will support continued efforts by patent holders to monitor what farmers do with patented seed.  Replanting of patented seed, whether intentional or accidental, is more than ever a high risk activity.

Read the Supreme Court's decision in Bowman v. Monsanto Co. here.

Peggy Kirk Hall, Asst. Professor, OSU Extension Agricultural & Resource Law

It’s the time of year when farmers clear fields and fence rows of corn stalks, branches and other debris and use a common management practice--piling the debris and burning it in the field.  Because outdoor fires such as this create air emissions and wildfire concerns, Ohio has laws that regulate open burning activities.   Burning certain materials at certain times in certain places may violate the open burning laws and cause a health or safety issue.  It’s important to know when open burning of crop debris and field residue is permissible, and to take precautions to minimize risk and liability.

There are several areas of law in Ohio that address open burning.  The Ohio Environmental Protection Agency (OEPA) oversees regulations on the open burning of materials that may produce harmful air emissions that affect human and environmental health.  Ohio also has laws that regulate open burning to minimize the danger of wildfires; these laws may be enforced by the Ohio Department of Natural Resources (ODNR) Division of Forestry or local law officials.   Additionally, a local government might have local ordinances that regulate open burning.

In regards to crop debris in farm fields, it is typically permissible for a farmer to burn the debris.  However, the law creates duties to conduct the burn responsibly and imposes some conditions on what, where and when to burn.  Violating the laws can lead to criminal charges, fines and civil liability to harmed parties.

What can you burn?

Ohio law allows the burning of “agricultural wastes” under certain conditions.  The definition of agricultural waste includes materials such as crop debris, as well as other materials.   According to Ohio law, agricultural waste includes:

  • Waste material generated by crop, horticultural, or livestock production practices, landscape wastes that are generated in agricultural activities and woody debris and plant matter from stream flooding.
  • Bags, cartons, structural materials and containers for pesticides, insecticides, fungicides, rodenticides, miticides, nematocides, fumigants, herbicides, seed disinfectants and defoliants, if the manufacturer has identified open burning as a safe disposal procedure.  Farmers may add seed bags and cartons to the burn pile as long as the label states that open burning of the materials is safe.

Agricultural waste does not include:

  • Standing or fallen buildings, building materials, food waste, dead animals, materials made from petroleum or containing plastic, rubber, grease or asphalt.   A farmer may not add these materials to the burn pile.
  • Debris resulting from the clearing of land for new agricultural, residential, commercial or industrial development—this type of waste is defined as “land clearing waste.”  Open burning of land clearing waste requires prior written notification to Ohio EPA.

Where can you burn?

Several regulations determine acceptable locations for burning crop debris and other agricultural waste:

  • Agricultural waste may only be burned on the property where the waste is generated; the waste may not be taken to a different property for burning and a farmer cannot receive and burn waste from another property.
  • If the burning is inside a “restricted area,” then prior written notice to Ohio EPA must be provided at least ten days in advance of the burning.  A “restricted area” is an area where there is higher population density.  The law defines a restricted area as:
    • Any area inside city or village limits.
    • Any area within the 1,000-foot zone outside of a city or village with a population of 1,000 to 10,000.
    • Any area within a one-mile zone outside of a city or village with a population of more than 10,000.
    • The fire must occur in a location where it will not obscure visibility for roadways, railroad tracks or air fields.
    • The fire must be more than 1,000 feet from any neighboring building inhabited by people, such as homes, stores, restaurants, schools, etc.

When can you burn?

There are definite times when burning of crop debris and other agricultural waste is not permitted unless certain conditions are met.

  • Ohio’s wildfire laws limit open burning in rural areas during the months of March, April, May, October and November, when wildfire risk is highest due to dry vegetative conditions and dry winds.  During these months, open burning in rural areas is completely prohibited between the hours of 6 a.m. and 6 p.m., when volunteer fire departments are not well-staffed.  An exception to this prohibition applies to farmers under the following conditions:
    • Open burning may occur in a plowed field or garden, if the burn pile is at least 200 feet from any woodland, brush land or field containing dry grass or other flammable material.  If a farmer can’t meet this 200 foot buffer zone requirement, the farmer should wait until after 6 p.m. to conduct the burn.
    • Open burning should only occur when atmospheric conditions will readily dissipate any smoke and potential contaminants.  If weather conditions are foggy, rainy or causing air inversions, smoke and contaminants will not readily disperse and the farmer should not burn the materials.
    • Even if all other legal requirements for open burning are met, open burning is not allowed when air pollution warnings, alerts or emergencies are in effect.

What about prescribed burning?

Both the ODNR and Ohio EPA have authority over prescribed burning—intentional burns for horticultural, silvicultural, range or wildlife management practices.  Prescribed burning requires prior written permission from Ohio EPA and--if taking place during March, April, May, October or November--the burn must be conducted by a Certified Prescribed Fire Manager with permission by the Chief of ODNR’s Division of Forestry.  See the Division of Forestry’s website for more information on becoming a Certified Prescribed Fire Manager and requesting permission for prescribed burns.

Prior notice to Ohio EPA

For burns that require advance notice to the Ohio EPA, farmers may use the notification form on the Ohio EPA website at http://www.epa.ohio.gov/dapc/general/openburning.  The form seeks information about what will be burned and when and where the burn will take place; this allows the EPA to ensure that the burn is permissible.

Legal duties for conducting open burning

Ohio law also imposes duties for managing open burns.   Ohio Revised Code 1503.18 establishes a duty to prevent fire escape.   The law requires any person who starts a fire near trees, woodland or brush land to take steps to prevent the fire from escaping.  All leaves, grass, wood and inflammable material surrounding the place must be removed to a safe distance and all other reasonable precautions must be taken to keep the fire under control.   The law also states that a person should extinguish or safely cover an open fire before leaving the area.

Ohio EPA’s regulations impose several other duties for managing burns.  As mentioned above, burning of agricultural waste should take place at least 1,000 feet from any neighbor’s inhabited buildings. The wastes should be stacked and dried to provide the best practicable condition for efficient burning and weather conditions should not prevent dispersion of the smoke and emissions.  If the size of an agricultural waste pile exceeds 20 feet in diameter by 10 feet in height (or 4,000 cubic feet),  the farmer must provide written notification of the burn to the Ohio EPA at least ten days before burning.

Local laws

The above analysis explains Ohio’s laws on open burning; remember that the local government might have a local law that also regulates burning activities.  Check with your local fire department to know whether any local regulations apply to the situation.

What if a farmer violates open burning laws?

Violation of the open burning laws creates several risks for farmers.  Ohio EPA has the authority to issue fines of up to $1,000 per day per offense.  The EPA states that it takes enforcement action against repeat offenders or violations that cause significant harmful emissions.  Otherwise, EPA enforcement officers prefer to issue warnings to first-time offenders and educate on how to conduct open burns that minimize pollution impacts.  EPA enforcement officers regularly patrol their districts, investigate fires they see and investigate complaints from neighbors or others who report burning activities.  According to the EPA, the most common violations by farmers include burning substances that are not “agricultural wastes” such as tires and plastics, failing to meet the 1,000 foot setback requirement and burning waste from another property.

Conducting open burns that violate Ohio’s wildfire prevention laws can result in third degree misdemeanor charges, which carry penalties of up to $500 and 60 days of jail time per violation.   Any person may report a potential illegal burn that creates wildfire risks to the local law enforcement or Division of Forestry.

Equally and perhaps more important is the risk of civil liability from an open burning incident.  We all know that the “burn police” can’t observe everyone all the time, but civil liability doesn’t require intensive monitoring—it requires harm.  Where an open burn causes harm to people or property, civil liability may arise.  An open burn that reduces roadway visibility and results in an auto accident, escapes the property and harms neighbors or neighboring property or significantly interferes with other owners’ property use could result in a negligence or nuisance lawsuit.  The farmer who violated open burning laws or failed to properly manage the fire could be liable for all harm resulting from the fire.

For more information on Ohio’s open burning laws, visit the websites of the Ohio EPA Division of Air Pollution Control and ODNR Division of Forestry.

Peggy Kirk Hall, Asst. Professor, OSU Extension Agricultural & Resource Law Program

A written lease is a valuable tool to use in a farm lease situation, but many farm lease arrangements never progress beyond a conversation and a handshake.    A written lease brings certainty to the farming arrangement by laying out important terms such as lease duration, notice of termination, payment provisions and conservation practices. Verbal farm leases are risky; problems can arise with legal enforceability and disputes over rights and obligations.  For those dealing with a verbal lease agreement, here are a few strategies for protecting interests in the verbal farm lease situation.

Put the verbal lease in writing.  The first recommendation is no surprise; attorneys have long encouraged farmers to use written farmland leases rather than relying on verbal agreements.  But many landowners and tenants are uncomfortable using a written lease, for a variety of reasons.  Consider the following concerns and recommendations for addressing them:

  • “We’ve always operated on a verbal agreement and a handshake.”  Transitioning from a long-time verbal agreement to a written lease can be awkward and uncomfortable, and the landowner or tenant farmer who wishes to make the change may be uncertain about how to introduce the change.  To address an awkward transition, consider using a third party to “intervene” and facilitate the process of converting to a written agreement.  Have a farm manager, attorney or accountant explain the reasons for moving to a written agreement and begin the process of discussing lease terms.  Provide the other party with ample time to respond and to consider its own concerns and suggested lease terms.
  • “We don’t want everyone to know the terms of our lease.”  Landowners and tenants often express concern that a written farm lease must be recorded in the county recorder’s office, thus revealing private terms such as the price paid for the lease.  In this case, the parties may utilize a provision under Ohio law referred to as the “memorandum of lease.”  Ohio Revised Code section 5301.251 allows the parties to record a shortened form of the farmland lease.  The only provisions the parties must include in a recorded memorandum of lease are the names and addresses of the landowner and tenant, the date of executing the agreement, a description of the leased property, the starting date and duration of the lease and any rights of renewal or extension.   With the recorded memorandum of lease, there is public notice that the lease exists but key terms remain confidential between the landowner and tenant.  The parties can include a term in the written lease verifying their agreement to execute and record a memorandum of lease rather than recording the entire lease.
  • “A written lease is overwhelming or too much detail.”  It is true that farmland leases can be lengthy and detailed, although attorneys usually have sound reasons for drafting detailed leases.   Note that the parties can make a gradual transition.  Even a simple lease or a checklist can bring certainty to the relationship by outlining key obligations or providing resolutions if problems arise in the future.  Additionally, there are many good resources that simplify and explain farm lease provisions, and a few good “model” leases for reference.  For helpful resources, visit the website http://aglease101.org .

Pay attention to lease payments and possession.  If the parties can’t convert a verbal lease to a written lease, be aware that one problem with a verbal lease is that it’s not clear when the lease agreement actually begins.  In the event of a dispute, Ohio courts often look to factors such as possession and lease payments to determine the term of the lease.  Two indicators that a farm lease agreement is in place are possession of the property by the tenant coupled with acquiescence by the landowner, or a lease payment made by the tenant and accepted by the landowner.  Both parties should be mindful of these important actions and should maintain records to document these occurrences.

Address financial fairness.  Determining the payment amount for a farm lease is a challenging task, particularly when the farm economy is in flux.  Disagreement over the lease price can quickly end a verbal farm lease relationship.   Thorough research and equitable approaches can maintain the lease relationship by ensuring a financial arrangement that is responsive to the market and fair to both parties.   OSU’s Farm Management website at http://aede.osu.edu/programs-and-research/osu-farm-management contains data on farmland values and cash rental rates.  Consider a flexible cash lease to accommodate economic changes; information on flexible cash leases is also available through OSU’s Farm Management website and at http://www.aglease101.org.

Maintain records of the lease relationship.  Good records that document the leasing history can help establish a “course of dealing” between the parties.  While a written farm lease is preferable, a record of how the parties managed the lease or handled issues in the past can be a useful point of reference for ensuring consistency in the relationship.  If there is litigation over the lease, a court might rely on proof of the parties’ course of dealing to help resolve an issue.  Both parties should maintain thorough records of payments, agreements, farm management practices, soil sampling, nutrient applications, improvements and any other facts or data that establish the details of the leasing relationship.

Maintain communication.   Don’t underestimate the power of good communication between the leasing parties.  A landowner can provide a tenant with valuable certainty by keeping the tenant informed on potential changes with land ownership or financial management.  Tenants can keep a landowner apprised of the condition of the farm property by providing reports on a regular basis, especially in the case of an absentee landowner or a crop share lease.  A report that includes pictures and a brief summary of improvements made,  management practices adopted or crop share calculations may go a long way toward ensuring a solid leasing relationship.

A written and comprehensive farm lease is a valuable tool for farmland owners and tenant farmers alike; those who still rely on verbal farm leases should carefully consider making a transition to a written lease.  Parties that continue to use a verbal farm lease face legal and financial risks, but can adopt some practices to help protect the verbal farm lease situation.  For resources and examples of written farm leases, see http://aglease101.org.

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