Crop Issues

With many farmers in Ohio unable to plant before the Final Planting Date for crop insurance, questions are arising about planting and harvesting cover crops on those prevented planting acres.  USDA Risk Management Agency (RMA) rules allow operators to plant cover crops on prevented planting acres and to hay, graze, or cut the cover crops for silage after the posted “harvest date.”  In previous years, the harvest date for cover crops was November 1.   If an operator harvested the cover crop before that date, the prevented plant payment would be reduced from 100% to 35%. 

The RMA has changed the harvest date for 2019, however.  In response to reduced livestock feed supplies that will result from the loss of planted acres this year, the RMA has moved up the cover crop harvest date to September 1.  An operator who plants a cover crop after the Final Planting Date and then cuts the crop for forage on or after September 1 can still receive 100% of the prevented plant payment, even if the operator sells the forage and regardless of whether the operator planted the cover crop during or after the Late Planting Period.  The Final Planting Date in Ohio was June 5 for corn and June 20 for soybeans; the Late Planting Period ended on June 20 for corn and runs until July 15 for soybeans.  Note, too, that a cover crop that was in the ground before the Final Planting Date but was not terminated because the operator couldn’t plant the intended corn or soybean crop can also be harvested for forage on or after September 1.

The RMA’s chart below illustrates payment scenarios for cover crops planted and harvested on prevented planting acres.

Other requirements for cover crops

While the cover crop harvest date seems pretty straightforward, don’t be fooled--crop insurance provisions can be tricky.  Farmers planning to put out cover crops on prevented plant acres should work closely with their crop insurance agents to ensure that all policy provisions and documentation requirements are met. 

An initial requirement is that the cover crop planted must meet the definition of an “acceptable cover crop” for crop insurance purposes.   The RMA considers an acceptable cover crop as one that is recognized by agricultural experts as agronomically sound for the area for erosion control or other purposes related to conservation or soil improvement and planted at the recommended seeding rate.  OSU agricultural experts can help provide guidance on acceptable cover crops.   

Operators should also be aware that many seed licenses, particularly for bio-engineered seeds, restrict the use of the seed to grain production only.  In those situations, planting the seed for a cover crop or harvesting it for silage would violate the seed licensing contract and create a liability situation for the operator.

Additionally, note that crop insurance provisions prohibit harvesting the cover crop for grain or seed, and an operator who does so will lose all of the prevented plant payment.  The cover crop harvest can also impact other provisions, such as the farm’s Actual Production History (APH) yields.  These and other provisions highlight the importance of a close working arrangement with the crop insurance agent in order to comply with RMA’s cover crop provisions.

For RMA’s guidance on Prevented Planting Flooding, go to this page.  The site contains a comprehensive list of questions and answers on prevented planting, along with information about the 2019 cover crop provisions.   

The Ohio Specialty Crop Registry connects producers of specialty crops, beekeepers, and pesticide applicators to one another through free online registries.  Producers of specialty crops and beekeepers may voluntarily report the boundaries of their specialty crops and beehives.  The registry then compiles this information in a mapping tool that also provides the contact information of the registrant.  In doing so, pesticide applicators are better able to avoid these areas and minimize spray drift.

The Old System: the Ohio Sensitive Crop Registry

The Ohio Department of Agriculture (ODA) first launched a registry for sensitive crops in 2014 so that pesticide applicators could know the locations of sensitive crops before spraying in a given area.  The registry came about at a time when widespread demand for organic foods required more farmers to closely monitor what came into contact with their crops.  The original tool allowed commercial producers of at least a half-acre of a single type of sensitive crop to register.  Sensitive crops included just about any non-row crop such as fruits, vegetables, and herbs.  Apiaries, outdoor aquaculture, brambles, certified organic farms, nurseries, greenhouses, and orchards also could be registered.

The New System: the Ohio Specialty Crop Registry

Now, ODA partners with FieldWatch, Inc. to operate the Ohio Specialty Crop Registry.  FieldWatch, Inc. is a non-profit organization that operates three registries: DriftWatch for producers of specialty crops, BeeCheck for beekeepers, and CropCheck for producers of row crops.  FieldWatch creates maps based on the information from these registries, and makes those maps available to pesticide applicators in another program called FieldCheck.  In summary, the three registries are for the producers and beekeepers, and FieldCheck is for the pesticide applicators.

Ohio currently only uses the DriftWatch and BeeCheck registries.  According to ODA, the list of sensitive crops under the old program is virtually the same under the new system, meaning that producers of any non-row crop may utilize DriftWatch.  While beekeepers may report the location of their beehives in DriftWatch, ODA recommends that beekeepers with no specialty crops use BeeCheck.

FieldWatch, Inc. continues to update its tools to add features and indicators, and CropCheck represents one such development.  New for 2019, this registry allows producers of row crops like corn, soybeans, and wheat to register their crops.  Its development comes on the heels of the introduction of dicamba-tolerant seeds.  Only Arkansas, North Carolina, Illinois, and Indiana have adopted CropCheck for 2019.  Ohio has not yet adopted it.

Connecting the Dots between the Registry and Liability

At this point you may be asking yourself, why is this in the ag law blog?  That’s a fair question, and the answer is simple: risk management.  As more farmers adopt organic practices, as pesticides and seeds change, and as weather patterns evolve, the risk increases that pesticide drift may come into contact with and negatively impact specialty crops and beehives.

The law expects people to act reasonably and to exercise due care at all times, and this default duty applies to pesticide applicators.  Common claims for drift include negligence, nuisance, and trespass.  Each of these claims examine whether the parties acted reasonably and with due care.  Most often, when a court decides that a pesticide applicator acted unreasonably, it is because he or she failed to apply the pesticide in a manner consistent with the label.  Following the label is certainly an expectation, but it is not the only thing a court will consider. 

When a pesticide applicator does not use FieldCheck, a perceptive attorney representing beekeepers and producers of specialty crops would likely argue that the use of FieldCheck is an industry standard.  If an attorney could establish this, then the failure to use FieldCheck would mean that a pesticide applicator failed to act in a reasonable manner and exercise due care.  While we have not seen an Ohio court consider this issue yet, as use of the program continues to grow, this argument will come to hold more weight when a case does arise.

When a pesticide applicator does use FieldCheck, he or she has a stronger argument that he or she acted in a reasonable manner.  FieldCheck provides pesticide applicators with a way to know exactly where registered sensitive crops and beehives are located, and allows the applicator to buffer accordingly.  FieldCheck provides a quick, cheap, and easy way to manage legal risk, alongside following the label.  Applicators who use the program may want to document when they used the program and also how the maps impacted their application plan.

These scenarios presume that the beekeeper or producer of specialty crops has registered the locations of their bees or crop with a FieldWatch registry.  When sued by a beekeeper or producer of specialty crops who did not register their locations, a pesticide applicator could use similar arguments as noted above in order to defend against the lawsuit.  However, the applicator’s focus would likely regard the lack of notice.  Again, these arguments alone would not likely determine the outcome of the case, but they would help the court determine whether the parties acted reasonably.

What about hemp?

Another question that some of our readers will also be asking is: which registry is for hemp?  We made a call and left a message with FieldWatch.  If or when hemp production becomes legal in Ohio, we’ll be sure to provide an update on which registry is proper for hemp.  Ohio’s hemp bill is on the move, and the Ohio Senate Agriculture & Natural Resources Committee completed its third hearing of the bill this week.  However, we can’t forget that growing hemp is not legal in Ohio unless and until the bill is passed into law and the regulatory system is created.

Hemp is one of the most talked-about provisions of the new Farm Bill passed earlier this month by Congress and signed by the President on December 20.   There’s a lot of excitement about the removal of federal restrictions on hemp production and the economic opportunities for growing hemp.  But what exactly does the Farm Bill say about hemp?  Can Ohioans now grow, use and sell hemp and hemp products?  We dove into the 807 pages of the Farm Bill Conference Report (available here for your reading pleasure) to find answers to your questions about the new legal status of hemp and hemp cultivation.

What is hemp?

Before we go much further in this discussion, it’s important to understand that both hemp and marijuana are species of cannabis, but they have different properties.  Of particular note is the fact that marijuana contains much more tetrahydrocannabinol (THC) than hemp.  THC is the part of a cannabis plant that can cause a psychoactive effect in certain concentrations, but hemp plants generally do not contain enough THC to produce a “high.”  Hemp has many uses— it can be used for construction materials, fabrics and clothing, and animal bedding.  It has even been discussed as a potential cover crop.  Cannabidiol, or CBD, is a very popular extract of the hemp plant that is alleged to help those with anxiety, pain, inflammation, and other ailments, but not much research has been done to verify its effectiveness for medical use.  Note that CBD is also an extract of the higher THC marijuana plant.

Hemp is removed from the federal list of controlled substances—but only if it meets certain requirements

First and foremost, the Farm Bill removes hemp from the federal list of controlled substances.  Section 12619 of the bill removes hemp from the definition of marijuana, which is still an illegal drug under federal law.  In the same section, the bill federally decriminalizes tetrahydrocannabinols (THC) in hemp.  Not all hemp, however, is subject to this exemption.  Only hemp and THC as defined in the Farm Bill and as grown under the conditions set forth in the Farm Bill are accorded the exemption.

So, how does the Farm Bill change the definition of hemp?  The main hemp provision of the bill, Section 10113, separates hemp from the definition of marijuana and redefines hemp as “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.”

Coming soon: state and federal hemp production plans

The new law doesn’t allow a producer to start growing hemp today.  Instead, Section 10113 of the Farm Bill describes the two situations under which a producer will be able to engage in legal hemp production in the future.  In the first situation, the States or Indian tribes may take charge of the regulation of hemp production within their boundaries.  To do this, a State must first submit a plan to the USDA through their state department of agriculture.  A State plan must include: 

1. A way to keep track of land where hemp is produced within the state;
2. Methods the state will use to test how much THC is in hemp plants;  
3. A way to dispose of plants or products that have a higher THC concentration than is legally allowed;
4. A procedure for inspecting hemp producers;
5. A plan for enforcing the law;
6. A system for dissemination of a hemp producer’s information to the USDA; and
7. Assurances that the state has the resources to carry out the plan. 

A producer who wants to cultivate hemp in a State that has an approved hemp production plan must first comply with the State’s plan before beginning to grow hemp.   Predictions are that it may take a State about a year to create its hemp production plan and obtain the required USDA approval for the plan.

The second situation for growing hemp comes into play if a State or Tribe does not submit a hemp plan to USDA.  In this case, as long as the State has not limited the regulation or production of hemp under state law, the Secretary of Agriculture for the USDA may establish a plan “to monitor and regulate” hemp production within that State.  A plan established by the USDA must meet the same criteria as a plan written by a State, and the law also requires the USDA to establish a licensing procedure for producers.   Thus, a producer in a State that doesn’t have a hemp plan could legally grow hemp by obtaining a USDA hemp license through the hemp regulations that the USDA will develop, unless the State has prohibited hemp cultivation.  Section 10113 specifically states that it does not preempt or limit any state law that “regulates the production of hemp” as well as any state law that is “more stringent” than federal law in regulating hemp production.  Thus, a State can outlaw hemp production within its boundaries or include additional restrictions and requirements in its State plan as long as the plan complies with the federal law requirements.  

Handling producer violations

What if a hemp producer doesn’t comply with the new law or with the State or USDA hemp production plan?  Section 10113 also describes how violations of the law will be handled.  If a hemp producer negligently violates a State or USDA hemp production plan, the producer could be subject to enforcement.  One negligent violation of the plan would not trigger criminal punishment, but the violator would have to comply with a corrective action plan prescribed by the State or USDA.  However, if a producer negligently violates a plan three times in five years, the producer will be banned from producing hemp for five years. Examples of negligent violations in the law include: not providing a legal description of the land where hemp is produced, growing hemp without obtaining a license “or other required authorization” from the State, Tribe, or USDA, or producing hemp with a THC concentration higher than 0.3 percent. If a producer violates a State or USDA plan “with a culpable mental state greater than negligence” (that is, purposely, knowingly, or recklessly), then the State or USDA must report the violation to law enforcement authorities.  Furthermore, persons convicted of a felony relating to a controlled substance under state or federal law are generally barred from hemp production for ten years following the date of their conviction, with the exception of persons convicted of a controlled substances felony but lawfully participating in a pilot program under the 2014 Farm Bill.  Finally, if a person falsifies an application to participate in hemp production, that person will be totally barred from producing hemp. 

Legal hemp not to be prohibited in interstate commerce

The new law also allows for the interstate commerce of legally produced hemp and hemp products. Section 10114 says that a State or Indian Tribe cannot prevent the transportation or shipment of legally produced hemp through its state or territory.  While a State may ban the sale of hemp or hemp products solely within its borders, it must allow hemp products to move freely through the State.  For example, imagine that Pennsylvania allows hemp production but Ohio does not.  Producers of legal hemp in Pennsylvania could not sell the hemp within Ohio, but Ohio could not prohibit a truck, train, or other type of transport from carrying the hemp through Ohio to a destination outside of Ohio. 

Hemp becomes eligible for crop insurance

Importantly, the Farm Bill also addresses hemp production risk by amending the Federal Crop Insurance Act to include hemp.  Section 11119 adds hemp to the definition of “agricultural commodities” that can be insured and section 11106 adds legally produced hemp to the list of crops that can be insured even after harvested.  Other provisions in Title XI waive marketability requirements for researching hemp. 

Making way for hemp research funding

Several provisions in the Farm Bill ensure that it is legally permissible to fund hemp research.  Section 7129 amends the National Agricultural Research, Extension, and Teaching Policy Act to allow the Secretary of Agriculture to award grants for researching hemp and the development of hemp products.  In section 7501, the bill amends the Critical Agricultural Materials Act to allow research on hemp, meaning that Congress believes hemp has the “potential of producing critical materials for strategic and industrial purposes.” 

Finally, section 7605 amends the hemp pilot program language from the 2014 Farm Bill (for information on the pilot program, see our previous blog post).  The Secretary of Agriculture is tasked with conducting a study on the pilot program and submitting a report on the study to Congress within a year.  Section 7605 also repeals the hemp pilot programs, but only one year after final regulation on hemp production under section 10113 is published. 

How does current Ohio law treat hemp production?

Ohio law defines marijuana as “all parts of a plant of the genus cannabis…” in Ohio Revised Code section 3719.01.  Hemp is in the genus cannabis, as discussed earlier in this post.  Therefore, under current Ohio law, hemp is the same as marijuana.  Marijuana is a controlled substance under Ohio law, and the law states that “[n]o person shall knowingly obtain, possess, or use a controlled substance.” 

What about hemp-derived CBD oil?  Ohio enacted a medical marijuana law in 2016, although dispensaries in the state have yet to open (so far, only one dispensary in the state has been licensed).  In order to obtain medical marijuana in Ohio, it would have to be prescribed by a physician with which the patient has a “bona fide physician-client relationship,” and the patient would have to have a qualifying medical condition.  Medical marijuana can be prescribed and used in oil form under the law.  Since Ohio law lumps hemp in with marijuana, this means that in order to obtain CBD oil derived from hemp, a person would also have to follow the steps to obtain medical marijuana. Hemp-derived CBD oil also does not fall under any exceptions in Ohio’s definition of marijuana.  Ohio’s State Board of Pharmacy specifically stated in a guidance document that CBD oil can only be legally dispensed from a licensed dispensary.  In releasing this guidance, the Board of Pharmacy is purporting to act under the rulemaking authority granted under ORC 3796.04.

Note, however, that there are exceptions to Ohio’s definition of marijuana.  According to Ohio law, marijuana “does not include the mature stalks of the plant, fiber produced from the stalks, oils or cake made from the seeds of the plant, or any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks, except the resin extracted from the mature stalks, fiber, oil or cake, or the sterilized seed of the plant that is incapable of germination.”  Since hemp falls under the definition of marijuana, it is possible that some of these exceptions could also apply to certain hemp products made from stalks or seeds. Thus, it is plausible that some hemp products could be sold and used in Ohio.  The law also states, however, that no person (other than those licensed under the medical marijuana law) “shall knowingly cultivate” marijuana.  Again, since hemp is part of the state’s definition of marijuana, under the law, that means that nobody can “knowingly cultivate” hemp, either. 

In sum, it appears as though some excepted hemp products could be sold in Ohio, but not CBD oil, as it does not fall under the exception.  Even if some hemp products can be sold in Ohio, hemp itself cannot currently be cultivated in Ohio.  The new hemp language in the Farm Bill allows states to be more restrictive with hemp than the federal government, so Ohio can continue its ban on certain hemp products even with the new federal law.  The State cannot, however, stop the transportation of hemp across the State, as explained above.  Conversely, Ohio’s General Assembly could remove hemp from Ohio’s definition of marijuana and redefine hemp according to the Farm Bill’s new definition, which could allow for legal hemp cultivation under the Farm Bill.  For the time being, growing hemp in Ohio is not legal, but that is subject to change. 

Stay tuned to the Ag Law Blog for continuing updates on hemp laws!

Those post cards advising producers of a $1.51 billion settlement in the Syngenta corn seed lawsuits are legitimate, and corn producers seeking compensation from thesettlement must file claims by 11:59 p.m. on October 12, 2018.  The settlement is the result of class action and individual lawsuits alleging that Syngenta failed to receive import approval from China before selling its genetically modified Viptera and Duracade seeds in the United States, which led to the rejection of  U.S. corn shipments and a lowering of corn prices from 2013 to 2018.

Who can file a claim?

Three types of claimants that were involved in the U.S. corn market between September 15, 2013 and April 10, 2018 may file claims: 

• Corn producers, which includes any owner, operator, landlord or tenant who shared in the risk of producing any variety of corn, not just Syngenta varieties.  Landlords who operated under fixed cash leases are not eligible.
• Grain handling facilities that purchased, transported, stored, handled and sold any variety of corn. 
• Ethanol production facilities that produced, purchased and sold dried distillers' grains from any variety of corn.

How to file a claim?

File electronically through a secure, encrypted portal at www.CornSeedSettlement.com or download a printed form on the same website to file via U.S. mail.  Claimants must file using either a federal tax ID number or social security number and must file a separate claim for each Form 578 filed with FSA.  Note that the settlement claims administrator states that all claims information is confidential and will be destroyed after the payment of claims.

How much will a claimant receive?

Payments will vary and will depend upon the total number of filed claims.  For corn producers, the claims administrator will determine payments based on the following factors: (1) compensable recovery quantity as calculated by number of acres, ownership interest, NASS county yields and predetermined marketing year averages, (2) the year of planting, (3) the producer’s ownership interest, and (4) whether the producer purchased and planted Agrisure Viptera or Duracade seed or a different variety.

When will claimants receive payments?

A claimant might not receive a payment for about a year.  A court hearing to approve the settlement will take place in the U.S District Court in Kansas on November 15, 2018.  If the court approves the settlement, those who object to the approval can file appeals.  Final payments won't occur until the court resolves all appeals, which could take about a year or more.

Must claimants report payments as income?

Class action settlement payments that compensate for the loss of business income should be reported for tax purposes.  Claimants should consult with tax advisors to determine IRS reporting requirements.

For more information, an extensive list of frequently asked questions about the Syngenta corn seed settlement is available here.