Environmental
As it often goes with farming, the weather interfered a bit with Farm Science Review this year. We missed seeing farmers and students from across the state gather for the show on Wednesday. But even wind and rain didn’t stop our Farm Office team, above, from presenting Farm Office Live from the Review on Thursday. I gave an update on Ohio legislation, as Ohio’s legislature is back from its summer break. Here’s a summary of the legislation I discussed at our Farm Science Review program.
Bills passed and soon effective
S.B. 52 – Solar and wind facilities. S.B. 52 passed several months ago and will be effective on October 11, 2021. The new law will allow counties to designate “restricted areas” in a county where wind and solar projects may not locate and creates a county referendum process for a public vote on restricted area designation. The law will also require developers to hold a public meeting in the county where a facility is proposed at least 90 days before applying for project approval with the Ohio Power Siting Board. After the meeting, the county commissioner may choose to prohibit or limit the proposed project. Another provision of the new law appoints 2 local officials from the proposed location to serve on the OPSB board that reviews a project. And importantly for landowners, the new law requires a developer to submit a decommissioning plan to OPSB for approval with the application and to post and regularly update a performance bond for the amount of decommissioning costs. Watch for our new law bulletins on S.B. 52, which we’ll publish soon.
Bills on the move
H.B. 30 – Slow-moving vehicles. The bill passed the House on June 23, 2021, and just received its second hearing before the Senate Transportation on September 22, 2021. It proposes revisions to marking and lighting requirements for animal-drawn vehicles to make the vehicles more visible and reduce roadway accidents.
H.B. 95 – Beginning farmers. We’ve been hoping this bill aiding beginning farmers would continue to receive attention. It would allow individuals to be certified as beginning farmers and create income tax credits for owners who sell land and agricultural assets to certified beginning farmers and for beginning farmers who attend approved financial management programs. The bill passed the House on June 28, 2021 and was referred to the Senate Ways and Means Committee on September 8, 2021.
S.B. 47 – Overtime pay. The Senate passed S.B. 47 on September 22, soon after returning from break. It would exempt an employer from paying overtime wages for certain activities, including traveling to the workplace, actions before or after beginning principal work activities, or “de minimus” acts requiring insignificant time. The bill sponsors state that it will bring necessary clarity to overtime pay in the era of more employees working unsupervised from home.
Bills newly introduced
H.B. 397 – Termination of Agricultural Lease. A bill that aims to bring certainty to farmland leases was introduced in the House on August 24, 2021 and referred to the Agriculture and Conservation Committee. The proposal states that where a farm lease agreement does not provide for a termination date or a method for giving notice of termination, a landlord who wants to terminate that agreement must do so in writing by September 1. Unless otherwise agreed in writing, the termination date would be either the date harvest or removal of the crops is complete or December 31, whichever is earlier.
H.B. 385 – Municipal waste discharges to Lake Erie western basin Municipalities would be prohibited from discharging waste from treatment plants into Lake Erie under a new bill proposed by Rep. Jon Cross (R-Kenton). The bill would require the Ohio EPA to revoke all existing NPDES permits for municipal treatment works or sewerage systems to in the western basin and prohibit any additional permits for that purpose. It would also fine municipalities up to $250,000 per day for knowingly discharging waste into Lake Erie on the first offense and $1,000 per day for subsequent offenses, or to fine $100 million if the discharge amount exceeds 100 million gallons in a 12-month period. Introduced on August 6, 2021, the bill has been referred to the House Agriculture and Conservation Committee.
Catch a replay Farm Office Live from Farm Science Review at https://farmoffice.osu.edu/farmofficelive. Register at that site to join us for the next Farm Office Live on October 13 at 7 p.m. or a repeat on October 15 at 10 a.m., whern the Farm Office team will digest the latest news and information on agricultural law and farm management issues that affect Ohio’s farm offices.
Tags: Ohio legislation
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Did you know there is a sea creature capable of producing bubbles that are louder than a gun and hotter than lava? Pistol shrimp, also known as snapping shrimp, are the super-powered creatures under the sea that no one talks about. These bite-sized crustaceans have a special claw that allows them to form the deadly bubble to shoot at unsuspecting victims or enemies. The sound of the pop of the bubble has been measured at 218 decibels, which is louder than a speeding bullet, and the heat generated by the bubble has been measured to reach almost 8,000 degrees Fahrenheit, making the bubble four-times hotter than lava. Like the pistol shrimp, we have brought you the heat in this edition of the Ag Law Harvest.
This Ag Law Harvest brings you agricultural and resource issues from across the country that have created their own noise, including animal liability laws, the reversal of relaxed environmental regulations, and requiring federal agencies to consider the impact of future agency activities on the environment.
Farmers and ranchers begin to enjoy new protections under Texas animal liability laws. Texas House Bill 365, which expands protections under Texas’ Farm Animal Liability Act (“FALA”), went into effect on September 1, 2021. House Bill 365 was passed in response to a 2020 Texas Supreme Court ruling which found that farmers and ranchers were not protected under FALA and could be liable for injuries that occur on working farms and ranches. The new law prevents an injured individual from holding a farmer or rancher liable for their injuries, so long as the injuries are a result of the inherent risks of being involved in routine/customary activities on a farm or ranch.
Federal Court revokes Trump Navigable Waters Protection Rule. The U.S. District Court in Arizona recently ruled that the Trump Administration’s Navigable Waters Protection Rule (“NWPR”) must be vacated because the rule contains serious errors and the Trump Administration’s rule could do more harm than good to the nation’s waters if left alone. Opponents of the NWPR argued that rule disregards established science and the advice of the EPA’s own experts in order to redefine the phrase “waters of the United States.” Specifically, opponents to the Trump Administration’s rule voiced their concern that the NWPR failed to take into consideration the effect ephemeral waters would have on traditional navigable waters. And the Court agreed. The Court found that the NWPR must be vacated because the rule “could result in possible environmental harm.” The Court also reasoned that because the EPA is likely to alter the definition of “waters of the United States” under the Biden Administration, the NWPR should not remain in place. Proponents of the NWPR claim that the Court’s ruling creates uncertainty for farmers and ranchers across the country.
EPA revokes Minnesota attempts to relax feedlot regulations. Earlier this year, Minnesota passed a law that relaxed the requirements to obtain a “Feedlot General Permit.” The Feedlot General Permit is usually only for Minnesota’s largest feedlots, some 1,200 farms. The permits are required under federal clean water laws but enforced by the state. Prior to the law being passed, the Minnesota Pollution Control Agency required those farmers that applied manure during the first two weeks of October to implement one of four approved nitrogen management practices. However, Minnesota lawmakers wanted to relax those regulations by prohibiting regulatory authorities from requiring farmers to take new steps to limit nitrogen runoff during October. But, the EPA “vetoed” Minnesota’s relaxed regulations, which it can do when a state’s law conflicts with a federal law or regulation. The EPA sent a letter notifying Minnesota that the relaxed regulations would be inconsistent with the Clean Water Act (“CWA”) and would result in an improper modification to the Minnesota Pollution Control Agency’s authority to administer the National Pollutant Discharge Elimination System (“NPDES”), which administers the feedlot permits. Proponents of the new Minnesota law claimed that the existing permits were not flexible enough and that regulatory authorities focused on an arbitrary calendar date rather than focusing on natural conditions when limiting a farmer’s ability to spread manure. Opponents to Minnesota’s law argue that the EPA did the right thing by using “common sense improvements to prevent manure runoff.”
Department of Homeland Security found to have violated environmental regulations for its border-enforcement activity. The Center for Biological Diversity and U.S. Congressman Raul Grijalva (the “Plaintiffs”) filed suit in federal court claiming that the Department of Homeland Security and its agency, Customs and Border Protection, (the “Defendants”) violated the National Environmental Policy Act (“NEPA”) and the Endangered Species Act (“ESA”). Plaintiffs alleged that Defendants failed to update their programmatic environmental analysis for border-enforcement activity since 2001, as required by NEPA, and that Defendants failed to consult with the U.S. Fish and Wildlife Service (“FWS”) about the impacts of border-enforcement activity on threatened or endangered species, as required by the ESA. In its opinion, the U.S. District Court of Arizona ruled that the Defendants did violate NEPA but not the ESA. The Court found that NEPA has two primary goals: (1) require every federal agency to consider the environmental impact of the agency’s actions; and (2) require the federal agency to inform the public that it has considered the environmental impact. NEPA also requires a federal agency to supplement its environmental impact statement if there is ongoing action being taken by the federal agency. The Defendants claimed they did not violate NEPA because they conducted and provided site-specific or project-specific environmental assessments. However, the Court ruled that although the Defendants did conduct project-specific analysis, they are required to supplement their environmental impact statement for the activity/program, as a whole, unless they legally opt out of the supplementation, which Defendants did not do until 2019. Therefore, the Court found the Defendants did violate NEPA prior to 2019. The Court also ruled that the ESA does not require federal agencies to consult with the FWS on a broad and continuing basis. The Court felt that the Defendants had met any requirements under the ESA by meeting with the FWS for any site-specific or project-specific analysis. Although the Court found that Defendants had violated NEPA, the Court concluded that Plaintiffs had waited too long to bring the lawsuit and that no remedy was available to Plaintiffs for the previous procedural violations of NEPA.
USDA announces changes to CFAP 2. The USDA’s Farm Service Agency announced changes to the Coronavirus Food Assistance Program 2 (“CFAP 2”). As a result of the changes, contract poultry, egg, and livestock producers, and producers of “sales-based commodities” – mostly specialty crops – can modify existing or file new applications by October 12, 2021, using either 2018 or 2019 to measure lost revenue in 2020. The changes were published on August 27, 2021, and can be found here.
Tags: CFAP 2, endangered species act, National Environmental Policy Act, EPA, Feedlot Permits, WOTUS, Animal Liability
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Written by Zach Ishee, J.D. Candidate '23, University of Mississippi, Research Fellow, National Agricultural Law Center
Zach has been working with OSU's Agricultural and Resource Law Program thanks to our partnership with the National Agricultural Law Center.
A major piece of environmental legislation currently making waves is the Growing Climate Solutions Act (GCSA), S. 1251. The GCSA passed through the Senate with overwhelming bipartisan support, by a final tally of 92-8. The bill sponsored by Senator Mike Braun (R-IN) had 27 Democratic co-sponsors, 26 Republican co-sponsors, and one independent co-sponsor. Although it has been criticized by some for not doing enough, the final vote shows a willingness by this Senate to grapple with the issues surrounding the environment and the climate.
Purpose of the Growing Climate Solutions Act
The goal of the GCSA is to ease the burden on farmers, ranchers, and foresters entering the voluntary carbon markets through the creation of the Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Certification program. The program’s efforts will be focused on removing the technical barriers of entry into the marketplace. The program calls for certification of certain entities to improve accurate information flow to farmers, ranchers, and foresters.
Timeline and Advisory Council
The Agriculture Secretary will have eight months from the bill’s passage to create the Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Certification program. If the Secretary decides against the program, he must publish a detailed explanation of why he has decided against the program.
An advisory council will be established to help the USDA create protocols for calculating, sampling, accounting, verification and reporting methodologies. The advisory council will be comprised of United States Department of Agriculture (USDA) representatives, Environmental Protection Agency (EPA) representatives, and agriculture industry representatives, among other qualified participants. The council must have at least twelve members from the agriculture industry and at least six active farmers or ranchers. The council is also required to have at least four members from the forestry industry. Other groups of participants are capped between two and four members but include members from the scientific research community, members of the private sector who deal in voluntary credits, and experts/professionals in the verification field. In total, over half of those serving on the council will be farmers, ranchers, and private forest owners.
Certification
Once the protocols have been created, the USDA must provide information for how entities self-certify and instructions on how to assist the farmers, ranchers, and private forest owners. The bill will require the creation of a website exclusively dedicated to assisting the potential market participants on best practices.
The certification granted by the USDA will allow an approved entity to claim they are a “USDA-certified technical assistance provider or third-party verifier for voluntary environmental credit markets”. Other entities, not approved by the USDA, that claim this certification or something substantially similar are subject to a monetary fine of $1,000 and become ineligible to participate in the program for five years. The certified entities will be audited at least annually to ensure compliance with USDA guidelines.
Funding
The GCSA will receive $1 million in funding from 2022-20226 along with $4.1 million rescinded from the American Rescue Act of 2021. This relatively small amount of new funding is likely one of the reasons for such strong bipartisan support for this bill.
Public Reception
Although this bill is a welcome start to addressing climate issues through agriculture participants, a few large questions remain. The bill does nothing to address some of the main concerns that industry experts have, for example the bill does not directly mention farmer data. Of course, data is an extreme concern for the participants in voluntary credit markets because of how much data must be turned over prior to verification of their created credits. It seems the advisory council will certainly address this issue, among others, but this bill does not create certainty with respect to data. It will be extremely important to keep track of the recommendations made by the advisory council and the USDA’s final decision on best practices as they will set the standard for voluntary credit markets moving forward.
Multiple organizations have come out in opposition of this bill. Family Farm Action has criticized the GCSA for playing into the hands of the major agribusinesses, stating “Without strong, preemptive antitrust protections, a carbon credit program would pay these agribusinesses for their pollution, compounding the already-substantial challenges they pose to the food system and the planet.” Senator Jeff Merkley (D-Ore) has also vocalized his reasoning for being part of the minority voting against the bill saying, “I don’t believe that an offset system that subsidizes corporations’ continued pollution in front-line communities is the best strategy. Let’s set incentives that reduce pollution in both agriculture and front-line neighborhoods.” The opposition to this bill has almost completely been in the camp that the bill does not do enough, rather than outright opposition against the overarching theme of combating climate change.
On the other hand, support for the GCSA has been easy to find. Kameran Onley, the Director of North American Policy and Government Relations for The Nature Conservancy has come out in support for the bill stating, “American farmers know that sustainability and profitability go hand in hand. This bill will help farmers improve their operations, build new revenue streams, and implement climate-smart practices to safeguard our environment for the future.” American Farm Bureau Federation President Zippy Duvall thanked lawmakers for the bipartisanship and further said, “The Growing Climate Solutions Act acknowledges the potential of climate-smart farming while ensuring farmers would be respected as partners who can build on our strong foundation of environmental stewardship." The support for the bill has been focused on the Senate’s ability to work across the aisle to begin structuring a unified approach towards carbon credit markets.
What’s next?
Clearly the bill still awaits a vote in the House of Representatives to make it to the President’s desk to become law. Although no timeline exists for a house vote at this point, good reason exists to believe it could make its way through the House quickly. As of right now a companion bill exists in the house, H.R. 2820, which goes by the same name, Growing Climate Solutions Act. The companion bill is substantially the same as the Senate bill, calling for the same advisory council and certification process. The House bill is sponsored by Rep. Abigail Davis Spanberger (D-VA-7) and co-sponsored by 33 Democrats and 19 Republicans, which is only further proof of the bipartisanship seen in the climate arena. The latest action on the House version of the Growing Climate Solutions Act was its referral to the House Committee on Agriculture April 22nd of this year. The Senate bill was received and held at desk in the House as of June 24th of this year. Although the House Agriculture Committee has yet to schedule a markup if the legislation, the bipartisan Problem Solvers Caucus has endorsed the bill.
Did you know that the “wise old owl” saying is a myth? Generally speaking, owls are no wiser than other birds of prey. In fact, other bird species like crows and parrots have shown greater cognitive abilities than the owl. An owl’s anatomy also helps dispel the myth because most of the space on an owl’s head is occupied by their large eyes, leaving little room for a brain.
This week’s Ag Law Harvest brings you EPA bans, Ohio case law, USDA announcements, and federal case law which could make your head spin almost as far as an owl’s.
EPA banning use of chlorpyrifos on food crops. The EPA announced that it will stop the use of the pesticide chlorpyrifos on all food to better protect producers and consumers. In its final rule released on Wednesday, the EPA is revoking all “tolerances” for chlorpyrifos. Additionally, the EPA will issue a Notice of Intent to Cancel under the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”) to cancel all registered food uses of chlorpyrifos. Chlorpyrifos is an insecticide used for a variety of agricultural uses, including soybeans, fruit and nut trees, broccoli, cauliflower, and other row crops, in addition to non-food uses. The EPA’s announcement comes in response to the Ninth Circuit’s order directing the EPA to issue a final rule in response to a petition filed by opponents to the use of chlorpyrifos. The petition requested that the EPA revoke all chlorpyrifos tolerances because those tolerances were not safe, particularly because of the potential negative effects the insecticide has on children. For more information about chlorpyrifos and the EPA’s final rule, visit the EPA’s website.
Trusts aren’t to be used as shields. An Ohio appeals court recently reinforced the concept that under Ohio law, trusts are not be used as a way to shield a person’s assets from creditors. Recently, a plaintiff filed a lawsuit against a bank alleging breach of contract and conversion, among other things. Plaintiff, an attorney and real estate developer, claimed that the bank removed money from his personal account and a trust account in violation of Ohio law and the terms of the loan agreement between the parties. Prior to the lawsuit, plaintiff established a revocable trust for estate planning purposes and to acquire and develop real estate. This dispute arose from a $200,000 loan from the bank to the plaintiff to help establish a restaurant. A provision of the loan agreement, known as the “Right to Setoff” provision, allowed the bank to “setoff” or effectively garnish all accounts the plaintiff had with the bank. The setoff provision explicitly prohibited any setoff from any IRA or trust accounts “for which setoff would be prohibited by law.” Plaintiff made all monthly payments but failed to make the final balloon payment on the loan. Plaintiff argued that the bank broke the loan contract and violated Ohio law by taking funds from the trust account to pay off the remaining balance of the loan. The court disagreed. The court noted that under Ohio law, a settlor’s property in a revocable trust is subject to the claims of the settlor’s creditors. A settlor is a person who creates or contributes property to a trust. In this case, plaintiff was the creator, settlor, and sole beneficiary of the revocable trust. Because of that, the court concluded the bank did not violate Ohio law when using the trust account to setoff the balance of the loan. Additionally, the court found that the bank did not violate the terms of the loan agreement because a setoff from the trust account was not prohibited by law. The court noted that Ohio law did not intend to allow a settlor who is also a beneficiary of the trust to use a trust as a “shield” against creditors. Although trusts can be a useful estate planning tool, there are limits to what a trust can do, as evidenced by this case.
Renewable fuel supporters file appeal on E15 summer sales. Corn farmers have joined forces with the biofuel industry (“Petitioners”) to ask the D.C. Circuit Court of Appeals for a new hearing on a ruling that struck down the EPA’s 2019 decision to allow year-round E15 sales. Earlier this year, the same D.C. Circuit Court of Appeals issued an opinion that ruled the legislative text in the law supporting the biofuel mandate does not support the Trump administration’s regulatory waiver that allowed E15 to be sold during the summer months. In their petition, Petitioners argue that the D.C. Circuit Court made “significant legal errors.” Petitioners contend that the court should rehear the case because the intent behind the nation’s biofuel mandate is better served by the sale of E15 through the summer months because it is less volatile, has less evaporative emissions, and is overall better for the environment than other fuel sources. Petitioners also believe the court’s original decision deprives American drivers the choice of lower carbon emitting options at the gas pump.
Monsanto asks Supreme Court to review Ninth Circuit’s Roundup Decision. In its petition to the Supreme Court of the United States Monsanto Company (“Monsanto”) asked the Supreme Court to review the $25 million decision rendered by the Ninth Circuit Court of Appeals. In that decision, the Ninth Circuit held that the Federal Insecticide Fungicide and Rodenticide Act (“FIFRA”) did not preempt, or otherwise prevent, the plaintiff from raising California failure-to-warn claims on Roundup products and allowed plaintiff to introduce expert testimony that glyphosate causes cancer in humans. In trial, the plaintiff argued that Monsanto violated California’s labeling requirements by not including a warning on the Roundup label that glyphosate, which is found in Roundup, causes cancer. Monsanto argues that FIFRA expressly preempts any state law that imposes a different labeling or packaging requirement. Under FIFRA, Monsanto argues that the EPA did not require Monsanto to include a cancer warning on its Roundup label. Therefore, Monsanto maintains, that because California law differed from FIFRA, Monsanto was not required to follow California law when it came to labeling its Roundup product. Secondly, the Ninth Circuit allowed plaintiff to present expert evidence that glyphosate could cause non-Hodgkin’s lymphoma in the general public and that glyphosate caused the plaintiff’s lymphoma. Monsanto contends that the lower courts have distorted established precedent by allowing the expert testimony because the testimony is not based on generally accepted scientific principles and the scientific community has consistently found that glyphosate does not cause cancer in humans.
USDA working to protect nation’s dairy industry. The USDA’s Agricultural Marketing Service (“AMS”) has struck a deal with the European Union (“EU”) to satisfy the EU’s new import requirements on U.S. dairy. The EU will require new health certificates for U.S. dairy products exported to the EU to verify that the U.S. milk used for products exported to the EU is sourced from establishments regulated under the Grade “A” Pasteurized Milk Ordinance or the USDA AMS Milk for Manufacturing Purposes. Officials representing the U.S. Dairy Export Council and International Dairy Foods Association claim that the deal will allow U.S. producers to comply with the EU’s mandates while also satisfying the concerns within the American dairy industry. The deal pushes back the EU’s deadline for new health certificates to January 15, 2022, to allow U.S. producers and exporters enough time to bring their products into compliance. The USDA also announcedthat it is providing around $350 million to compensate dairy producers who lost revenue because of market disruptions due to the COVID-19 pandemic and a change to the federal pricing formula under the 2018 farm bill. Additional details are available at the AMS Dairy Program website.
Tale as old as time. An Ohio appeals court recently decided a dispute between neighbors about a driveway easement. The driveway in dispute is shared by both neighbors to access their detached garages. Defendants used the driveway to access their garage and then the driveway extends past the Defendants’ garage onto Plaintiff’s property and ends at Plaintiff’s garage. The dispute arose after Defendants built a parking pad behind their garage and used parts of the driveway they never used before to access the parking pad. The original easement to the driveway was granted by very broad and general language in a 1918 deed, when the property was divided into two separate parcels. In 1997, a Perpetual Easement and Maintenance Agreement (“Agreement”) was entered into by the two previous property owners. The Agreement was much more specific than the 1918 deed and specifically showed how far the easement ran and what portions of the driveway could be used by both parties. The 1997 Agreement did not allow for Defendants to use the portion of the driveway necessary to access their parking pad. Plaintiffs argue that the 1997 Agreement controls the extent of the easement, whereas Defendants argue that the broad general language in the 1918 deed grants them authority to use the whole length of the driveway. The Court found the more specific 1997 Agreement to be controlling and ruled in favor of the Plaintiffs. The Court reasoned that the 1918 deed creates an ambiguity as to the extent of the easement and there is no way of knowing what the original driveway looked like or how it was used. The Court concluded that the 1997 Agreement does not contradict or invalidate the 1918 deed, rather the 1997 Agreement puts specific parameters on the existing easement and does not violate any Ohio law. The Defendants were found liable for trespass onto the Plaintiffs’ property and is expected to pay $27,500 in damages. The lesson to be learned from all of this? Make sure your easements are as specific and detailed as possible to ensure that all parties are in compliance with the law.
Tags: USDA, EPA, chlorpyrifos, trusts, Estate Planning, Renewable Fuel, roundup, glyphosate, dairy, Easements
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Did you know that elephants can’t jump? In fact, it’s impossible for elephants to jump because, unlike most mammals, the bones in an elephant’s leg are all pointed downwards, which eliminates the “spring” required to push off the ground.
Unlike elephants, we have jumped all over the place to bring you this week’s Ag Law Harvest. Below you will find agricultural and resource law issues that include, among other things, conspiracy, preemption, succession planning support, ag spending and disaster relief, and Ohio’s broadband and salmon expansion.
Poultry price fixing conspiracy. According to a press release from the Department of Justice (“DOJ”) a federal grand jury has decided to indict Koch Foods and four former executives of Pilgrim’s Pride for allegedly engaging in a nationwide conspiracy to fix prices and rig bids for broiler chicken products. These indictments combine to make a total of 14 individuals charged in the conspiracy that allegedly started in 2012 and lasted until 2019. The indictments allege that the defendants and co-conspirators conspired to suppress and eliminate competition for sales of broiler chicken products sold to grocers and restaurants. The DOJ reiterated its commitment to prosecuting price fixing and antitrust violations. These indictments come on the heels of President Biden’s Executive Order seeking to promote competition within the American Economy, which focused heavily on the agriculture industry. In addition to Koch Foods, additional companies have been indicted in the conspiracy. So far, Claxton Poultry and Pilgrim’s Pride have both been indicted in the conspiracy with Pilgrim’s Pride agreeing to pay a $107 million fine. Koch Foods denies any involvement in the price fixing scheme.
FIFRA giving Monsanto a little relief. About a week before the trial of another lawsuit against the Monsanto Company (“Monsanto”) and its Roundup products, a California judge dismissed some of the claims filed by the plaintiff. According to the judge, some of the claims asserted by the plaintiff were preempted by the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”) and therefore could not be pursued. The plaintiff claimed that Monsanto had a state-law duty to warn that Roundup causes cancer. The judge noted that under FIFRA, a state cannot impose or continue to impose any requirement that is “in addition to or different from” those required by FIFRA. At the time, federal regulations did not require Monsanto to place a cancer warning on its Roundup products. The judge reasoned that since federal law is supreme (i.e. preempts state law) California cannot impose a state-law duty on Monsanto to warn that Roundup causes cancer. The judge, therefore, found that the plaintiff cannot pursue her claims against Monsanto for failure to warn under California law. This ruling is in contrast to a recent 9th Circuit Court of Appeals decision which concluded that the failure to warn claims brought by the plaintiff in that suit were not preempted by FIFRA. Plaintiff has time to appeal the judge’s decision, even beyond the start of the trial and could rely on the 9th Circuit’s opinion to help her argue that her claims should not have been dismissed.
Competitive loans now available for land ownership issues and succession planning. The USDA announced that it will be providing $67 million in competitive loans through the new Heirs’ Property Relending Program (“HPRP”). The HPRP seeks to help agricultural producers and landowners resolve land ownership and succession issues. Lenders can apply for loans up to $5 million at 1% interest through the Farm Service Agency (“FSA”) once the two-month signup window opens in late August. Once the lenders are selected, heirs can apply to those lenders for assistance. Heirs may use the loans to resolve title issues by financing the purchase or consolidation of property interests and for costs associated with a succession plan. These costs can include buying out fractional interests of other heirs, closing costs, appraisals, title searches, surveys, preparing documents, other legal services. Lenders will only make loans to heirs who: (1) look to resolve ownership and succession of a farm owned by multiple owners; (2) are a family member or heir-at-law related by blood or marriage to the previous owner; and (3) agree to complete a succession plan. The USDA has stated that more information on how heirs can borrow from lenders under the HPRP will be available in the coming months. For more information on HPRP visit https://www.farmers.gov/heirs/relending.
House Ag Committee approves disaster relief bill. The House Agriculture Committee approved an $8.5 billion disaster relief bill to extend the Wildfire and Hurricane Indemnity Program (“WHIP”). The bill, known as the 2020 WHIP+ Reauthorization Act, provides relief for producers for 2020 and 2021 related to losses from the ongoing drought in the western half of the United States, the polar vortex that hit Texas earlier this year, wildfires that tainted California wine grapes with smoke, and power outages, like the one seen during the polar vortex in Texas, which caused dairy farmers to dump milk. The bill makes it easier for farmers to recover for losses related to drought, now only requiring a D2 (severe) designation for eight consecutive weeks as well as allowing disaster relief payments for losses related to power outages that result from a qualified disaster event. With the Committee’s approval the bill makes its way to the house floor for a debate/vote. Whether it’s a standalone bill or a bill that is incorporated into an appropriations bill or a year-end spending measure remains to be seen.
Senate Appropriations Committee approves ag spending bill. The Senate Appropriations Committee voted in favor of a fiscal year 2022 spending bill for the USDA and FDA that includes about $7 billion in disaster relief and $700 million for rural broadband expansion. The Committee approved $25.9 billion for the FY2022 ag spending bill, which is an increase of $2.46 billion from the current year. In addition to disaster relief funds and rural broadband, the bill increases research funding to the USDA, increass funding for conservation and climate smart agricultural practices, and increases funding for rural development including infrastructure such as water and sewer systems and an increase in funding to transition rural America to renewable energy. The ag spending bill is now set for debate and vote by the full Senate.
Ohio to be the second site for AquaBounty’s genetically engineered salmon. Land-based aquaculture company AquaBounty has selected Pioneer, Ohio as the location for its large-scale farm for AquaBounty’s genetically engineered salmon. The new farm will be AquaBounty’s first large-scale commercial facility and expects to bring over 100 jobs to northwestern Ohio. According to AquaBounty’s press release, the plan for the new farm is still contingent on approval of state and local economic incentives. Ohio is still finalizing a package of economic incentives for the new location and AquaBounty hopes to begin construction on the new facility by the end of the year. AquaBounty has modified a single part of the salmon’s DNA that causes them to grow faster in early development. It raises its fish in what it calls “Recirculating Aquaculture Systems,” which are indoor facilities that are designed to prevent disease and protect wild fish populations. According to AquaBounty, its production methods offer a reduced carbon footprint and no risk of pollution of marine ecosystems as compared to traditional salmon farming. AquaBounty anticipates commercial production to begin in 2023.
DeWine orders adoption of emergency rules to speed up the deployment of broadband in Ohio. Governor Mike DeWine signed an executive order which will help speed up the launch of the Ohio Residential Broadband Expansion Grant Program (the “Program”) which was recently signed into law by Governor DeWine. The Program is Ohio’s first-ever residential broadband expansion program which grants the Broadband Program Expansion Authority the power to review and award Program grant money for eligible projects. The Program requires a weighted scoring system to evaluate and select applications for Program grants. Applications must be prioritized for unserved areas and areas located within distressed areas as defined under the Urban and Rural Initiative Grant Program. The Program hopes to provide high-speed internet to Ohio residences that do not currently have access to such services. With DeWine’s executive order, the Program can start immediately rather than waiting until the lengthy administrative rule making process is complete. Normally, rules by a state agency must go through a long, drawn out process to ensure the public has had its input on any proposed rules and those affected the most can challenge or argue to amend the rules. However, the Governor does have the ability to suspend the normal rule making process when an emergency exists requiring the immediate adoption of rules. According to Governor DeWine’s executive order, the COVID-19 pandemic, the increase in telework, remote learning, and telehealth services have created an emergency that allows DeWine to suspend the normal rule making process to allow the Program to be enacted without delay. Although emergency rules are in place, they are only valid for 120 days. New, permanent rules must be enacted through the normal rule making procedure.
Tags: Estate and Succession Planning, broadband, USDA, Ag Spending Bill, Disaster Relief, FIFRA, U.S. Constitution
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“Carbon farming” is a term that came and went about a decade ago, but it’s back and gaining traction. Ohio farmers now have opportunities to engage in the carbon farming market and receive payments for generating “carbon credits” through farming practices that reduce carbon emissions or capture atmospheric carbon. As with any emerging market, there are many uncertainties about the carbon market that require a cautious approach. And as we’d expect, there are legal issues that arise with carbon farming.
Some of those legal issues center on carbon agreements--the legal instruments that document the terms of a carbon farming relationship. Each carbon market program has its own carbon agreement, so the terms of those agreements vary from program to program. Even so, understanding the basics of this unique legal agreement is a necessity.
Here’s what we know at this point about carbon agreements and the legal issues they may raise.
New terminology. Carbon markets and carbon agreements speak a new language, containing many terms we don’t ordinarily use in the agricultural arena. The terms are not fully standardized, and their meanings may differ from one program to another. Understanding these new terms and their legal significance to the carbon agreement relationship is important. Common terms to know are below but check each program to clarify its definitions for these terms.
- Carbon practices. Farming practices that have the potential to reduce carbon emissions or sequester carbon.
- Carbon sequestration. The process of capturing and storing atmospheric carbon.
- Carbon credit. A measurable, quantifiable unit representing a reduction of carbon dioxide emissions that can be transferred from one entity to another. A credit typically represents one metric ton of “carbon dioxide equivalent, which is a metric that standardizes the global warming potential of all greenhouse gases by converting methane, nitrous oxide and fluorinated gases to the equivalent global warming potential of carbon dioxide.
- Carbon offset. Using a carbon credit generated by another entity to offset the emissions of an entity that emits carbon elsewhere.
- Carbon inset. A reduction of carbon within a specific supply chain that emits carbon, accomplished by adopting practices within that supply chain.
- Carbon registry. An entity that oversees the registration and verification of carbon credits and offsets.
- Verification. The process of confirming carbon reduction benefits, typically performed by a third-party that reviews the carbon practices and the accounting of carbon credits generated by the practices.
- Additionality. Carbon reduction that results from carbon practices incentivized by the carbon agreement and that would not have occurred in the absence of the incentive.
- Permanence. The longevity of a carbon reduction, which may be enhanced by a requirement that carbon practices remain in place over a long period of time and steps are taken to reduce the risk of reversal of the carbon reduction.
- Reversal risk. Risk that a carbon reduction will be reversed by future actions such as changing tillage or harvesting the trees or vegetation planted to generate the carbon reduction.
Initial eligibility criteria. Each carbon program has specific requirements for participating in the program. Two common eligibility criteria are:
- Location. The program may be open only to farmers in a particular geographic location, such as within a specified watershed, region, or state.
- Acreage. A minimum acreage requirement often exists, although that can vary from 10 acres to 1,000 or more acres. Some projects may allow adjacent landowners to aggregate to meet the minimum acreage requirement, but that can raise questions of ineligibility should one landowner leave the program.
- Land control. If the farmer doesn’t own the land on which carbon practices will occur, an initial requirement may be to offer proof that the farmer will have legal control over the land for the period of the agreement, such as a written lease agreement or certification by the tenant farmer.
Payment. While the goal of a carbon agreement is often to generate carbon credits to be traded in the carbon market, there are varied ways of paying a farmer for adopting the practices that create those credits. One is a per-acre payment for the practices adopted, with the payment amount tied to the reduction of carbon resulting from the adopted practices. Another approach incorporates the carbon market—a guaranteed payment that can increase according to market conditions. Concerns about market transparency abound here. Yet another method is to calculate the payment after verification and quantification by a third-party. For each of these different approaches, the amount could be based upon a model, actual soil sampling, or a combination of the two. Payments may be annual or every several years. Another consideration is the form of payment, which could be cash, company credits, or “cryptocurrency”—digital money that can be used for certain purposes. Also be aware that some carbon agreements prohibit “payment stacking,” or receiving payments for the same carbon practices from multiple private or public sources.
Acceptable carbon practices. Carbon practices are the foundation for generating carbon credits. An agreement might outline acceptable carbon practices a farmer must adopt as the basis for the carbon credit, such as NRCS Conservation Practices. Alternatively, an agreement might allow flexibility in determining which carbon practices to use or could state practices that are not acceptable. Typical carbon practices include planting cover crops, using no-till or reduced tillage practices, changing fertilizer use, rotating or diversifying crops, planting trees, and retiring land from production.
Additionality. Many agreements require “additionality,” which means there must be new or “additional” carbon reductions that occur because of the carbon agreement, which would not have occurred in the absence of the agreement. On the other hand, some agreements accept past carbon practices up to a certain period of time, such as within the past two years. This is a tricky term to navigate for farmers who have engaged in acceptable practices in the past. An agreement may address whether those practices count toward the generation of a carbon credit or for payment purposes.
Time periods. Two time periods might exist in an agreement. The first is the required length of time for participation in the program, which may vary from one year to ten or more years. The second relates to the concept of “permanence,” or long-term carbon reductions. To ensure permanence and reduce the risk that gains in one year could be lost by changes in the next year, the agreement may require continuation of the carbon practices for a certain time period after the agreement ends, such as five or ten years.
Verification and certification. Here’s an important question—how do we know whether the carbon practices do generate carbon reductions that translate into actual carbon credits? Verification and certification help provide an answer. But verification is a testy topic because there is uncertainty about how to identify and measure carbon reductions resulting from different practices on different soils in different settings. Predictions that are based upon models are common, but there is disagreement over appropriate and accurate methodology for the models. Some programs may also verify practices with data acquisition and on-the-ground monitoring activities and soil tests. And it’s common to require that an independent third party verify and certify the practices and carbon credits, raising additional questions of which verifiers are acceptable. A final concern: who pays the costs of verification and certification?
Data rights and ownership. The verification question naturally leads us to a host of data questions. Data is critical to understanding and verifying carbon practices, and every agreement should include data sharing and ownership provisions. What data must be shared, who has access to the data, how will data be used, and who owns the data are questions in need of clear answers in the agreement.
Legal remedies. There’s always the risk that a contract will go bad in some way, whether due to non-performance, non-payment, or disputes about performance and payment. A carbon agreement could include provisions that outline how the parties will remedy these problems. An agreement might define circumstances that constitute a breach and the actions one party may take if breach conditions occur. An agreement could also list reasons for withholding payment from a farmer; one concern is that insufficient data or proof of carbon reductions or carbon credit generation could be a basis for withholding payment. There could also be penalties for early withdrawal from the program or early termination of the agreement. It’s important to decipher any legal remedies that are contained within a carbon agreement.
We’ve heard of carbon farming before, but today it raises new uncertainties. Caution and careful consideration of a carbon agreement should address some of those uncertainties. Our list offers a starting point, but it’s not yet a complete list. As we learn more about the developing carbon farming market, we’ll continue to raise and hopefully resolve the legal issues it can present.
For more information on carbon agreements, see this listing from the Ohio Soybean Council of programs available to Ohio farmers with a side-by-side comparison of those programs, and this report on How to Grow and Sell Carbon Credits in US Agriculture from Iowa State University Extension..
Tags: carbon, carbon farming, carbon agreements
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Did you know that Giant Panda cubs can be as small as a stick of butter? A panda mother is approximately 900 times bigger than her newborn cub, which can weigh less than 5 ounces. This is like an 8-pound human baby having a mother that weighed 7,200 pounds – this size difference may explain why so many panda cubs die from accidentally being crushed by their mothers. However, not everything is doom and gloom for the Giant Panda. Chinese officials have officially downgraded pandas from “endangered” to “vulnerable.” Although the International Union for Conservation of Nature re-labelled, the Panda as “vulnerable” in 2016, China wanted to make sure that the population of its national treasure continued to grow before downgrading the panda’s classification.
Although it seems as though pandas are thriving thanks to conservation efforts in China, not all animal species in China are so lucky. This week’s Ag Law Harvest takes a trip around the world to bring you domestic and international agricultural and resource issues. We take a look at court decisions, Congress’ latest actions, China’s struggle with African Swine Fever, and President Biden’s latest executive order.
Iowa Supreme Court Dismisses Raccoon River Lawsuit. Environmental organizations (“Plaintiffs”) filed a lawsuit against the state of Iowa and its agencies (“Defendants”) asking the court to compel Defendants to adopt legislation that would require Iowa farmers to implement practices that would help reduce the levels of nitrogen and phosphorus in Raccoon River. The Plaintiffs argued that Defendants violated their duty under the Public Trust Doctrine (“PTD”), which is a legal doctrine that requires states to hold certain natural resources in trust for the benefit of the state’s citizens. Defendants argued that Plaintiffs lacked standing to bring the lawsuit. The Iowa Supreme Court agreed with Defendants and found that a ruling in Plaintiffs’ favor would not necessarily remediate Plaintiffs’ alleged injuries, and therefore the Plaintiffs lacked standing to bring the lawsuit. The Iowa Supreme Court also found that Plaintiffs’ issue was a nonjusticiable political question. The political question doctrine is a principle that helps prevent upsetting the balance of power between the branches of government. Under the doctrine, courts will not decide certain issues because they are better suited to be decided by another branch of government. In this case, the court reasoned that Plaintiffs’ issue was better suited to be resolved through the legislative branch of government, not the judicial branch. The Iowa Supreme Court decision is significant because, as it stands, agricultural producers in the Raccoon River Watershed will not be required to adopt any new practices but the decision leaves it up to Iowa’s legislature to determine whether farmers should be required to adopt new practices under the PTD to help reduce nitrogen and phosphorus in Raccoon River.
U.S. House of Representatives’ spending bill increases focuses on climate action and environmental protection. Before the July 4th break, the United States House Appropriations Committee approved the first of its Fiscal Year 2022 (“FY22”) funding bills. Included in these bills is the agriculture funding bill, which will be sent to the House floor for full consideration. The bill provides $26.55 billion in the discretionary funding of agencies and programs within the USDA, FDA, the Commodity Futures Trading Commission, and the Farm Credit Administration – an increase of $2.851 billion from 2021. In total, the agriculture funding bill includes $196.7 billion for both mandatory and discretionary programs. The bill focuses on: (1) rural development and infrastructure – including rural broadband; (2) food and nutrition programs to help combat hunger and food insecurity; (3) international food assistance to promote U.S. agricultural exports; (4) conservation programs to help farmers, ranchers, and other landowners protect their land; (5) ag lending; (6) climate-related work to help research and remedy the climate crisis; and (7) enforcement of environmental programs. The agriculture spending bill will, however, have to be reconciled with any spending bill produced by the U.S. Senate.
U.S. House Agriculture Committee advances rural broadband bill. The House Agriculture Committee (the “Committee”) unanimously voted to advance the Broadband Internet Connections for Rural America Act (the “Act”), which would authorize $4.5 billion in annual funding, starting in fiscal year 2022, for the Broadband ReConnect Program (the “Program”) through fiscal year 2029. The existing Program is set to expire on June 30, 2022. To demonstrate Congress’ commitment to expanding rural broadband, the Program was only given $742 million in 2021. It is unclear whether the Act will be included in the infrastructure package that is currently being negotiated between Congress and the White House. Under the Act, the USDA must give the highest priority to projects that seek to provide broadband service to unserved communities that do not have any residential broadband service with speeds of at least 10/1 Mbps. The USDA will then prioritize communities with less than 10,000 permanent residents and areas with a high percentage of low-income families.
Small hog farmers in China no longer required to seek environmental approval. China is the world’s largest pork producer and over the past few years, its hog herds have been decimated. A deadly African Swine Fever (“ASF”) has wiped out about half of China’s hog herds, especially affecting small farmers. According to Reuters, China relies heavily on small farmers for its pork output, but because of ASF, small farmers have been left with little to no product and mass amounts of debts. Further, Chinese farmers are hesitant to rebuild their herds because ASF is an ongoing risk and farmers stand to lose everything if they continue to raise diseased hogs. Addressing these concerns, China’s agriculture ministry will no longer require small hog farmers to get environmental approval from the government before breeding their hogs. China hopes to reduce the costs and red tape for small farmers as China tries to incentivize small farmers to rebuild their hog herds. African Swine Fever is a highly contagious and deadly viral disease affecting both domestic and feral swine. The ASF poses no threat to human health but can decimate domestic hog populations. Germany has recently reported its first two cases of ASF in domestic hogs. Currently, ASF has not been found within the United States, and the USDA hopes to keep it that way. To learn more about ASF, visit the USDA’s Animal and Plant Health Inspection Service website.
President Biden signs executive order to reduce consolidation in agriculture. President Biden’s recent Executive Order on Promoting Competition in the American Economy seeks to address inadequate competition within the U.S. economy that the administration believes holds back economic growth and innovation. The Order includes more than 70 initiatives by more than a dozen federal agencies to promote competition. With respect to agriculture, the Order seeks to break up agricultural markets “that have become more concentrated and less competitive.” The Biden Administration believes that the markets for seeds, equipment, feed, and fertilizer are dominated by a few large companies which negatively impacts family farmers and ranchers. The Biden Administration believes that the lack of competition increases the costs of inputs for family farmers all while decreasing the revenue a family farmer receives. The Order directs the USDA to consider issuing new rules: (1) making it easier for farmers to bring and win lawsuits under the Packers and Stockyards Act; (2) prohibiting chicken processors from exploiting and underpaying chicken farmers; (3) adopting anti-retaliation protections for farmers who speak out about a company’s bad practices; and (4) defining when meat producers can promote and label their products as a “Product of the USA.” The Order also requires the USDA to develop a plan to increase opportunities for small farmers to access markets and receive a fair return and encourages the Federal Trade Commission to limit when equipment companies can restrict farmers from repairing their own farm machinery. Follow this link to learn more about President Biden’s recent Executive Order.
Tags: USDA, Executive Order, African Swine fever, congress, Rural Broadband, Raccoon River, Iowa Supreme Court, Public Trust Doctrine, Agriculture, ag law harvest
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"Farm Office Live" returns this summer as an opportunity for you to get the latest outlook and updates on ag law, farm management, ag economics, farm business analysis, and other related issues. Targeted to farmers and agri-business stakeholders, our specialists digest the latest news and issues and present it in an easy-to-understand format.
The live broadcast is presented monthly. In months where two shows are scheduled, one will be held in the morning and one in the evening. Each session is recorded and posted on the OSU Extension Farm Office YouTube channel for later viewing.
Current Schedule:
| July 23, 2021 | 10:00 - 11:30 am | December 17, 2021 | 10:00 - 11:30 am |
| August 27, 2021 | 10:00 - 11:30 am | January 19, 2022 | 7:00 - 8:30 pm |
| September 23, 2021 | 10:00 - 11:30 am | January 21, 2022 | 10:00 - 11:30 am |
| October 13, 2021 | 7:00 - 8:30 pm | Februrary 16, 2022 | 7:00 - 8:30 pm |
| October 15, 2021 | 10:00 - 11:30 am | February 18, 2022 | 10:00 - 11:30 am |
| November 17, 2021 | 7:00 - 8:30 pm | March 16, 2022 | 7:00 - 8:30 pm |
| November 19, 2021 | 10:00 - 11:30 am | March 18, 2022 | 10:00 - 11:30 am |
| December 15, 2021 | 7:00 - 8:30 pm | April 20, 2022 | 7:00 - 8:30 pm |
Topics we will discuss in upcoming webinars include:
- Coronavirus Food Assitance Program (CFAP)
- Legislative Proposals and Accompanying Tax Provisions
- Outlook on Crop Input Costs and Profit Margins
- Outlook on Cropland Values and Cash Rents
- Tax Issues That May Impact Farm Businesses
- Legal Trends
- Legislative Updates
- Farm Business Management and Analysis
- Farm Succession & Estate Planning
To register or to view a previous "Farm Office Live," please visit https://go.osu.edu/farmofficelive. You will receive a reminder with your personal link to join each month.
The Farm Office is a one-stop shop for navigating the legal and economic challenges of agricultural production. For more information visit https://farmoffice.osu.edu or contact Julie Strawser at strawser.35@osu.edu or call 614.292.2433
Tags: Farm Office Live, farm management, Farm Succession, Estate Planning, Farm Business, Dairy Production, Farm Tax, Agricultural Law, Resource Law
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Did you know that the Florida Panther is the last subspecies of Mountain Lion found east of the Mississippi River? The Florida Panther is an endangered species with an estimated population of under 100 panthers. As bleak as it may seem, things may be looking up for the Florida Panther to make a roaring comeback (which is ironic because Florida Panthers can’t roar).
Like the Florida Panther, we have prowled agricultural and resource issues from across the country. Topics include a historic move by Florida to protect its wildlife and natural resources, agritourism getting a boost in Pennsylvania, Colorado’s livestock industry receiving a lifeline, and USDA efforts to expand broadband and water quality initiatives.
Florida makes conservation history. Florida has recently enacted a new law known as the Florida Wildlife Corridor Act (the “Act”). The Act creates a wildlife corridor that will connect Florida’s large national and state parks and create an unbroken area of preserved land that stretches from the Alabama state line all the way down to the Florida Keys. Specifically, the Act looks to protect about 18 million acres of habitat for Florida’s wildlife. The Act seeks to prevent wildlife, like the Florida Panther, from being cut off from other members of its species, which is a main driver of extinction. The Act also aims to protect Florida’s major watersheds and rivers, provide wildlife crossings over and/or under major highways and roads, and establish sustainable practices to help working ranches, farms and, forests that will be vital to ensuring the success and sustainability of the wildlife corridor. The Act goes into effect July 1 and provides $400 million in initial funding to help purchase land to create the corridor.
Pennsylvania provides protection for agritourism operators. Pennsylvania Governor, Tom Wolf, signed House Bill 101 into law. Like Ohio’s law, House Bill 101 shields agritourism operators from certain lawsuits that could arise from circumstances beyond their control. House Bill 101 prevents participants in an agritourism activity from suing the agritourism operator if the operator warns participants of the inherent risks of being on a farm and engaging in an agritourism activity. An agritourism operator must: (1) have a 3’ x 2’ warning sign posted and notifying participants that an agritourism operator is not liable, except under limited circumstances, for any injury or death of a participant resulting from an agritourism activity; and (2) have a signed written agreement with an agritourism participant acknowledging an agritourism operator’s limited liability or have specific language printed on an admission ticket to an agritourism activity that notifies and warns a participant of an agritourism operator’s limited liability. House Bill 101, however, does not completely shelter agritourism operators. An agritourism operator can still be liable for injuries, death, or damages arising from overnight accommodations, weddings, concerts, and food and beverage services. The enactment of House Bill 101 will help to protect farmers from costly and unnecessary lawsuits and provide additional sustainability to Pennsylvania’s agritourism industry.
Colorado Supreme Court strikes proposed ballot initiative seeking to hold farmers liable for animal cruelty. The Colorado Supreme Court issued an opinion removing Initiative 16, also known as the Protect Animals from Unnecessary Suffering and Exploitation Initiative (“PAUSE”), from voter consideration. Initiative 16 sought to amend Colorado law and remove certain agriculture exemptions from Colorado’s animal cruelty laws. Initiative 16 intended to set limitations on the slaughter of livestock and to broadly expand the definition of “sexual act with an animal” to include any intrusion or penetration of an animal’s sexual organs, which opponents of the initiative have argued would prohibit artificial insemination and spaying/neutering procedures. The Colorado Supreme Court found that the initiative violated Colorado’s single-subject requirement for ballot initiatives and therefore, was an illegal ballot initiative. The court argued that the central theme of the initiative was to incorporate livestock into Colorado’s animal cruelty laws. However, because the initiative redefined “sexual act with an animal” to include animals other than livestock, the court concluded that the ballot initiative covered two subjects, not one. The court reasoned that because the initiative addresses two unrelated subjects, voters could be surprised by the consequences of the initiative if it passed, which is why Colorado has single-subject requirement for ballot initiatives.
USDA announces dates for Conservation Reserve Program (“CRP”) signups. The USDA set a July 23 deadline for agricultural producers and landowners to apply for the CRP General and will also be accepting applications for CRP Grasslands from July 12 through August 20. Through the CRP General, producers and landowners establish long-term conservation practices aimed at conserving certain plant species, controlling soil erosion, improving water quality, and enhancing wildlife habitat on cropland. CRP Grasslands helps landowners and producers protect grasslands including rangeland, pastureland, and certain other lands, while maintaining grazing lands. To enroll in the CRP, producers and landowners should contact their local USDA Service Center.
USDA expands CLEAR30 initiative nationwide. The USDA announced that landowners and agricultural producers currently enrolled in CRP now have an opportunity to sign a 30-year contract through the Clean Lakes, Estuaries, and Rivers Initiative (“CLEAR30”). CLEAR30 was created by the 2018 Farm Bill to address water quality concerns and was originally only available in the Great Lakes and Chesapeake Bay watersheds. Now, producers and landowners across the country can sign up for CLEAR30. Eligible producers must have certain water quality improvement practices under a continuous CRP or under the Conservation Reserve Enhancement Program (“CREP”) and contracts that are set to expire on September 30, 2021. The USDA hopes that by expanding the initiative, it will enable more producers to take conservation efforts up a level and create lasting impacts. CLEAR30’s longer contracts help to ensure that conservation benefits will remain in place longer to help in reducing sediment and nutrient runoff and reducing algal blooms. To sign up, producers and landowners should contact their local USDA Service Center by August 6, 2021.
Three federal agencies enter into agreement to coordinate broadband funding deployment. The Federal Communications Commission (“FCC”), the USDA, and the National Telecommunications and Information Administration (“NTIA”) entered into an agreement to coordinate the distribution of federal funds for broadband development in rural and underserved areas. In an announcement released by the USDA, Secretary Vilsack stressed the importance of broadband in rural and underserved communities. Lessons learned from the COVID-19 Pandemic have made access to broadband a central issue for local, state, federal and Tribal governments. The goal is to get 100% of Americans connected to high-speed internet. As part of the signed agreement, the agencies will share information about existing or planned projects and identify areas that need broadband service in order to reach the 100% connectivity goal. Visit the USDA’s Rural Development Telecom Programs webpage to learn more about the USDA’s efforts to provide broadband service in rural areas.
Tags: ag law harvest, USDA, conservation, environmental, agritourism, livestock, water quality, broadband
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The meaning of the word “extension” was at the heart of a dispute that made its way to the U.S. Supreme Court over small refinery exemptions under the nation’s Renewable Fuel Program (RFP). The decision by the Supreme Court came as a bit of a surprise, as questions raised by the Justices during oral arguments on the case last Spring suggested that the Court would interpret “extension” differently than it did in its June 27 decision.
Congress established the RFP in 2005 to require domestic refineries to incorporate specified percentages of renewable fuels like ethanol into the fuels they produce. Recognizing that meeting RFP obligations could be more difficult and costly for small-scale refineries, Congress included an automatic two-year exemption from RFP obligations in the statute for small refineries producing less than 75,000 barrels per day.
The law also allowed the Secretary of Energy to extend an exemption for a small refinery an additional two years if blending of renewables would impose a “disproportionate economic hardship” and authorized a small refinery to petition the EPA for an “extension” of an exemption for the same economic hardship reason. This leads us to the significance of the meaning of the word “extension”: a small refinery that receives an extension of an exemption need not meet the RFP blending mandate for the period of the extension.
We likely all have opinions on what the word “extension” means, but what matters is what it means in the context of the statute that uses the word. But the RFP statute doesn’t define the word. The three small refineries that appealed the case to the Supreme Court argued that an extension is simply an increase in time. The extension, they claimed, need not be directly connected to and occur just after an exemption. The refineries had received the initial exemption from RFP blending, had a lapse of the exemption for a period, then later asked for and received an extension of the exemption from the EPA.
A group of renewable fuel producers led by the Renewable Fuels Association disagreed with the refineries and defined “extension” to mean an increase in time that also requires unbroken continuity with the exemption. They argued that the EPA could not grant a small refinery an extension if an exemption had already lapsed. Theirs was the definition adopted by the Tenth Circuit Court of Appeals, which held that the refineries could not receive an extension because their exemptions had lapsed and made them permanently ineligible for an extension.
In its decision, the majority on the Supreme Court held in favor of the definition advanced by the small refineries. Explaining that the courts must give a term its “ordinary or natural meaning” when Congress doesn’t provide a definition, the majority concluded that “it is entirely natural—and consistent with ordinary usage—to seek an “extension” of time even after some lapse.” Examples the Court drew upon included a student seeking an extension for a paper after its deadline, a tenant asking for an extension after overstaying a lease, and the negotiation of an extension to a contract after it expires. Additionally, federal laws such as recent COVID and unemployment legislation allow an extension of benefits following an expiration of those benefits, the Court explained. The Court also pointed to dictionary meanings of the word and contextual clues within the RFP statute, such as language in the statute stating that a small refinery may “at any time” petition for an extension.
Justice Gorsuch, who wrote the majority opinion, was careful to refute the arguments offered in the dissenting opinion written by Justice Coney-Barrett, joined by Justices Sotomayor and Kagan. Justice Coney-Barrett argued that a natural and ordinary reading of the RFP’s text and structure clearly indicate that an extension could not occur for an exemption that no longer exists. Referring to the Tenth Circuit’s earlier holding, the dissent agreed that the “ordinary definitions of ‘extension,’ along with common sense, dictate that the subject of an extension must be in existence before it can be extended.”
Does the future of ethanol markets hang on the meaning of one word? How will the decision affect the renewable fuels sector? Many claim that Congress included the exemptions to help small refineries adjust to and adopt the renewable blending mandates, but not to indefinitely avoid those mandates. Renewable fuel interests state that the exemptions have created a detrimental effect on the renewable fuels market. On the other hand, small refineries claim that Congress did not intend to drive them out of business by forcing them to comply with renewable blending requirements but instead designed the exemption and extension to protect them from disproportionate economic hardship.
How long the protection from RFP compliance remains in place for small refineries is a question many in agriculture are asking. Based on the Court’s recent decision, it could be indefinitely. Perhaps Congress should step in and clarify the meaning of that one simple word.
Read the Supreme Court decision in HollyFrontier Cheyenne Refining, LLC v Renewable Fuels Assn. here
Tags: ethanol, Renewable Fuel Program, U.S. Supreme Court, RFP exemptions
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