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.
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.
The Ohio General Assembly is off and running in its new session. Many bills that affect agriculture in Ohio are already on the move. Here’s a summary of those that are gaining the most momentum or attention.
Tax Conformity Bill – S.B. 18 and H.B. 48. The Senate has already passed its version of this bill, which conforms our state tax code with recent changes to the Internal Revenue Code made in the latest COVID-19 stimulus provisions of the Consolidated Appropriations Act. Both the Senate and the House will also exempt forgiven Paycheck Protection Program second-draw loan proceeds from the Commercial Activity Tax. The Senate version additionally exempts Bureau of Workers Compensation dividend rebates from the Commercial Activity Tax beginning in 2020, but the House bill does not. Both bills include “emergency” language that would make the provisions effective in time for 2020 tax returns.
Beginning farmers tax credits – H.B. 95. A slightly different version of this bill is returning after not passing in the last legislative session. The bi-partisan bill aims to assist beginning farmers through several temporary income tax credits:
- Businesses that sell or rent agricultural assets such as land, animals, facilities or equipment to certified beginning farmers can receive a 5% income tax credit for sales, a 10% of gross rental income credit for cash rents, and 15% of gross rental income for share rents.
- Certified beginning farmers can receive an income tax credit equal to the cost of participating in a certified financial management program.
Beginning farmers, among other requirements, are those in or seeking entry into farming in Ohio within the last ten years who are not a partner, member or shareholder with the owner of the agricultural assets and who have a net worth of less than $800,000 in 2021, which adjusts for inflation in subsequent years. Beginning farmers must be certified by the Ohio Department of Agriculture or a land grant institution. The House Agriculture and Conservation Committee will discuss the bill at its meeting on February 16.
Wind and solar facilities – S.B. 52. In addition to revising setback and safety specifications for wind turbines, this proposal would amend Ohio township zoning law to establish a referendum process for large wind and solar facility certificates. The bill would require a person applying for a certificate for a large wind or solar facility to notify the township trustees and share details of the proposed facility. That notification sets up opportunities for the township trustees or residents of the township to object to the application and submit the proposed application to a vote of township residents. A certificate would not take effect unless approved by a majority of the voters. A first hearing on S.B. 52 will be held on Tuesday, February 16 before the Senate Energy and Public Utilities Committee.
Grants for broadband services – H.B. 2 and S.B. 8. The Senate passed its version of this bill last week, which sets up a $20 million competitive grant program for broadband providers to extend broadband services throughout the state. The proposal would also allow broadband providers to use electric cooperative easements and poles, subject to procedures and restrictions. The bill had its second hearing before the House Finance Committee last week.
Eminent domain – H.B. 63. Based on a similar bill that didn’t pass last session, this bill changes eminent domain law in regard to property taken for the use of recreational trails, which include public trails used for hiking, bicycling, horseback riding, ski touring, canoeing and other non-motorized recreational travel. H.B. 63 would allow a landowner to submit a written request asking a municipality or township to veto the use of eminent domain for a recreational trail within its borders. The bill would also allow a landowner to object to a use of eminent domain for any purpose at any time prior to a court order for the taking, rather than limiting that time period to ten days as in current law. The bill had its first hearing before the House Civil Justice Committee last week.
Minimum wage increases. S. B. 51 and H.B. 69. Bills on each side of the General Assembly propose gradually increasing the state minimum wage to $15, but have different paths for reaching that amount. S.B. 51 proposes increasing the wage to $12/hour in 2022, followed by $1/hour increases each year and reaching $15 by 2025, which is when a federal bill proposes to establish the $15 minimum wage. H.B. 69 begins at $10/hour in 2022 with $1/hour increases annually, reaching $15 in 2027. S.B. 51 was referred last week to the Workforce and Higher Education Committee and H.B. 69 was referred to the Commerce and Labor Committee.