Did you know that a male moose loses its antlers every year? Moose usually lose their antlers every winter and grow new ones in the spring. Additionally, because of the lack of antlers during the winter months, a moose’s first line of defense is its sharp hooves, which can mortally wound a wolf or bear. This edition of the Ag Law Harvest kicks around a few USDA announcements and FDA rule proposals and sheds some light on overtime compensation for California’s agricultural workers.
USDA announces new micro-farm insurance policy. The U.S. Department of Agriculture’s (“USDA”) Risk Management Agency (“RMA”) announced that the USDA has developed a new micro farm insurance policy for agricultural producers with small-scale farms who sell locally. The new insurance policy seeks to simplify recordkeeping and introduces insurance coverage for post-production costs and value-added products. Farm operations that earn an average allowable revenue of $100,000 or less, or for carryover insureds, that earn an average allowable revenue of $125,000 or less are eligible for the policy. The new insurance policy will be available for the 2022 crop year. Crop insurance is sold and delivered sole through private crop insurance agents, a list of which can be found at the RMA Agent Locator.
USDA accepting applications to help rural communities get access to internet. The USDA announced that it has begun accepting applications for up to $1.15 billion in loans and grants to help rural communities gain access to high-speed internet. The announcement follows the recently enacted infrastructure bill, which provides another $2 billion in additional funding for USDA’s ReConnect Program. According to the USDA, the funding will be available for projects that serve rural areas where at least 90% of the households lack broadband service at speeds of 100 megabits per second (Mbps) (download) and 20 Mbps (upload). The USDA will give funding priority to projects that will serve people in low-density rural areas and areas lacking internet service speeds of at least 25 Mbps (download) and 3 Mbps (upload). In making the funding decisions, the USDA will consider the economic needs of the community to be served and the extent to which a provider will offer affordable service options to the community.
FDA proposing changes to testing requirements of pre-harvest agricultural water. The Food and Drug Administration (“FDA”) published a proposed rule that would change some provisions of the FDA’s Produce Safety Rule. The proposed rule seeks to replace the microbial criteria and testing requirements for pre-harvest agricultural water for covered produce other than sprouts. Some of the proposed changes include:
- Replacing the microbial quality criteria and testing requirements with new provisions for conducting pre-harvest agricultural water assessments for hazard identification and risk management purposes;
- A new testing option for certain covered farms that elect to test their pre-harvest agricultural water for generic Escherichia coli (“E. coli”);
- Providing additional flexibility in responding to findings from pre-harvest agricultural water assessments;
- Expedited implementation of mitigation measures for known or reasonably foreseeable hazards related to certain adjacent and nearby land uses; and
- Required management review of pre-harvest agricultural water assessments.
The FDA is accepting comments on the proposed rule until April 5, 2022.
California’s overtime compensation for agricultural workers. In 2016, California passed Assembly Bill No. 1066 that slowly implemented overtime wages for California’s agricultural workers. Beginning in 2022, agricultural employees are entitled to one-half times their regular rate of pay for all hours worked over eight hours in any workday or over 40 hours in any workweek. However, the law only affects agricultural employers with 26 or more employees. Agricultural employers with 25 or fewer employees will be required to follow the same overtime compensation structure beginning in 2025. California will also begin to require that any work performed by an agricultural employee in excess of 12 hours in any workday be paid twice their regular rate of pay. Again, this provision only effects agricultural employers with 26 or more employees but will go into effect for all agricultural employers in 2025.
Tags: ag law harvest, small farms, Insurance, USDA, FDA, overtime, Rural Broadband
Did you know that the fastest animal in the world is the Peregrine Falcon? This speedy raptor has been clocked going 242 mph when diving.
Like the Peregrine Falcon, this week’s Ag Law Harvest dives into supply chain solutions, new laws to help reduce a state’s carbon footprint, and federal and state case law demonstrating how important it is to be clear when drafting legislation and/or documents, because any ounce of ambiguity could lead to a dispute.
Reinforcing the links in the supply chain. President Joe Biden announced that ports, dockworkers, railroads, trucking companies, labor unions, and retailers are all coming together and have agreed to do their part to help reduce the supply chain disruption that has left over 70 cargo ships floating out at sea with nowhere to go. In his announcement, President Biden disclosed that the Port of Los Angeles, the largest shipping port in the United States, has committed to expanding its hours so that it can operate 24/7; labor unions have announced that its workers have agreed to work the additional hours; large companies like Walmart, UPS, FedEx, Samsung, Home Depot and Target have all agreed to expand their hours to help move product across the country. According to the White House, this expanded effort will help deliver an extra 3,500 shipping containers per week. Port and manufacturing disruptions have plagued retailers and consumers since the beginning of the COVID-19 pandemic. Farming equipment and parts to repair farming equipment are increasingly in short supply. The White House hopes that through these agreements, retailers and consumers can finally start to see some relief.
California breaking up with gas powered lawn equipment. California Governor Gavin Newsom recently signed a new bill into law that would phase out the use of gas-powered lawn equipment in California. Assembly Bill 1346 requires that new small off-road engines (“SOREs”), used primarily in lawn and garden equipment, be zero-emission by 2024. The California legislation seeks to regulate the emissions from SOREs which have not been as regulated as the emissions from other engines. According to the legislation, “one hour of operation of a commercial leaf blower can emit as much [reactive organic gases] plus [oxides of nitrogen] as driving 1,100 miles in a new passenger vehicle.” The new law requires the State Air Resources Board to adopt cost-effective and technologically feasible regulations to prohibit engine exhaust and emissions from new SOREs. Assembly Bill 1346 is a piece of the puzzle to help California achieve zero-emissions from off-road equipment by 2035, as ordered by Governor Newsome in Executive Order N-79-20.
U.S. Supreme Court asked to review E15 Vacatur. A biofuel advocacy group, Growth Energy, filed a petition asking the U.S. Supreme Court to review a federal court’s decision to abolish the U.S. Environmental Protection Agency’s (“EPA”) rule allowing for the year-round sale of fuel blends containing gasoline and 15% ethanol (“E15”). Growth Energy argues that the ethanol waiver under the Clean Air Act for the sale of ethanol blend gasoline applies to E15, the same as it does for gas that contains 10% ethanol (“E10”). Growth Energy also claims that limiting the ethanol waiver to E10 gasolines contradicts Congress’s intent for enacting the ethanol waiver because E15 better achieves the economic and environmental goals that Congress had in mind when it drafted the ethanol waiver. Growth Energy asks the Supreme Court to overturn the lower court’s decision and instead interpret the ethanol waiver as setting a floor, not a maximum, for fuel blends containing ethanol that can qualify for the ethanol waiver. Growth Energy now awaits the Supreme Court’s decision on whether or not it will take up the case. Visit our recent blog post for more background information on E15 and the waivers at issue.
When in doubt, trust the trust. A farm family in Preble County may finally be able to find some closure after the 12th District Court of Appeals affirmed the Preble County Court of Common Pleas’ decision to prevent a co-trustee from selling farm property. Dorothy Wisehart (“Dorothy”), the matriarch of the Wisehart family established the Dorothy R. Wisehart Trust (the “Trust”) in which she conveyed a one-half interest in two separate farm properties, both located within Preble County to the Trust. Dorothy retained her one-half interest in the two farms which passed to her son, Arthur, upon her death. Furthermore, upon Dorothy’s death, the Trust became an irrevocable trust with Arthur as the sole trustee. The Trust had five income beneficiaries – Arthur’s wife and four kids. The Trust specifically allowed for removal and replacement of the trustee upon the written request of 75% of the income beneficiaries. In 2010, four of the five income beneficiaries executed a document removing Arthur as the sole trustee and instead placed Arthur and Dodson, Arthur’s son and one of the income beneficiaries, as co-trustees. Arthur, however, argued that only Dorothy had the power to remove and appoint a new trustee and once Dorothy passed, no new trustee could be appointed. In 2015, Dodson filed suit against his father after Arthur allegedly tried to sell the two farms and further alleged that Arthur breached his fiduciary duty by withholding funds from the Trust. Dodson also asked the court to determine the issue of whether Dodson was validly appointed as co-trustee. The common pleas court sided with Dodson and found that (1) the Trust held an undivided one-half interest in the farms, (2) Dodson was validly appointed as co-trustee, and (3) Arthur wrongfully withheld funds from the Trust, breaching his fiduciary duty as a trustee. Arthur appealed, arguing that the case was not “justiciable” because the harms alleged by Dodson were hypothetical and no real harm occurred. However, the 12th District Court of Appeals disagreed with Arthur. The court found that the Trust expressly provided for the removal and appointment of trustees by 75% of the income beneficiaries. Further, the court ruled that this case was justiciable because Dodson’s allegations needed to be resolved by the courts or else real harm would have occurred to the income beneficiaries of the Trust. This case highlights perfectly the importance of having well drafted estate planning documents to help clear up any disputes that may arise once you’re gone.
No need to cut the “GRAS” today. Consumer advocates, Center for Food Safety (“CFS”) and Environmental Defense Fund (“EDF”), brought suit against the Food and Drug Administration (“FDA”) asking the court to overturn the FDA’s rule regarding “Substances Generally Recognized as Safe (the “GRAS Rule”). According to the plaintiffs, the GRAS Rule subdelegated the FDA’s duty to ensure food safety in violation of the United States Constitution, the Administrative Procedure Act (“APA”), and the Federal Food, Drug, and Cosmetic Act (“FDCA”). In 1958, Congress enacted the Food Additives Amendment to the FDCA which mandates that any food additive must be approved by the FDA. However, the definition of “food additive” does not include those substances that are generally recognized as safe. Things like vinegar, vegetable oil, baking powder and many other spices and flavors are generally recognized as safe to use in food and not considered to be a food additive. Under the GRAS Rule, anyone may voluntarily, but is not required to, notify the FDA of their view that a substance is a GRAS substance. There are specific guidelines and information that must be presented to back up a manufacturer’s claim that a substance is GRAS. In any case, the FDA retains the authority to issue warnings to manufacturers and to stop distribution when the FDA believes that a substance is not a GRAS substance. Plaintiffs claim that under the GRAS Rule, the FDA is subdelegating its duty by allowing manufacturers to voluntarily notify the FDA of a GRAS substance rather than requiring it. However, the Federal District Court for the Southern District of New York found that the FDA did not subdelegate its duties because the FDCA does not require the FDA provide prior authorization that a substance is GRAS. Further, the court held that the FDA has done nothing more than implement a process by which manufacturers can notify the FDA of GRAS determinations and the FDA can choose to agree or disagree. The court reasoned that even if a mandatory GRAS notification procedure or prior approval process were in place, manufacturers could simply lie about what’s in their products and the FDA would be none the wiser. The court also noted that mandatory submissions would consume the FDA’s resources which would be better spent evaluating higher priority substances. The court ultimately concluded that the FDA’s GRAS Rule does not highlight a constitutional issue, nor does it violate the FDCA or APA.
Tags: E15, ethanol, GRAS, Food Additives, trusts, Estate Planning, Zero Emissions, Supply Chain, Environment, FDA, FDCA, APA, Clean Air Act
Written by Ellen Essman and Peggy Hall
The holidays are almost here, 2019 is almost over, but the world of ag law isn’t taking a break. From cannabidiol, to Ohio bills on water quality and wind power, to a cage-free egg law in Michigan, here’s the latest roundup of agricultural law news you may want to know:
FDA warns companies about cannabidiol products. If you’ve been following the hemp saga unfold over the past year, you know that the Food and Drug Administration (FDA) has been contemplating what to do with cannabidiol, or CBD from derived hemp products. In addition to manufacturing standards, FDA has also considered how CBD products are marketed and labeled. Although FDA has issued no official rules on CBD marketing and labeling, the agency has warned a number of companies that their marketing of CBD violates the Federal Food, Drug, and Cosmetic Act (FD&C Act). On November 25, FDA sent warning letters to 15 companies. FDA asserts that the companies “are using product webpages, online stores and social media to market CBD products in interstate commerce in ways that violate the FD&C Act.” In particular, FDA is apprehensive about those companies who market CBD products in ways that claim they can treat diseases or be used therapeutically for humans and animals. Since CBD has not been approved by FDA or found safe for these uses, companies cannot make such claims. You can see FDA’s news release for more information and for the list of companies.
It won’t be as difficult for financial institutions to serve hemp related businesses. Federal agencies and state bank regulators released a statement clarifying what is required of banks when hemp businesses are customers. Since hemp was removed from the federal list of controlled substances, banks no longer have to file a Suspicious Activity Report on every customer involved in growth or cultivation of hemp just because they grow hemp. This action will make it easier for those legally cultivating hemp to work with banks and obtain loans for their farms. For more information, the agencies’ press release is available here.
Ohio House considers the Senate’s water quality bill. Ohio’s House Energy & Natural Resources Committee held a hearing on Senate Bill 2 just last week. The bill would implement a Statewide Watershed and Planning Program through the Ohio Department of Agriculture (ODA). Under the bill, ODA would be charged with categorizing watersheds in Ohio and appointing coordinators for each of the watersheds. ODA and the coordinators would work closely with soil and water conservation districts to manage watersheds. Ag groups such as the Sheep Improvement Association, the Cattleman’s Association, the Pork Council, the Dairy Producers Association, and the Poultry Association testified in favor of SB 2.
Ohio House committee debates wind bill. The House Energy & Natural Resources Committee was busy last week—in addition to SB 2, they also discussed House Bill 401. In the simplest terms, if passed, HB 401 would allow townships to hold a referendum on approved wind projects. This means that with a vote, townships could overturn decisions made by the Ohio Power and Siting Board (OPSB). In the committee hearing, wind industry representatives argued that such a referendum would be harmful, since it would overturn OPSB decisions after companies have already spent a great deal of money to be approved by the Board. They also argued that the bill singles out the wind industry and does not allow referendums on other energy projects. Republican committee members signaled that they may be willing to revise the language of HB 401 to allow a referendum before OPSB decisions.
Iowa’s ag-gag law is paused. In May, we wrote about Iowa’s new ag-gag law, which was the state’s second attempt to ban undercover whistleblowers and journalists from secretly filming or recording at livestock production facilities. In response, numerous animal rights groups sued the state, claiming that the law unconstitutionally prevents their speech based on content and viewpoint. On December 2, the U.S. District Court for the Southern District of Iowa issued a preliminary injunction, which means that the state will not be able to enforce the ag-gag law while the lawsuit against it is being considered. The preliminary injunction can be found here.
Cage free eggs coming to Michigan in 2024. Michigan lawmakers recently passed Senate Bill 174, which, among other things, will require that all birds producing eggs both in and out of the state be housed in “cage-free” facilities by 2024. The cage-free facilities will have to allow hens to roam unrestricted with the exception of exterior walls, and some types of fencing to contain the birds. In an indoor facility, the farmer must be able to stand in the hens’ usable floor space while caring for them. In addition, the facilities must have enrichments for hens such as scratch areas, perches, nest boxes, and dust bathing areas. Michigan joins California, Oregon, Rhode Island, and Washington in banning non-cage-free eggs. Note that Michigan’s law will apply to Ohio egg producers who sell eggs to buyers in Michigan.
Case watch: hearing set in Lake Erie Bill of Rights case. The court has set a January 28, 2020 hearing date for the slow moving federal lawsuit challenging the Lake Erie Bill of Rights (LEBOR) enacted by Toledo voters in February. The hearing will likely focus on several motions to dismiss the case filed by the parties on both sides of the controversy, but Judge Zouhary indicated that he’ll set the agenda for the hearing prior to its date. Drewes Farm Partnership filed the federal lawsuit against the City of Toledo in February, claiming that LEBOR is unconstitutional and violates several Ohio laws. The State of Ohio was permitted to join the farm as plaintiffs in the case, but the court denied motions by Toledoans for Safe Water and the Lake Erie Ecosystem to join as defendants in the case. For more on the LEBOR lawsuit, refer to this post and this post. For our explanation of LEBOR, see this bulletin.
Stay tuned to the Ohio Ag Law Blog as we continue to track these and other developments in agricultural law through the holidays and beyond.
Tags: hemp, CBD, FDA, LEBOR, Lake Erie, alternative energy, wind energy, water quality
Are you perplexed by what “Sell By,” “Use By,” “Best If Used By,” and similar terms mean on your packaged foods? If the date has passed, should throw the food out, or take your chances with it? You are not alone in wondering about the meaning of dates and other terms printed on our food packages. Under most circumstances, food manufacturers are not required to include date labels and terms on packaged foods, so when they do include such labels, there are no official guidelines to follow. As a result, we have the current voluntary patchwork of various confusing terms. On May 23, 2019, the U.S. Food & Drug Administration (FDA) took a step toward alleviating the uncertainty surrounding date labels. FDA released a letter addressed to the “Food Industry” at large. In the letter, FDA said that it “strongly supports” the use of the term “Best If Used By” when the “date is simply related to optimal quality—not safety.”
In its letter, FDA cites confusion over terms on date labels as a contributor to food waste in the United States. People don’t know what the dates mean, or they think the date means the food is expired or not safe to eat, and so they throw the food out. The range of different phrases on date labels only adds to the confusion. FDA says around 20% of food waste by consumers can be attributed to unclear date labels.
As was mentioned above, the food industry is largely on their own in terms of choosing what kind of date language to include on their packaged food labels. (One exception is infant formula, which FDA requires to have a date label reading “Use By.”) Consequently, many of the date labels on packaged foods are not indicative of when a food is safe to eat. Instead, FDA says that “quality dates indicate the food manufacturer’s estimate of how long a product will retain its best quality. If stored properly, a food product should be safe, wholesome, and of good quality after the quality date.” Therefore, FDA supports using “Best if Used By” as the standard to communicate to consumers when a packaged food product “will be at its best flavor and quality,” which does not necessarily mean that the food is unsafe to eat after that date.
Not a binding law or regulation
FDA’s recommendation for the food industry to use “Best if Used By” on packaged food when including a date label is just that: a recommendation. Food companies are not required to use the terminology on their packaged foods; with the exception of infant formula, no date label is required by federal law or regulation. However, FDA “strongly supports industry’s voluntary…efforts” to use “Best if Used By” to communicate food quality to consumers. Therefore, the letter to the Food Industry is not a mandate by FDA, but an endorsement and strong suggestion that the industry use “Best if Used By” to indicate food quality.
Will “Use By” be the next recommended standard?
In its letter, FDA touches on another recommendation by grocery and food associations, but declines to endorse it. Grocery and food groups advocate for the use of the term “Use By” on date labels on perishable foods that may be unsafe to eat after the printed date. While FDA is not currently recommending the use of “Use By,” it is important to note that industry groups support using the term in this way. Perhaps after further safety studies, “Use By” will be the next recommendation on the horizon for FDA.
What does FDA hope to accomplish with this recommendation?
While FDA is not requiring the food industry to use the “Best if Used By” date label, the purpose of its recommendation is to encourage the majority of the industry to adopt the language as a standard. The hope is, that as “Best if Used By” is more widely used and the public becomes more educated on its meaning, the amount of confusion, and accordingly, the amount of food waste, will greatly decrease. To learn more about FDA’s decision to endorse “Best if Used By,” see their article here. For more information about food product dating, see USDA’s page here.
Tags: food, FDA, Food Labeling