herd share agreements
It's time for another roundup of legal questions we've been receiving in the Agricultural & Resource Law Program. Our sampling this month includes registering a business, starting a butchery, noxious weed liability in a farm lease situation, promoting local craft beer at a farmers market, herd share agreements, and agritourism's exemption from zoning. Read on to hear the answers to these questions from across the state.
I want to name my farm business but am not an LLC or corporation. Do I have to register the name I want to use for the business?
Yes, if your business name won’t be your personal name and even if the business is not a formally organized entity such as an LLC. You must register the business with the Ohio Secretary of State. First, make sure the name you want to use is not already registered by another business. Check the name availability using the Secretary of State’s business name search tool at https://businesssearch.ohiosos.gov/. If the name is available, register the name with the Secretary of State using the form at https://www.sos.state.oh.us/businesses/filing-forms--fee-schedule/#name. If there is already a business registered with the name you want to use, you might be able to register a similar name if your proposed name is “distinguishable” from the registered name. The Secretary of State reviews names to make sure they are not already registered and are distinguishable from similar names. See the Guide to Name Availability page for examples of when names are or are not distinguishable from one another.
I am interested in starting a small butchery. What resources and information are helpful for beginning this endeavor?
There are legal issues associated with beginning a meat processing operation, and there are also feasibility issues to first consider. A good resource for initial considerations to make for starting a meat processing business is this toolkit from OSU at https://meatsci.osu.edu/programs/meat-processing-business-toolkit. A similar resource that targets niche meat marketers is at https://www.nichemeatprocessing.org/get-started/. On the legal side, requirements vary depending on whether you will only process meat as a custom operator or fully inspected operator, and if you also want to sell the meat through your own meat market. The Ohio Department of Agriculture’s Division of Meat Inspection has licensing information for different types of processors here: https://agri.ohio.gov/divisions/meat-inspection/home. If you also want to have a retail meat market, you’ll need a retail food establishment (RFE) license from your local health department. To help you with that process, it’s likely that your health department will have a food facility plan review resource like this one from the Putnam County Health Department.
Is Ohio’s noxious weeds law enforceable against the tenant operator of my farm, or just against me as the landowner?
Ohio’s noxious weed law states that the township trustees, upon receiving written information that noxious weeds are on land in their township, must notify the “owner, lessee, agent, or tenant having charge of the land.” This language means that the trustees are to notify a tenant operator if the operator is the one who is in charge of the land where the noxious weeds exist. The law then requires the notified party –which should be the tenant operator—to cut or destroy the noxious weeds within five days or show why there is no need to do so. The concern with a rental situation like yours is that if the tenant does not destroy the weeds in five days, the law requires the township to hire someone to do so and assess the costs of removal as a lien on the land. This puts you as the landowner at risk of financial responsibility for the lien and would require you to seek recourse against the tenant operator if you want to recover those costs. Another option is to take care of removing the noxious weeds yourself, but that could possibly expose you to a claim of crop damages from the tenant operator. A written farm lease can address this situation by clearing shifting the responsibility for noxious weeds in the crop to the tenant operator and stating how to deal with crop damages if the landowner must step in and destroy the noxious weeds.
Can we promote local craft beers at our farmers market?
Ohio established a new “F-11” permit in H.B. 674 last year. The F-11 is a temporary permit that allows a qualifying non-profit organization to organize and conduct an event that introduces, showcases, or promotes Ohio craft beers that are sold at the event. There are restrictions on how long the event can last, how much beer can be sold, who can participate in the event, and requirements that food must also be sold at the event. The permit is $60 per day for up to 3 days. Learn more about the permit on the Department of Commerce website at https://com.ohio.gov/divisions-and-programs/liquor-control/new-permit-info/guides-and-resources/permit-class-types.
Can a goat herdsman legally provide goat milk through a herd share agreement program?
Herd share agreements raise the raw milk controversy and whether it’s legal or safe to sell or consume raw milk. Ohio statutory law does clearly prohibit the sales of raw milk to an “ultimate consumer” in ORC 971.04, on the basis that raw milk poses a food safety risk to consumers. But the law does not prohibit animal owners from consuming raw milk from their own animals. A herd share agreement sells ownership in an animal, rather than selling the raw milk from the animal. Under the agreement, a person who pays the producer for a share of ownership in the animal may take their share of milk from the animal. The Ohio Department of Agriculture challenged the use of herd share agreements as illegal in the 2006 case of Schitmeyer v. ODA, but the court did not uphold the ODA’s attempt to revoke the license of the dairy that was using herd share agreements. As a result, it appears that the herd share agreement approach for raw milk sales is currently legally acceptable. But many still claim that raw milk consumption is risky because the lack of pasteurization can allow harmful bacteria to exist in the milk.
Can the township prohibit me from having a farm animal petting zoo on my hay farm?
It depends whether you qualify for the “agritourism exemption” granted in Ohio law. The agritourism exemption states that a county or township can’t use its zoning authority to prohibit “agritourism,” although it may have same zoning regulations that affect agritourism buildings, parking lots, and access to and from the property. “Agritourism” is an agriculturally related entertainment, recreational, cultural, educational or historical activity that takes place on a working farm where a certain amount of commercial agricultural production is also taking place. If you have more than ten acres in commercial production, like growing and selling your alfalfa, or you have less than ten acres but averaged more than $2,500 in gross sales from your alfalfa, you qualify under the agritourism exemption and the township zoning authorities cannot prohibit you from having your petting zoo. However, any zoning regulations the township has for ingress and egress on your property, buildings used primarily for your petting zoo, or necessary parking areas would apply to your petting zoo activity. If you don't qualify as "agritourism," the township zoning regulations could apply to the petting zoo activity, and you must determine whether a petting zoo is a permitted use according to your zoning district, which could depend upon whether or not you want to operate the petting zoo as a commercial business.