Tuesday, October 03, 2006

Landmarks in Agricultural Law: Farmegg Products v. Humboldt County

Farmegg Products, Inc. v. Humboldt County, 190 N.W.2d 454 (Iowa 1971) illustrates two possible approaches for interpreting the meaning of ambiguous terms such as “farming” and “agricultural production.” The issue in Farmegg was whether Farmegg Products’ proposed land use—raising approximately 80,000 chicks for 22 weeks—was a “use for agricultural purposes” and thereby exempt from state and county zoning regulations. According to past precedent, “use for agricultural purposes” meant “use for agricultural production;” it did not include use for input manufacturing, packing and processing.

It was unclear whether Farmegg Products’ proposed land use was a use for agricultural production for a couple of reasons. First, Farmegg Products’ proposed operation differed from traditional farming operations in size and physical structure; chicks would be raised in cages suspended from the ceilings of two enormous buildings. In 1947, when the Iowa legislature passed legislation exempting “buildings . . . which are primarily adapted . . . for use for agricultural purposes” from all county zoning ordinances, Iowa Code § 335.2, legislators were certainly not envisioning enormous, factory-like facilities like the one proposed by Farmegg Products. Second, the 22-week chicks that Farmegg Products planned to produce were arguably not a final agricultural product but rather an input for an egg-laying operation located at another site.

To determine the meaning of “use for agricultural purposes,” both the majority and dissent in Farmegg looked for the “clear” meaning of the term “agricultural purposes” in dictionary definitions and past precedent. After citing several dictionary definitions of agriculture and farming, the Farmegg majority adopted a definition of agriculture that had been announced by the U.S. Supreme Court in Farmers Reservoir & Irrigation Co. v. McComb, 337 U.S. 755 (1949).

Farmegg adopted the following rule of law from Farmers Reservoir for determining whether a particular activity is “agriculture”:
“Whether a particular type of activity is agricultural depends, in large measure, upon the way in which that activity is organized . . . . The question is whether the activity in the particular case is carried on as part of the agricultural function or is separately organized as an independent productive activity.”
Farmegg, 190 N.W.2d at 458 (citing Farmers Reservoir & Irrig. Co. v. McComb, 337 U.S. 755, 760-61 (1949)).

In Farmers Reservoir, the U.S. Supreme Court had been interpreting the Fair Labor Standards Act. The Farmegg majority assumed that the term agriculture has a single meaning when used in various statutes. The definition of agriculture from Farmers Reservoir did not decide the case in Farmegg. Ultimately, the majority’s decision turned on its own assumptions about what constitutes “ordinary farming operations.” The Farmegg majority held that Farmegg Products’ proposed land use was not a “use for agricultural purposes” because Farmegg Products’ proposed factory-like methods for producing 22-week chicks did not fall within the majority’s understanding of “ordinary farming operations.”

Iowa Judicial Branch Building, Des Moines, Iowa

In contrast, the Farmegg dissent cited dictionary definitions of agriculture and evidence that agricultural production in 1971 included production in very large production facilities. The Farmegg dissent asserted that “agricultural production” means all activities between hatching chicks (i.e. producing inputs) and slaughtering pullets (i.e. packaging or processing agricultural products). Purportedly applying this definition, the Farmegg dissent concluded that Farmegg Products’ proposed land use was a “use for agricultural purposes.” The dissent found that raising 22-week chicks was a step in the production of an agricultural product rather than the production of an input.

Both the majority and dissenting opinions in Farmegg are fundamentally flawed because the authors failed to acknowledge that changes in the structure of the agricultural industry have rendered the meaning of the term “agricultural purposes” ambiguous. Both opinions turn on unexamined policy determinations. The majority opinion is based on a public policy of regulating very large, factory-like agricultural production facilities, so that such facilities do not become nuisances. The dissenting opinion is based on a public policy of promoting expansion of agricultural production facilities, to enable producers to maximize economic efficiency.

It seems important for courts to acknowledge that changes in the agricultural industry have rendered the meanings of terms such as “farming” and “agriculture” ambiguous. Rather than adopt definitions based on unexamined public policy determinations, courts should determine the meanings of these ambiguous terms by considering the statutory contexts in which the terms are used, the legislative history of statutes, past precedent, the purposes of the main statutory provisions at issue, and the purposes of the agricultural exemptions.

Next: Farmegg's fate.