Redefining "farming" and "agricultural production"

Changes in the structure of the agricultural industry create challenges for courts faced with interpreting terms such as “farming” and “agricultural production.” As previously discussed, vertical integration and specialization have rendered the meanings of “farming” and “agricultural production” ambiguous.


Courts have used a variety of approaches to interpret the meanings of these ambiguous terms:

1. Deny that these terms are ambiguous. Ascertain the “clear” meaning of the terms “farming” and “agricultural production” today. Look at current dictionary definitions of the terms, evidence of the nature of agricultural production today, and recent court cases defining the terms. See, e.g., Farmegg Products, Inc. v. Humboldt County, 190 N.W.2d 454 (Iowa 1971) (dissenting opinion).


2. Deny that these terms are ambiguous. Ascertain the “clear” meaning of the terms “farming” and “agricultural production” at the time that the statute was written. Look at contemporaneous dictionary definitions of the terms and evidence of the nature of agricultural production at the time that the statute was written. See, e.g., Farmegg, (majority opinion).


3. Resolve the issue of how “agricultural production” should be defined by considering how the original authors of the statute would have resolved the issue, had they anticipated the changes that have taken place in the agricultural industry. Consider the mischief that the authors were trying to address by passing the statute and the political and social climate at the time that the statute was enacted (static interpretation approach). See, e.g., National Broiler Marketing Association v. United States, 436 U.S. 816 (1978) (majority opinion).


4. Resolve the issue of how “agricultural production” should be defined in a way that is fair and workable today and consistent with the statute’s purpose (dynamic interpretation approach). See, e.g., National Broiler, 436 U.S. 816 (dissenting opinion).

Farmegg Products, Inc. v. Humboldt County, 190 N.W.2d 454 (Iowa 1971), and National Broiler Marketing Association v. United States, 436 U.S. 816 (1978), illustrate approaches that courts have taken to interpret the meanings of “agricultural purposes” in the first instance and “agricultural production” in the second instance. Both Farmegg and National Broiler were decided in the 1970s, when the poultry industry was first becoming vertically integrated. In Farmegg, the Iowa Supreme Court was asked to interpret the breadth of an agricultural exemption from state and county zoning regulations. In National Broiler, the Supreme Court of the United States was asked to determine the reach of an agricultural exemption from federal antitrust regulations.

In the coming days, I will describe and evaluate the statutory interpretation approaches employed in Farmegg and National Broiler.

Whose Farm Bill is It?

Over 10 years ago, fellow Ag Law contributor Jim Chen asked, "Why, despite the triumph of the consumer welfare model in virtually every other facet of American economic thought, does producer welfare continue to dominate agricultural policy in the United States?" (Jim Chen, The American Ideology, 48 Vand. L. Rev. 809, 815 (1995)).

That same sentiment was noted a week or two ago, by yet another Ag-law contributor, as Susan Schneider pointed out in her post on grass-fed beef, that the controversy surrounding the "grass fed" label. Professor Schneider noted, "[c]onsumers may interpret [the USDA's labeling] responsibility as something that the government does for their benefit, the USDA’s mission to help America's farmers and ranchers is often at issue, and labeling decisions may reflect a balancing of farmer vs. farmer interests."

Indeed, the Secretary of Agriculture apparently sees the "organic" label as one that benefits the industry, not the consumer: “‘The organic label is a marketing tool,” Secretary [of Agriculture] Glickman said. ‘It is not a statement about food safety. Nor is ‘organic’ a value judgment about nutrition or quality.’” (quoted in Michael Pollan, Omnivore's Dilemma: A Natural History of Four Meals, at 179).

Perhaps it is time to raise the question again: Who is benefiting, these days from agriculture policies and in particular the Farm Bill. Although I'm not sure that the answer has changed much, perhaps change is afoot. Two hints of such a possibility: The Nation's food issue, encouraging its readers to make their voices heard before the Farm Bill is signed again (including an essay by Omnivore's Dilemma author Pollan), an editorial series in the Minneapolis Star Tribune on farm policy. The Star Tribune (or Strib as it is affectionately know to twin city residents) encouraged its readers to pay attention to the farm bill. The focus of the Strib's editorial series was the environmental impact of farming. Minnesota's Farm Bureau president responded with a letter to the editor, in which he argued: "No one knows our land, our environment and wants to preserve it more than those of us who live and work on it every day."

Changes in the Structure of the Agricultural Industry Create Interpretative Challenges for Courts

The structure of the agricultural industry has changed substantially since the 1920s and 1930s, when many statutes regulating agriculture were enacted. See, e.g., Packers and Stockyards Act of 1921, 7 U.S.C. §§ 181 et seq.; Capper-Volstead Act of 1922, 7 U.S.C. §§ 291-292; the agricultural exemption to the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. §§ 201-219. Many meat processors and packers have gained control of agricultural production, either by acquiring ownership of production facilities or by entering into production contracts with farmers. This trend is referred to as “vertical integration.” The egg production sector was the first sector to become vertically integrated. Within the past few decades, the broiler chicken and hog sectors have been following suit.

Vertical integration of egg production occurred primarily via egg processors acquiring ownership of egg production facilities—rather than entering into production contracts with farmers/independent contractors. In contrast, vertical integration of hog and pig farms has been occurring primarily via processors and packers entering into production contracts with farmers/independent contractors.

It is important to note that vertical integration has not been occurring in the production of dairy cows, beef cows, or crops. Presumably packers and processors do not believe that becoming involved in the production of these agricultural products would be economically profitable.

Between 1974 and 2002, the number of hog farms engaged in contract farming increased by 2,764%. See USDA National Agricultural Statistic Service, 2002 Census of Agriculture (2002), U.S. Department of Commerce, 1974 Census of Agriculture (1977). By 2002, 13.1% of all hog farms had entered into production contracts with packers or processors, and 50.1% of all hogs produced were being produced under contract farming arrangements. See USDA National Agricultural Statistic Service, 2002 Census of Agriculture (2002).

Table 1

Egg chicken farms, broiler chicken farms, and hog farms that entered production contracts with meat processors and packers in 1974 and in 2002.

Farms with production contracts	1974	2002	Δ% from 1974 to 2002
Egg farms	2,799 (NA)	3,408 3.5%	+22%
Broiler and other meat-type chicken farms	7,741 22.5%	20,778 64.9%	+168%
Hog and pig farms	362 0.1%	10,370 13.1%	+2,764%

Source: USDA National Agricultural Statistic Service, 2002 Census of Agriculture (2002), U.S. Department of Commerce, 1974 Census of Agriculture (1977).

In addition to an increase in vertical integration, the agricultural industry has undergone an increase in specialization. In the 1920s and 1930s, many farms produced a mixture of crops and livestock. Furthermore, 1920s and 1930s farms typically produced many agricultural inputs, such as feed, young livestock, manure, and seed:

By 1933…the farm and the farm family continued to provide most of the inputs employed on the farm. This situation changed during the period 1933-1970; farmers turned increasingly to the market for their inputs.

Willard W. Cochrane, The Technological Revolution: 1933-1970, in The Development of American Agriculture: A Historical Analysis 129 (2nd ed., 1993).

Today, livestock farms generally specialize on producing a single product (e.g. hogs). It is not uncommon for livestock farms to specialize even further, raising hogs from birth to wean or chicks from hatching to 20 weeks. Farms also specialize on agricultural production rather than the provision of inputs. The provision of inputs is left to the burgeoning input manufacturing sector.

Changes in the structure of the agricultural industry have rendered the meaning of terms such as “farming” and “agricultural production” ambiguous. Vertical integration has blurred the line that once existed between agricultural production on one hand and packing and processing on the other. Increased specialization within the agricultural industry has made it difficult to distinguish between the production of inputs and the production of agricultural products.

Changes in the structure of the agricultural industry have also made it difficult to define the term “farmer.” In the 1920s and 1930s, the meaning of “farmer” was clear. A “farmer” was a person who lived on the land and who owned, managed, and provided labor on a farm. Today, the meaning of “farmer” is not at all clear. Many persons who identify themselves as “farmers” do not own land or livestock and make few management decisions about how the farms they work on operate. It is unclear whether the defining characteristic of a “farmer” is that a person manages a farm, owns a farm, feels a connection to the land or animals on a farm, provides farm labor, or some combination of these.

In the next few days, I will evaluate approaches that courts have used to interpret ambiguous terms such as “farmer,” “farming,” and “agricultural production.”

Ag Law Digest

One helpful resource in the field of agricultural law is the Agricultural Law Digest. Access requires a subscription, but contact the Agricultural Law Press if you would like to peruse a sample or a recent edition, or send an e-mail to Robert Achenbach at robert@agrilawpress.com.

Introducing Amy Broadmoore

My name is Amy Broadmoore, and I am a 3rd year law student at the University of Minnesota. I have a M.S. degree in Ecology from the University of Minnesota and a B.A. degree in Biology from Grinnell College. After graduating from law school, I plan to work in the areas of agricultural and environmental law.

This semester I will be studying agricultural law under the direction of Professor Jim Chen. I plan to post essays and comments, inspired by the material that I read for this independent study course. The essays and comments will cover a variety of agricultural law topics including federal price support programs, farm business planning, antitrust issues in agriculture, environmental regulation of agriculture, agricultural zoning, and agricultural labor law.

Agricultural Law announces three additions to its team

Agricultural Law is proud to announce a major expansion in its team. Three new writers -- two permanent contributors and one guest -- have joined this weblog:

Rebecca M. Bratspies is an associate professor at the CUNY School of Law. She is the coauthor of Transboundary Harm in International Law: Lessons from the Trail Smelter Arbitration. Professor Bratspies brings her expertise on aquaculture and the regulation of genetically modified organisms to this forum.

Drew L. Kershen is the Earl Sneed Centennial Professor of Law at the University of Oklahoma College of Law. Among many honors accumulated during a long career in agricultural law, Professor Kershen is a past president of the American Agricultural Law Association. His recent research focuses on the use and nonuse of agricultural biotechnology.

Amy Broadmoore is a third-year law student at the University of Minnesota. She will post her observations on a wide range of issues in contemporary agricultural law.

Please join Agricultural Law in welcoming Rebecca Bratspies, Drew Kershen, and Amy Broadmoore.

Interesting Conversation on Vertical Integration

Over at the Center for Rural Affairs, an interesting post decries Smithfield Foods' acquisition of Premium Standard Farms.

Mentioning the Wal-Mart effect, despite its rhetorical value, interestingly highlights the role of consumers and retailers in farm policymaking (specifically, the efforts of saving family farms). As I understand it, large retailers collect and concentrate consumer demand for a wide range of food at low prices. And they do this by selling large volumes of goods, including food, at the lowest price they can. That effort places pressure on processors who want to utilize these retail outlets. That pressure can result in increased production volume and the acquisition of some of the subsidiary inputs as a means of controlling production costs. This, in turn, pushes out some small production efforts or pushes some producers into production contracting that in turn exerts pressure on them to contain costs, which could mean an expanded operation.

If one makes the normative judgment that all of this is bad (as the post does, and for which I could think of various arguments that dispute or champion that judgment), who is to blame?

The blame game is fun to some, and it is easy to point the finger at antitrust enforcement, large retailers, and large processors. But I think rooting out the cause of the problem is difficult because some of the blame may belong to even larger players like the nature of our economic system and consumer power. For example, isn't the very economic system in which we operate supposed to encourage efficiency? And isn't this system a model of pursuing economic efficiency? I suppose the demand side of the market for producers has become more concentrated, but can we consider that problem in isolation? That is, aren't processors feeling the same pressures from retailers? And, if so, why are retailers so powerful? Isn't it because we utilize them when we make the ultimate choice of how to allocate our income? And, if so, does the ultimate problem lie in the choices consumers make? Should consumers be so empowered, or should we overcome their will with legislation that makes choices for them? If consumers should make the choice, is the real problem here that consumers aren't willing to value family-farm support when they make food choices? Do they need more opportunities to allow real choices? Would they make the pro-family-farm choice if they had enough information about how their choices affect family farms? Professor Hamilton may be on to something with his notion of Food Democracy.

Externalities, of course, may take a hit as firms seek to push off whatever costs it can. Thus, as the post mentions, vertical integration may exacerbate the environmental harms that agricultural production causes. But this could happen in the absence of integration [though the on-site concentration of production is problematic in the livestock sector and that concentration is due, in part, to vertical integration.] So, to bring environmental externalities to bear on the subject in a way that supports smaller production firms and family farms, one needs to make an effort to distinguish such firms from integrated ones in terms of how the smaller would be more likely to protect the environment. That subject is difficult, and beyond the scope of this post, but the question looms.

Commodity Certificates and Transparent Government

As I wallow in the commodity title of the 2002 Farm Bill and cover those materials with my students, we come to commodity certificates. And I am reminded of how government really works.

The basic point of the following discussion is to explain one instance in which government has overridden one of the payment limitations of the farm bill with a mechanism that did not expose the underlying policy to debate and did not expose the government to criticism. The post is longer than I'd anticipated, but I think the mechanical complexity of the farm program's loan structure and Congress's commodity-certificate solution nicely illustrate how transparent government action can be.

First, some background.

In the 1996 Farm Bill, Congress set up payment limitations for, among other things, marketing assistance loans. These loans are non-recourse loans, they are secured by the producer's crop, and they allow producers to borrow money at a particular loan rate (stated in terms of the commodity's price). During the loan, or when the loan matures nine or ten months after harvest, producers have the choice of either paying the loan off at current market price levels (i.e., the "posted county price"), forfeiting the crop to the government, or paying the loan off at the loan rate. If market prices are high, producers will pay off at the loan rate and take their grain into the market. If market prices are low, producers will pay off the loan at the market level (the posted county price) and hold the grain hoping for the market to rise, or sell it immediately in the market, content with the gain they experienced as a result of paying less to retire the loan than they originally borrowed.

Under the current regime, the forfeiture option really only comes into play as a result of the payment limitation. The payment limitation, in turn, only comes into play when market forces are low. That is, if the producer pays off the loan at a low market rate--a rate less than the original borrowing rate, she experiences a gain (the difference between the borrowed funds and the funds repaid to retire the loan). That gain cannot exceed $75k per person per year. But when the producer approaches the maximum level of marketing loan gain, she still has a money-making option. She can forfeit the grain to the government. So, if the market is low, and the producer has already gotten $75k worth of marketing loan gain from the government, then she will choose to forfeit the grain to the government. Notice that she still experiences economic gain. That is, she forfeits collateral that was insufficient to cover the amount borrowed. But that economic gain does not count toward the producer's gains for purposes of payment limitations. So the payment limitation has the effect of pushing more grain into the government's hands when market prices are low.

Government stocks of grains pose problems. If producers forfeit a bunch of collateral to the government under the loan program, the government is left holding the bag. It can distribute some of that through food programs; it can try to dump some of it into foreign markets (though that poses trade problems); or it can hold it and wait for the market to rise. Of course the anticipation of government sellers exerts some degree of downward pressure on the market. And when the government enters the market and sells large quantities of commodities, the increased supply lowers prices. Those lower prices, in turn, could cause more forfeitures. So the government doesn't want to amass big stocks of grain.

Enter, the Commodity Certificate.

In the late 90's, market prices went in the tank, and the government was looking at amassing big stocks of grain under the marketing assistance loan program because the payment limitation was in play. What did Congress do? Did it debate new payment limitation levels? No. Rather, it created "commodity certificates." Using these figurative instruments, producers were allowed to, in effect, retire the loan and redeem the grain at low market levels, retain the gain from the loaned funds, and not experience any gain that would count toward the payment limitation.

Here's what happens (in theory—all of this is actually accomplished through a set of bookkeeping entries):

Producer takes out a loan from the government for $1.98/bu. on 100,000 bu. of corn. He gets $198,000 from the government and posts the 100,000 bu. of corn as collateral. When the loan becomes due (or sometime during the loan term), the posted county price is $1.75. If he had room under his payment limitation, he would pay off the loan at the posted county price, which would mean he would pay $175,000, take his grain, and be ahead $23,000 (the difference between the original loan funds and the amount he actually paid back). But if he has reached his payment limitation (already collected $75,000 from the government in other gains), then he will forfeit the grain. That is, he will walk away with only the $23,000 (the difference between the original loan funds and the value of the grain he forfeits to the government). But the government doesn't want the grain. Thus, the commodity-certificate two step comes in.

I conceptualize this dance as having two steps, or transactions. Picture our farmer, after having borrowed $198,000 from the government and posting 100k bu. of corn as collateral. Here's how the dance works. First, the farmer retires the outstanding loan by paying it off at the original loan rate (actually interest is involved too, but lets keep it simple), and thereby has his grain unencumbered by the government's interest. But he has gotten no subsidy from the government, and is holding grain worth $175,000 ($1.75 corn). So the government buys the grain from him with the funds he has just given it. That is, it pays $198,000 (+ interest) for the grain. This completes what I call the first step: The farmer retired the loan by paying the government back, and the government used that payment to buy the grain from the farmer.

At this point, the farmer is pretty happy. It is as if he has forfeited the grain (or sold it to a seller that buys at greater-than-market prices). But the government doesn't want the grain. This is where the commodity certificate comes in--the second step. The farmer next buys a commodity certificate from the government at the market level. Thus, the farmer pays the government $175,000 for a certificate for 100,000 bu. of corn. Then the farmer redeems that certificate for the grain that the government has been holding. In the end, the farmer has experienced the same gain as he would have experienced had he been allowed to pay the loan off at the lower market price (i.e., as if there were no payment limitation).

Transparency?

To recap: the farmer got $198,000 from the government when he took out the loan. Then he paid the government $198,000 (+ interest), and the government paid him $198,000 (+ interest) for the grain. Then the farmer paid the government $175,000 for a commodity certificate. And the government gave him 100,000 bu. of corn for the commodity certificate. So what is the farmer left with? What is the economic net? It is the exact same result as if the farmer had walked in and paid off the loan at the market rate: $23,000 worth of gain and 100,000 bu. of corn to sell in the market. But none of that gain counts toward the payment limitation, and the government is not saddled with the grain.

So it's a win-win right? For the farmer and for those who worry about government stocks, yes. Indeed, I've heard it said that this program saves the government money. So it may indeed be a win-win. But what about Sue Taxpayer who wants to know about what her government is doing. Do you think she understands that Congress, through this program (which remains in force in the 2002 Farm Bill), effectively removed the payment limitations on marketing loan gains? Would she like to hear Congress tell her why $75,000 in government aid is not enough for a producer who is participating in the marketing assistance loan program? I think she would. And could such a debate bring deeper questions to light? I think so.

Of course, the answer to the is-$75k-enough question it is difficult. And the way I frame that question reflects an interesting aspect of payment limitations--they bring large numbers to light that, when considered by the large majority of would-be voters, seem like entirely too much of a government handout. But with capital-intensive industries like agriculture (which may or may not be something that our farm policy wants to encourage), the electorate's knee-jerk frame of reference--individual earnings--may not be accurate. Of course, that is no reason to shield the issue from debate. Indeed, it may one very good reason for debate.

Another interesting aspect of the problem is that marketing loans, even without commodity certificates, aren't necessarily limited to $75,000 of economic gain. Farmers experience more than $75,000 of gain under marketing loans when they forfeit the grain to the government after reaching the $75,000 limit. And the gain from forfeitures doesn't count toward the payment limitation. So maybe we simply aren't all that concerned with a $75,000 payment limitation. Maybe, then, from its inception, the payment limitation wasn't really geared at limiting payment.

But one may posit (from the very existence of something called a payment limitation) that the $75,000 payment limitation should act as a limit on economic gain. And there are arguments to the contrary--maybe $75k is not enough. But excluding some gains from the mix (primarily through commodity certificates) allows the payment-limitations proponent to get the limit, while at the same time insulating producers from the real effects of the limitation. And when a confusing mechanism like commodity certificates is used to do it, one has to wonder about the transparency of policymaking.

When payment limitations come up in the '07 bill, and they will, it will be interesting to see if Congress takes up the issue. Pending bills to repeal the commodity certificate authority have been introduced over the past couple of years, but they haven't seen success. And I haven't seen anyone mention them in the recent debate on the farm bill. But Congress knows about the problem. The issue was identified for Congress in the 2003 Commission on Payment Limitations report. If commodity certificates do fall to political pressure, it will be interesting to see if the other side can garner support for higher payment limits on true economic gain. And, in the course of that argument, I hope we can get to deeper questions about how much producers need and what our policy should encourage. But, one step at a time.

Many thanks to Professor Kelley for conversing with me about this interesting aspect of farm policy.

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Rhymes with Corn

How's this sound:

Oklahoma, where the wind comes sweepin' down the plain
And the wavin' corn can sure smell sweet
When the wind comes right behind the rain.

I guess we need something to rhyme with corn? Mourn? Forlorn? Born?

Why re-word the words to this popular song? Because corn is king, as they say.

Michael Pollan, in his book, Omnivore's Dilemma: A Natural History of Four Meals, emphasizes the dominance (and growing dominance) of corn. Alexei Barrionuevo has also picked up on the growing trend, as he reports here, in the New York Times. As reported by Barrionuevo (using data from AgResrouces and the Department of Agriculture) the percent increase in acres of corn planted is remarkable. Farmers in Kansas, for example, planted 134% more corn in 2006 than in 1986, and in that same time, planted 18% less wheat. Nebraska, home to Ag-Law contributor, Anthony Schultz, saw an increase of 94 percent, while in North Dakota, a truly astonishing increase of 700% is reported.

Why the changes? A confluence of reasons, including changing consumer tastes, farm policies, and agronomy advances that make it possible to grow corn where it has failed before. One important reason, of course, is that farmers feel they will be better off economically growing corn. As Barrionuevo reports, that's doubtless true for some farmers. But why is it true?

Michael Pollan cites evidence in Omnivore's Dilemma: A Natural History of Four Meals, that it costs nearly a full dollar more to produce a bushel of corn than a farmer can earn selling it. (Omnivore's Dilemma at 53, citing statistics from Iowa State University). Given that statistic, the impressive increases in acres of corn planted is even more astounding.

Future posts will explore the "why" behind the ability of farmers to continue to grow corn when it costs more to grow than they can earn selling it.

Agricultural Law Conference Opportunities

There are a number of interesting agricultural law conferences this fall. Here are a few highlights.

On September 28 & 29, there will be a wide-ranging legal conference in Billings, Montana called simply, Montana Agriculture: Legal Issues. Montana Governor and rancher Brian Schweitzer will deliver the keynote address, “The Future of Agriculture in Montana.” Conference presentations will include several sessions on water law issues, as well as sessions on The Endangered Species Act, Pesticide Regulation, Hunting and GameManagement, Agriculture in Transition, Farm Credit Issues, and Estate Planning.

The American Agricultural Law Association (AALA) is hosting its Annual Agricultural Law Symposium, October 13-14, 2006 at the Hyatt Regency in Savannah, Georgia. This conference, organized by the AALA's President-elect, Steve Halbrook of Farm Foundation, will include updates on commercial law, environmental law, bankruptcy, and tax law. There also will be sessions on farm and ranch estate taxation, current food law issues, federal farm bill projections, farm land preservation, marketing orders, energy issues, and farm cooperatives. Several special sessions include a panel discussion by regional commissioners of agriculture on l policy issues affecting the southeastern United States, a discussion of the face of agriculture in the 21st Century, and the Second Annual Bock Chair Mini-Symposium on Animal Identification and Traceability in a Global Context.

The American Farmland Trust (AFT) will be hosting, Farming on the Edge: The Next Generation, in conjunction with the Delaware Department of Agriculture November 13-15, 2006, at the Clayton Hall Conference Center in Newark, Delaware.

AFT hopes to bring together rural and urban residents "who care about America’s rural legacy, land use and the future of farming and ranching." The conference promises a discussion of "the next generation of national farm policies, farmland protection programs, community plans, production practices and markets, and farmers themselves." There will be 40 different workshops, welcoming remarks by Delaware’s Governor Ruth Ann Minner and Secretary of Agriculture Michael T. Scuse and key note speakers including Delaware native Michael Ableman, a farmer, educator, writer and photographer, and Gary Hirshberg, CEO of Stonyfield Farm, the world’s largest manufacturer of organic yogurt.

And, particularly relevant to the previous posting on rural life, The Rural Women's Studies Association will hold their annual conference in Lancaster, Pennsylvania from October 5-7, 2006. The RWSA is an international association organized "for the advancement and promotion of farm and rural women's gender studies in historical perspective." Their annual conference brings together academics, members of rural advocacy groups, agricultural extension professionals, and women engaged in farming operations. Professor Emerita Dr. Joan M. Jensen, New Mexico State University, will deliver the keynote address, "Telling Stories, Keeping Secrets." In honor of Mary Neth's contributions to historical scholarship and to the RWSA, several sessions will reflect her influence on the field of rural women's history. As with previous conferences, the past and present of the conference location will be featured. Conference planners note that this year's location, Lancaster County , best known as the home of the "Pennsylvania Dutch," demonstrates in microcosm many of the issues facing rural women, men, and families today.

Anthony Schutz joins Agricultural Law

Agricultural Law is very pleased to welcome Anthony Schutz, assistant professor of law at the University of Nebraska College of Law, to its team of contributors. A Nebraska law graduate, Professor Schutz has just joined his alma mater's faculty. He is a member of a farm family in Elwood, Nebraska. Professor Schutz’s research interests include the often intertwined subjects of agricultural law, environmental and natural resources law, and state and local government.

Please join Agricultural Law in welcoming Anthony Schutz.

Photo credit: © Sheryl Sinkow.

(Organic) Milk for the Masses

Organic milk is often the entry point into organic products. This is especially true for mothers of small children. (For example, it was this little kid's first organic), and it's not just Volvo-driving, power-suit wearing moms who want organic for their kids. So Wal-Mart's aggressive entry into the organic milk market -- marked by its announcement that its rolling out its own brand (reported yesterday in the New York Times) should be good news for some consumers.

It's not all dancing in the Wal-Mart aisles, though. Wal-Mart's supplier is Aurora Organic Dairy, which critics consider a feedlot. Critics argue milk from Aurora is weakening the organic brand by failing to provide adequate access to pasture, feeding grains (rather than allow the ruminents to ruminate) and operating what amount to feedlot operations.

Michael Pollan (The Omnivore's Dilemma) drew attention to the issue of access to pasture, and to daries like Aurora in his response to an "Open Letter" from Whole Foods CEO John Mackey.

Ag-Law will follow this story for our readers.

Salmon Once Again Up the Creek

For nearly two decades, farmers (or "growers" as they are known in California) have battled conservationists over control of the San Joaquin River below Friant Dam near Fresno, California.

The River historically supported significant salmon populations. Since the late 1940s, when the dam became operational, about 60 miles of the river have dried up, to the detriment, of course, of the salmon.

The settlement agreement, announced today by the Natural Resources Defense Council (NRDC), the Friant Water Users Authority (FWUA) and the U.S. Department of the Interior and Commerce sets into action one of the largest river restoration projects in the country. The project will improve the river channel to allow healthy salmon populations, while at the same time ensuring water supply to Friant Division water contractors, who for years have operated under the uncertainty caused by the on-going litigation. According to a press release from the NRDC, the settlement specifically protects water availability for 15,000 small farms.

Paul Pomerleau joins Agricultural Law

Agricultural Law is pleased to announce its newest contributor, Paul Pomerleau. Paul is an expert on agricultural law in Canada, especially Québec, and in the Francophone world at large. He will cover these issues for Agricultural Law.

Paul Pomerleau has been manager of legal and corporate affairs for Nutrinor, a farmer cooperative, since April 2004. He manages legal and environmental risks associated with Nutrinor's activities and is deeply involved in business development. From 1997 to 2004, he was a partner of Cain Lamarre Casgrain Wells in Alma, Québec; from 1991 to 1997, he worked at Beauchamp, Pomerleau in Montréal. His practice specialized in the law of food and agriculture (droit agroalimentaire) and in business law.

Paul is the webmaster of Droit Agricole, a website dedicated to agricultural law in Québec. Paul is also the current president of the Table agroalimentaire du Saguenay-Lac-Saint-Jean, an organization dedicated to the promotion and development of agriculture and the food industry in Québec's Saguenay-Lac-Saint-Jean region.

Please join Agricultural Law and the Jurisdynamics Network in welcoming Paul Pomerleau.

Big chicken

Morgan Holcomb's post on the application of the Humane Slaughter Act to poultry has provoked some interesting commentary. As to the question of why the 1958 legislation neglected specifically to mention poutry, I think there are several things to look for in the legislative history:

1. The contemporary poultry industry as we know it came together rapidly in the second half of the twentieth century. As with so much else, the generation after World War II set the stage. Chickens historically were raised primarily for eggs; poultry was a relatively expensive byproduct of the egg production cycle. See generally National Broiler Marketing Ass'n v. United States, 436 U.S. 816 (1978). The commercial status of veal (a commercially dictated if rather brutal byproduct of dairy production) provides a good basis for comparison.


2. Poultry production is not evenly distributed on a regional basis. In the 50-year period from 1914 to 1964 -- basically the span between the "golden age" of American agriculture, as marked by the legal definition of "parity," and the passage of the Civil Rights Act of 1964 -- the old order in Southern agriculture dominated and distorted agricultural legislation. Rather inconveniently for today's Midwest-dominated pool of specialists in agricultural law, this period includes the New Deal and the initial wave of legislation (including the Humane Slaughter Act) that responded to the rise of contemporary agribusiness.


3. Don't forget that A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935), a classic constitutional case from the New Deal, arose from a dispute over the National Industrial Relations Act's provisions governing poultry slaughter. Schechter's direct impact on the Humane Slaughter Act is probably minimal or nonexistent, but that controversy does serve to illustrate how far poultry productoin had to go in the generation between the Great Depression and the height of the Cold War.


4. Perhaps most gruesome of all to contemplate is the state of biological thinking circa 1958. It would not be terribly difficult, I suspect, to document a prevalent belief among professional biologists, let alone farmers, lobbyists, and legislators, that birds as "less advanced" forms of life did not feel pain on par with mammals. Slaughter protocols are not cheap. At a minimum they are not cost free. It would have been easy to dismiss the idea of slaughter protocols for poultry as simply being too expensive for a not altogether worthy set of farm animals slain for meat, and at that as an afterthought relative to their eggs.

Or perhaps I am merely clucking from the sidelines here at Agricultural Law. I wonder what insights we might gather from the wisdom of crowds -- namely, of course, our audience.

Corn: It's not just for breakfast anymore

The New York Times is doing a great job keeping up with ag reporting these days. The latest, this article: "Redesigning Crops to Harvest Fuel," by Andrew Pollack.

The article reports on the "new mission of crop scientists" to tailor corn and other crops for use in ethanol and other biofuels. As author Pollack points out, corn is not the only crop that can be used to produce ethanol. Scientists are focusing on developing other crops (especially grasses), as well improving corn's performance in ethanol (by designing varieties with higher fermentable starch content).

Defining a canon of rural law

The heavyweight law blog, Prawfsblawg, is undertaking a grand project to define legal canons in a wide range of areas. I've asked my fellow contributors to the Jurisydnamics Network to join me in responding to the Prawfsblawg challenge by defining the canon in areas of interest to us, including agricultural law.

As we embark on this project, though, I wonder whether we might profitably reconsider how we ask the question. In the words of Suzanne Langer, one of the twentieth century's great philosophers on learning, how we pose a question often predisposes its answer. Perhaps it is time to think of a broader canon of rural law rather than strictly agricultural law.

I am taking a cue from the Francophone world. There the term droit rural includes but is not coextensive with agricultural law. The leading agricultural law journal is named La Revue de Droit Rural, and the European Council for Agricultural Law is better known by its French acronymn, CEDR: Comité Européen de Droit Rural.

Within American law, rural law might include the law of public lands, the battery of laws concerning subsidies for rural development (such as reclamation, rural electrification, and rural telephony), certain bodies of natural resources law, and perhaps even Indian law. Rural communities face unique legal challenges that are worthy of focused study and, most important for current purposes, are not adequately addressed within an industry-specific framework directed at an ever diminishing share of rural revenues, rural jobs, and rural culture.

The subject of rural law and its canon so defined might be supple enough, for instance, to embrace the following abstract:

The United States lags behind many other countries in wireless telephony despite its wealth and relatively high rural population. The answer to this conundrum may lie in the United States' commitment to cooperative federalism in the administration of subsidies for rural telephone service. ... Federal mechanisms for subsidizing rural telephony demonstrate the irreconcilable conflict between decentralization and deregulation. Insofar as state regulators are not prepared to complete the transition from traditional public utility regulation, they deserve no deference. Indeed, this article argues that there should be no deference whatsoever to interpretations of law and other exercises of discretion undertaken by state regulators charged with implementing federal telecommunications law.

This, of course, is a paper of mine -- namely, Subsidized Rural Telephony and the Public Interest -- but I feel no shame in suggesting that it addresses a question affecting rural life and public policy. Those objectives, of course, have always lain at the heart of agricultural law. Contemporary law has simply added to the list of tools, and targets, as rural life undergoes ever greater upheaval.

Speaking of Slaughter

The House yesterday (Sept. 7) voted to prohibit the slaughter of horses. The full story was reported by the Associated Press here. The bill now goes to the Senate, where it faces an uncertain future, given the rush to finish work before the end of the session.

Opposition to the bill comes from the White House and a veterinary group, who argue that slaughter is the more humane option, when, for example, owners can no longer care for sick or problem animals.

Who's Watching the Hen (slaughter) House?

The Humane Slaughter Act (7 U.S.C. §§ 1901-1906), passed in 1958, was designed to prevent animal suffering during slaughter. By its terms, the act applies to "cattle, calves, horses, mules, sheep, swine, and other livestock." The Act provides that slaughterhouses must use humane methods, which includes a requirement that animals be rendered insensible to pain prior to slaughter.

The USDA issued a Notice in September of 2005, stating that there is no federal statute governing the humane slaughter of poultry, and recommending that the industry voluntarily adopt measures to improve slaughterhouse conditions.

The Humane Society and several of its members (along with assorted other plaintiffs including John Doe workers from poultry processing plants, and two animal species) took issue with the USDA's reading of federal law, and sued the U.S.D.A. in the Northern District of California (Case file #05-4764).

The Plaintiffs seek declaratory and injunctive relief, arguing that the phrase "and other livestock" is plenty broad to include poultry. The Plaintiffs allege that current slaughter practices are not only inhumane, but they also pose serious risks to consumers--such as an increased risk that a bird not stunned before slaughter will attempt to escape and spread dust and dirt, or inhale fecal matter (obviously not what you want to eat). Plaintiffs also allege these practices increase the risk that slaughterhouse workers will be injured on the job.

Defendants responded with a combined motion to dismiss for failure to state a claim. (Fed. R. Civ. Pro. 12(b)(6)). Defendants raised issues of standing and justiciability.

This week, the Honorable Marilyn Hall Patel permitted the suit to go forward. (The opinion is available on PACER, but you have to be a registered user and pay a fee). Judge Patel found that many of the plaintiffs (at least the human ones, she dismissed the claims of Bison bison and Rangifer tarandus) have standing. She also held the Court has jurisdiction to review the Notice under section 706(2) of the APA. Finally, the Court determined that the plaintiffs have established that the issues are redressible.

Stay tuned for further updates on this interesting case.

What's in a Label -- The "Grass-fed" Controversy

The media has recently discovered the grass-fed meat controversy with a widely circulated AP story by Libby Quaid, AP Food & Farm writer on September 3, Ranchers Decry Grass-Fed Beef Rule Plan.

Some background to this story is in order. Increasingly, farmers are using production claims on their product labels to distinguish their products in the marketplace. USDA’s Agricultural Marketing Service, through its voluntary certification program, attempts to verify the accuracy of some of these claims by setting standards governing the use of USDA verified labels.

While consumers may interpret this responsibility as something that the government does for their benefit, the USDA’s mission to help America's farmers and ranchers is often at issue, and labeling decisions may reflect a balancing of farmer vs. farmer interests. Niche producers want tough rules that distinguish their products. Mainstream producers want lenient rules that allow them to jump on the bandwagon of the latest consumer interest with as little disruption of their traditional practices as possible.

The USDA Grass (Forage) Fed Marketing Claim Standard provides a good example. Grass-fed beef is in big demand. However, while almost all cows start out on pasture as calves, most end up in feed lots for the final months of their life and are fed primarily corn. Grass-fed enthusiasts such as the American Grassfed Association support the use of pasture feeding for the full life of the animal. Traditional cattle producers prefer a flexible standard that would only require some grass, allow other forage, and not require full pasturing.

In May, the USDA published a proposed standard that would require that “grass fed” animals be fed a diet that is mother’s milk or 99 percent grass, legumes and forage. The proposed rule is silent on the pasture issue, and presumably animals could still be raised in feedlots and be considered “grass fed.” Pasture-proponents object to this and to the rule’s broad definition of forage. As of the August 10 deadline for receiving comments, the USDA had received more than 17,000 responses to its proposal.

In a quote in the AP story, William Sessions, associate deputy administrator of the department's livestock and seed program explained his agency’s reluctance to regulate the amount of time that cow spends grazing and raised the issue of weather-stressed pastures . “What we tried to do with this grass-fed claim is make it where anyone in the U.S. that wanted to make this claim could," he said. Perhaps he really didn't mean that exactly the way it sounds . . .

The AP story was picked up by many local papers as well as by the Washington Post, the LA Times, USA Today, and Business Week Online.

School Lunch: Not just mystery meat anymore?

I actually liked school lunch. My favorite was beef stew, it tasted just like my grandma's did (maybe that says too much about Grandma...luckily, she's not online) and was always served with hot rolls. If I was lucky, I could trade my milk for somebody else's roll. I drove a hard bargain in those days. I'm relatively certain those lunches weren't terribly healthy, but they filled us up, and I am darn sure they were cheap. Despite my fond memories, school lunch has been a-changing. These days, kids in many districts can choose from a-la carte options (an all french fry lunch anyone?), and schools are offering star-shaped chicken nuggets. Lunches have become higher in fat and/or sugar, and lower in fiber and nutriants (or maybe we've just starting noticing). And kids, well, they have become fatter. School lunch is under justifiable fire for its role in increasing rates of childhood obesity.

This week's New Yorker offers the latest journalistic exploration of the evils of school lunches. In The Lunchroom Rebellion: Ann Cooper’s bid to improve school food (this link will take you to the table of contents, the article doesn't appear to be available on-line), staff writer Burkhard Bilger focuses on Ann Cooper, and her efforts to reform school lunches in the Berkeley (Calif.) area. Cooper has teamed up with the Chez Panisse Foundation (Alice Waters' place) to bring healthier food to the masses. Predictably, as Bilger reports, kids have revolted against some of the healthier food (pizza loaded with fresh veggies was a remarkable failure, but come on, any parent could have predicted that one). Cooper is also running into budget problems -- though who wouldn't, she's expected to feed kids two meals per day on less than lots of us spend per day on coffees. Nonetheless, Cooper seems to be having some success at both mastering the Byzantine rules of commodity ordering and the National School Lunch Program, and the equally challenging task of just getting the kids to eat it.

A couple weeks ago, the New York Times Magazine ran a similar story. (Anybody else noticed a striking similarity in article topics this summer in these and similar highfaluting mags?) The Times article, "The School-Lunch Test," featured a district in Florida, in which Dr. Arthur Agatston (of South Beach Diet fame) and staff from his foundation are working to reform what kids put down the hatch. Agatston and his crew focus less on local and more on measurable health benefits, but both groups see processed as a dirty-word and both are pushing fresh fruits and vegetables.

These are just two examples of what appears to be a burgeoning national trend. Lisa Belkin (who did the aforementioned NYT's magazine piece) reports that places as far flung as rural Arkansas; Harlem; Santa Monica, Calif.; Atlanta, Ga.; Irvington, N.Y., and Half Moon Bay, Calif., all have some sort of school-lunch reform going on, many of which feature local food, and kids growing their own veggies.

So, a couple of questions: How big will this movement get? How big can it get? And how can we continue to pay for it? (Both articles note that the programs are having a hard time staying on budget, and both are subsidized in part by foundations.) Will this movement be good news for the local farm movement? What does it mean for the commodity distribution program(s)?

Sweet home Sonoma

The rural life does have its aesthetic benefits. The following slideshow consists of photos from Sonoma County, California, by Sebastopol resident Rajesh Desai (be sure to click here if you would rather view this slideshow in its own browser window):