Tuesday, October 16, 2007

No good deed goes unpunished

In 1973, Minnesota passed an anti-corporate farming bill. (Minn. Stat. § 500.24). The purpose of the statute is "to encourage and protect the family farm as a basic economic unit, to insure it as the most socially desirable mode of agricultural production, and to enhance and promote the stability and well-being of rural society in Minnesota and the nuclear family."

Last week, the St. Paul Pioneer Press reported here, that this law might prevent local Co-Op grocery, The Wedge from acquiring organic farm, the Gardens of Eagen (Eagen is a suburb of Minneapolis). The irony of the anti-corporate farming law impacting a natural foods co-op wasn't lost on the Pioneer Press reporter.

Laws similar to Minnesota's have been challenged, generally by agribusiness. Most recently, Nebraska's anti-corporate farming law was struck down as violating the dormant commerce clause. (See Jones v. Gale).

The Jones v. Gale decision is open to criticism--including some by my fellow Ag Law bloggers Samantha Bohrman and Anthony Schutz. Although Minnesota, like Nebraska, is in the Eighth Circuit, Jones v. Gale addressed a different law, and I'm not up to speed on the exact operation of Minnesota's law. It might not suffer from the deficiencies that the Eighth Circuit found in the Nebraska law. It will be interesting to watch how the Wedge, the farm, and the state resolve this quandry. It would be interesting to see if, and how, the law could be interpreted (or maybe finessed) to allow this purchase to go through.


Blogger Anthony Schutz said...

Interestingly enough, Minnesota's provision is very similar to Nebraska's in a crucial respect. That is, it requires that some activities be performed at a particular geographic location: "the farm." In the Jones v. Gale case, the 8th Circuit concluded that such a restriction referred to Nebraska farmland (or, I think, a more specific reference to each non-contiguous tract of land that the operation owns). Minnesota's could be subject to the same construction give its "the farm" language in 500.24(2)(c).

One thing that is odd about Minnesota's ban is that its authorized farm corporation provision does not limit the qualifying activities to "the farm." Rather, it allows the owners to qualify the corporation so long as they are "actively engaging in farming." Absent the geography, I don't think parts of Minnesota's measure constitute facial discrimination (of course, I didn't think Nebraska's did either). Other provisions in the Minnesota measure take a similar approach.

Further, insofar as Minnesota's provisions do mention "the farm", the qualifying activities required are a bit different. That is, management OR labor will qualify. And management can possibly be provided from anywhere in the country. Nebraska's, on the other hand, required both management and labor (interpreted to mean physical toil).

As to whether this restiction would produce an ironic result. I wonder if that is necessarily the case. That is, if we are worried about integrated operations, then I don't think it is simply the agribusiness giants that need to be restricted. Just because the entity is a natural foods coop does not necessarily distinguish it from Sunkist or Ocean Spray. And, if it did, it could be difficult to write legislation that draws out the distinction.

I do tend to think that it is odd that we restrict cooperatives in corporate farming arena. We did the same thing in Nebraska and the measure was interpeted to restrict a group of local farmers efforts to form a cooperative to provide feeder pigs to the farmers.

10/17/2007 9:16 AM  
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