A Legal Conference for Agricultural and Rural Attorneys

Ohio Agricultural Law Symposium will take place September 17, 2010

Ohio State University Extension and the Ohio State Bar Association will again partner to provide the third annual Ohio Agricultural Law Symposium on September 17, 2010.  The continuing legal education event targets the educational needs of attorneys who work in agricultural and rural arenas.  Ohio Supreme Court Justice Paul Pfeifer leads our slate of speakers; he’ll provide an update on relevant case law impacting agriculture.  Joining the Justice will be  Jesse Richardson, Assoc. Prof. from Virginia Tech and Policy Advisor for the Water Resources Council, who will address water law and ethics in counseling farm families.  Duane Siekman, CEO of the Ohio Corn Growers and Ohio Wheat Growers Associations, will present on energy and agriculture, and  Tony Logan, Ohio’s USDA Rural Development State Director, will provide an update from his office.  The local food and farming landscape, a growing practice area for agricultural and rural attorneys, will be the topic of discussion from Jill Clark with OSU’s Center for Farmland Policy Innovation.  Attorneys Robert Moore and Dave Pennington of Wright Law Company will present on proving damages in agricultural litigation, and attorneys David Pryor and Greg Flax will lead a panel discussion on growing the agricultural law practice.  I’ll provide a presentation on the legal issues attendant to undercover operations on the farm. 

The Symposium will take place at The Ohio State University on the Friday before an Ohio football showdown between OSU and Ohio University–attorneys can come for the education and stay for the game.  For more information, visit the Ohio State Bar Association CLE link at http://www.ohiobar.org or click here for the 2010 Symposium Flyer.

New USDA Program Available in Ohio Hopes to Address Farm Transition Issue

Transition Incentives Program aims to help new and disadvantaged farmers obtain land.

The Farm Bill’s new Transition Incentives Program (TIP) is now available in Ohio.  The addition to the Conservation Reserve Program (CRP) will provide rental payments to transition CRP land from a retired farmer to a beginning or socially disadvantaged farmer who returns the land to sustainable production.  TIP received $25 million in funding from the 2008 Farm Bill.  Program supporters hope the funds will enable beginning and socially disadvantaged farmers to obtain affordable land for agricultural production.

Here’s how the program will work:

  • The CRP landowner must be a “retired” or “retiring” landowner.
  • The CRP contract must expire on or after September 30, 2010, but there is an exception for certain contracts that expired in 2008 and 2009.
  • The landowner must enroll all or a portion of the CRP land in TIP by the enrollment deadline.   Contracts expiring in 2010 and eligible 2008 and 2009 contracts must be enrolled by September 30, 2010.  Later contracts must be enrolled during the last year of the contract.
  • The new or socially disadvantaged farmer or rancher must develop a conservation plan for the TIP land.
  • By October 1 of the CRP contract expiration year, the landowner must agree to sell or lease (for a minimum of five years) the land to a non-family “beginning” or “socially disadvantaged” farmer or rancher and must allow the farmer to make improvements on the land in accordance with the approved conservation plan.
  • The beginning or socially disadvantaged farmer must return the land to production using sustainable grazing or crop production methods.
  • The beginning or socially disadvantaged farmer will be eligible to enroll the land in continuous CRP, Conservation Stewardship Program or Environmental Quality Incentives Program, with a waiver of the provision requiring 12 monthis of continuous ownership.
  • The landowner will receive up to two additional CRP annual rental payments if all TIP requirements are met.

A few important definitions:

  • A “retired or retiring” owner is one who has ended active labor as a crop producer, or plans to do so within five years of the TIP arrangement.
  • A “new or beginning farmer or rancher” is one who has been farming for less than ten years and who will materially participate in the operation of the TIP land.  If an entity, at least 50% of the entity’s members or stockholders must meet the ten year, material participation requirements.
  • A “socially disadvantaged farmer or rancher” is a member of a group that has been subject to racial or ethnic prejudice.  Examples include American Indians, Alaskan Natives, Asians, Asian-Americans, Blacks, African Americans, Hispanics.  Unlike other federal programs, this definition does not encompass gender prejudice; hence, women do not qualify as socially disadvantaged for purposes of the TIP program.

A few questions arise when considering whether there will be interest in TIP.  Are there sufficient incentives for the CRP landowner to transition the land, are there connections between CRP landowners and beginning or social farmers, and how will the rental payment affect the purchase or lease price for the land?  Ohio will soon have an indication of program interest, with the first enrollment deadline of September 30, 2010 quickly approaching.

For more information on TIP, visit the FSA site.

International Farm Transition Network Conference Coming to Ohio

The International Farm Transition Network will host their annual conference July 20-23, 2010 at the Sheraton Suites in Cuyahoga Falls, OH. This three day meeting will bring together agricultural professionals, farmers, citizens, and service providers to discuss and learn about exciting projects in farm transition.

During the conference, participants will hear panel discussions on farm labor, beginning farmer and farm succession research, and farm policy, and listen to interns, apprentices, and retiring farmers discuss their needs related to farm transition. Registration is still open! For registration, agenda, and more information, please visit: http://www.cvcountryside.org/farmland/IFTNConference.php

Vomitoxin in Corn

The unusually wet spring has predictably caused disease problems in Ohio’s wheat crop.  In addition to head scab and other more common diseases, vomitoxin is being found in this year’s crop.  Vomitoxin is a mycotoxin that causes suppressed appetite in livestock and can be harmful to people as well.

Producers with a Contract

Producers who have a contract with a buyer must look to the contract to determine their rights.  All provisions, including any small print on the back of the contract, must be read entirely before assessing legal rights.  The language of the contract is what matters; any verbal agreements made outside the contract have very little effect in enforcing legal rights.  Even if the producer and buyer agree to certain terms, if the terms do not find their way onto the contract then the parties are probably not bound by the terms.

In regards to Vomitoxin, the key terms are those describing the quality of the wheat required to be delivered.  Contracts usually require No.2 wheat to be delivered.  No. 2 wheat is a grade established by the USDA and may have up to 4% damaged kernels.  The USDA defines damaged kernels as “Kernels, pieces of wheat kernels, and other grains that are badly ground-damaged, badly weather-damaged, diseased, frost-damaged, germ-damaged, heat-damaged, insect-bored, mold-damaged, sprout-damaged, or otherwise materially damaged..”  Therefore, if the only grade standard in the contract is No. 2 Soft Red Wheat, a producer’s wheat should not be rejected or discounted solely for Vomitoxin unless more than 4% of the kernels are diseased or otherwise damaged.  The 4% threshold is the accumulation of all damaged kernels and not just a single type of damage.

Some contracts will include more restrictive grade terms such as “must be suitable for human consumption” or “must meet all FDA guidelines”.  The FDA has not established a minimum threshold for raw wheat for human consumption.  The milling and manufacturing of wheat can reduce vomitoxin levels.  Finished wheat products like flour and bran must contain less than 1 ppm if used for human consumption. The FDA has established a 5 part per million (ppm) threshold for hogs and 10 ppm threshold for cattle and poultry.  Therefore, a miller that requires wheat to meet FDA standards can reject wheat if the flour or other final product would contain more than 1 ppm vomitoxin.  It is important to note that wheat could have less than 4% damaged kernels but have more than  1 ppm vomitoxin.  That is, the USDA No.2 wheat grade is a completely different standard that the FDA’s ppm standard.

Producers that have wheat rejected can have the dual problem of having wheat rejected and still being obligated to fulfill the contract.  A worse case scenario would see a producer not being able to sell his wheat due to high vomitoxin levels while still being required to fulfill his contract obligations for untainted wheat with the elevator.  Typically a buyer will reject the wheat without requiring the producer to fulfill the contract.

Producers without Contracts

A producer who intends to sell a load of wheat to a buyer without a contract has very little legal protection from the corn being rejected.  The buyer is under no obligation to buy the wheat and can simply opt not to buy the wheat for any reasonable reason.  Without a contract, the buyer is not bound to any predetermined grade standards.  Even the smallest amount of vomitoxin in the wheat could cause it to be rejected.

Disputed Grain Samples

Producers have the right to appeal the grain grading determination performed by the elevator.  The Federal Grain Inspection Service (FGIS) oversees grain grading procedures and methods and also provides inspection and appeal services.  A producer who disputes the elevator’s grading can send a sample to FGIS and FGIS’ determination will be binding on both parties.  A FGIS office is located in Toledo.  For more details and information on grading appeals, contact FGIS at 419- 893-3076‎.

Crop Insurance

Some crop insurance policies cover Vomitoxin damage. The wheat must be checked by an adjuster while still in the field to avoid tainted wheat from being mixed with untainted wheat in bins.  Many producers opted to not file a claim on their corn crop due to the significant impact on APH.

Future Implications

Will we see grain contracts move away from the USDA No.2 Wheat standard and towards the FDA ppm standard for vomitoxin and other mycotoxins?  Buyers relying on the USDA standard could get stuck buying grain that exceeds the FDA’s ppm standards.  Unless blended with non-tainted grain, this grain would seemingly be unmarketable as it could not be used for human consumption, livestock consumption, and/or export. Producers should anticipate possible changes to grading standards in contracts offered by elevators and other buyers.  A careful reading of all new grain contracts should be a must for producers to make sure they fully understand the quality and grade of grain they are expected to deliver to the buyer.