Iowa Ag Lawyer|What Shape is Your Hat
What shape is your hat
NE Iowa Farmer June 2011
The old joke that farmer’s seed corn caps are curved because of looking into the mailbox for the government check may become a thing of the past, and not because of electronic deposit.
With high prices for key agricultural commodities and rapid global increases in food demand, farm programs developed years ago in an era of low prices appear to be heading for the hangmen’s’ noose. Dan Glickman, former USDA Secretary of Agriculture confirmed that sentiment at the recent Economics Food and Agriculture Policy Conference.
Agriculture built a commodity surplus that lasted until a few years ago, but that’s no longer the case. Also with a national debt of $1.6 trillion, lawmakers have to examine all programs, including agricultural ones. The latest tax proposal calls for an increase of taxes on those who make over $200,000 with a net result of $80 Billion in revenue. That is a drop in the bucket. It is like a company that is loosing $16,000 a year going to the bank and saying the only change we are making is we are taking $80 from our top sales guys. Would you lend money to that company? Yet, that is the proposal for our government to right itself. Program cuts are coming.
With key commodity prices strong, the next farm bill will be written under different circumstances all together. People live in largely urban areas, and “fly over” states where the majority of ag production (outside of California) exists are losing, not gaining, seats in the House and its Senators don’t seem to be all on the same page. Take for example, Senator Tom Harkin’s recent participation as a co chair of a conference whose focus is on reducing meat consumption that is backed by the Human Society of the United States and foodie Michael Pollan. Hardly seems like that is representing Iowa in the least bit.
Crop insurance will play a larger role, and while the upper Midwest largely uses crop insurance, the deep south distains it. Either it doesn’t pay for the premium invested or they know that the federal government will gin up an ad hoc disaster bill for them in the event of true emergency. The response to the request for federal disaster area in Texas (denied) should serve as a warning.
All is not lost for commodity supports, Senator Saxby Chambliss of Georgia has indicated that he saw the destruction of the southern textile industry because of government policy changes, and he will not witness the destruction of southern agriculture. Southern states rely heavily on commodity programs.
Different forces such as health, national security and energy have entered the farm policy debate. It wasn’t always like that. It used to be the farm states handled it. Now it is everybody’s business what is going on in the farm bill, not just Iowa Farm lawyers.
Even Prince Charles, fresh off of not paying for his son’s wedding, is getting in on the debate. He is an ardent organic advocate. He believes that growing populations, rising commodity prices, increased demand for meat as incomes grow, a changing climate, and limited water supplies are best dealt with by organic farming because of its ability to maintain soil fertility reliance on chemical inputs. In a recent conference he called for pulling subsidies from conventional farmers and increasing their energy costs to provide more economic incentives for organic agriculture.
The United Nations says a billion people go hungry on this planet each day. And the overall population is growing. Experts expect we'll top 9 billion by 2045. Noted food prize winner Norman Borlaug has embraced technology as a means to meet the growing demand, I don’t see what the Prince has against technology. As a zealous Irishman, I am already prone to not listen to the Prince, but this really doesn’t make sense to me. I could take some jabs at the Crown’s citizen’s health care, dental care and perhaps personal hygiene standards as further evidence of reluctance to adopt technology not resulting in positive results, but I digress. Organic farming has its place in the market as a “food choice” as does conventional farm operations who will continue to feed the masses. Any wonder that Whole Foods (a national organic retailer) is just now getting around to opening a store in Iowa? I don’t think it is about feeding the masses.
The bottom line is that agricultural operators should anticipate that the way the FFA instructor and their grandfather did things will not likely cut the mustard in the future. And maybe they should consider what type of hat they wear.
Get off your Farm
The execution for over 100,000 acres of farm land and 90 homes and farm building sites in southeastern Missouri was in the middle of the night and without a final meal or request. With water flowing at 550 feet per second, the destruction was swift. At the time the levee was breached, acreage in the affected area was selling for between $4,000 and $6,000 an acre. Corn prices were about $6.75 a bushel and the land was producing about 200 bushels an acre. Wheat was selling for between $8 and $9 a bushel and the land was producing about 75 bushels an acre. Soybeans were selling for between $12 and $14 a bushel and the land was producing about 70 to 75 bushels an acre. The Corps of Engineers' own estimates place damage to the property at more than $300 million.
Shortly thereafter attorneys filed a class action suit alleging the government violated the farmers' property rights protected by the 5th Amendment of the Constitution. The Corps lacked the easement over the affected property in the floodway. The class action complaint charges that the action violated the "takings clause" of the 5th Amendment which prevents the government from taking private property without due process of law the government must pay for the taking.
In Iowa, such an easement would have been reflected in the abstract and brought to the purchaser’s attention via title opinion. Iowa is the only state that still uses abstracts and title opinions to make sure a purchaser of property knows exactly what encumbers the property. Other states just sell “title insurance” which , to me, is a form of legalized gambling that you actually own the property and that no easements will impact your use of the same.
The counter argument is that those farmers knew the corps could blow the levee at anytime and benefitted all these years from its protection. Therefore, they should just lump it and move along. I don’t think that will hold water with the courts. The actions of the government in this situation are little different than when the State of Iowa wanted to build Volga Lake into a destination recreation lake. The government took property of a private citizen and in both cases, the citizen needs to be compensated.