AGRICULTURAL LAW

The body of law governing the cultivation of various crops and the raising and management of livestock to provide a food and fabric supply for human and animal consumption.

The law as it relates to agriculture is concerned with farmers, ranchers, and the consum-
ing public.Agricultural law is designed to ensure the continued, efficient production and distribution of foods and fibers. Through a vast system of regulations that control the various aspects of agricultural practice, federal and state governments are able to provide for the needs of both agriculturalists and consumers.

History of Agricultural Law

Agricultural law is a relatively new phenom-
enon. Farmers have always been subject to estab-
lished contract, real property, and estate laws,
but it wasn’t until the mid-1980s that federal
and state governments began treating the pro-
duction of food and fiber as a calling worthy of
special legal treatment.

As farm foreclosures became commonplace during the Great Depression, some farmers resorted to violence to try to keep their property. This image shows Iowa National Guard members, armed with rifles, ready to put down any disturbance during an auction in Crawford County in 1933.

State regulations concerning the inspection,
promotion, and improvement of farm produc-
tion were in place at the United States’s infancy,
but the federal government’s first foray into the
promotion of farming was the HOMESTEAD ACT OF
1862 (ch. 75, 12 Stat. 392 [repealed 1976]). This act
encouraged the westward expansion of European
Americans by selling federally owned lands for
farming. Another method of sale was land debt, a
financial arrangement in which farmers agreed to
pay the federal government a certain amount
from their yearly profits in exchange for the land.
Congress passed subsequent legislation concern-
ing land ownership for farming purposes, but fed-
eral lands were eventually exhausted, and in 1976,
these late-nineteenth- and early-twentieth-cen-
tury acts became unnecessary and were repealed.
The colonial and pioneer families that prac-
ticed farming generally raised a variety of ani-
mals and crops, depending on what the soil
would yield. This seminal arrangement came to
be known as the family farm. The family farm
community was rich in resources derived from
land, not money, and from this unique prosper-
ity grew a lifestyle with a status all its own.
Expendable income was not a priority for farm
families. The values attached to their way of life
placed a higher premium on plentiful food, vast
land ownership, and a spiritual fulfillment
derived from farming. Farmwork was difficult,
and the farmer was different from the rest of
society; it was against this backdrop that federal
and state legislators began to work when
addressing the pressing issues that farmers
would come to face.

Number and Acreage of U.S. Farms

The years following the Civil War were espe-
cially fruitful for farming communities. WORLD
WAR I saw an increase in the value of farm prod-
ucts, and in the Roaring Twenties, robust prices
were maintained by a general public capable of
buying food and clothing. However, in the
months before the STOCK MARKET crash of
October 1929, the value of farmland and its
products began to decrease. This was due in part
to high tariffs on manufacturing equipment
essential to farming, which allowed U.S. manu-
facturers to price farming equipment without
foreign competition. It was also due in part to a
new emphasis on mass productivity inspired by
the industrial revolution. The ability of farmers
to increase production on less land led to lower
prices and, eventually, fewer family farms.

The Great Depression of the 1930s elimi-
nated many family farms. As the general public
became less able to buy such basic farm prod-
ucts as food and clothing, food prices dropped
drastically, and farmers found themselves with-
out the profits for their mortgage payments.
Foreclosures became routine. Farm families
considered foreclosures a breach of the govern-
ment’s promise to allow productive farm fami-
lies to keep their land, and vast numbers of
farmers organized to withhold food from their
markets in an effort to force product prices
higher. A smaller number of farmers resorted to
violence to prevent other farmers from deliver-
ing their goods to market. Several foreclosures
were also prevented by force.

The unrest of the early 1930s in the Great
Plains states eventually led to widespread state
legislation that limited the rights of banks to
foreclose on farms with undue haste. Action was
also taken on the federal level. To avoid a
national farmers’ strike planned for May 13,
1933, President FRANKLIN D. ROOSEVELT signed
the Agricultural Adjustment Act (7 U.S.C.A. §
601 et seq.) on May 12. This act was the first in
a series of federal laws that provided compensation to farmers who voluntarily reduced their output. Parts of the act were declared unconstitutionalby the Supreme Court in 1936, in partbecause the Court considered agriculture a matterof local concern. Congress and PresidentRoosevelt continued to press the issue, with theamended Agricultural Adjustment Act of 1938,which contained more federal control of production,benefit payments, loans, insurance, andsoil conservation.The TEST CASE for the new AgriculturalAdjustment Act was Wickard v. Filburn, 317 U.S.111, 63 S. Ct. 82, 87 L. Ed. 122 (1942). InWickard, Ohio farmer Roscoe C. Filburn suedSecretary of Agriculture Claude R.Wickard overthe part of the act concerning wheat acreageallotment. Under the act, the U.S. DEPARTMENTOF AGRICULTURE (USDA) had designated 11.1acres of Filburn’s land for wheat sowing andestablished a normal wheat yield for thisacreage. Filburn defied the department’s directiveby sowing wheat on more than 11.1 acresand exceeding his yield. This constituted farmmarketing excess, and Filburn was penalized$117.11 by the department. When Filburnrefused to pay the fine, the government issued alien against his wheat and the Agriculture Committeedenied him a marketing card. This cardwas necessary to protect Filburn’s buyers fromliability for the fine, and to protect buyers fromthe government’s lien on Filburn’s wheat.Filburn sued to invalidate the wheat acreageallotment provision, arguing in part that it wasbeyond the power of the federal government toenforce such farming limitations. Even thoughFilburn did not intend to sell much of the wheat,the Supreme Court reasoned that because allfarm product surplus had a substantial effect oninterstate commerce, it was within the power ofthe U.S. Congress to control it. This decisionaffirmed the power of Congress to regulate allthings agrarian, and the U.S. farmer, for betteror worse, was left with a meddlesome lifetimefriend in the federal government.As the United States enjoyed economic prosperitythrough the 1950s and 1960s, the numberof family farms remained relatively stable. Farmfamilies learned to work with the federal governmentand its dizzying stream of agencies,regulations, and paperwork. Nevertheless, themid-1980s saw another farm crisis. Widespreadfinancial difficulty led to the loss of hundredsmore family farms and prompted further federalaction.In response to this crisis, Congress passed anextensive credit-relief package in 1985, over theprotest of President RONALD REAGAN’s agriculturesecretary, John R. Block. The several bills inthis package provided for additional federalmonies for loan guarantees, reduction of lenderinterest rates, and loan advancements.This farm crisis was triggered by a combinationof natural disasters, market shifts, lowerprices, and production improvements. Furthermore,the onset of corporate farming, whichinvolves mass production of farm products,forced farm families to consistently reckon withthe harsh realities of the financial world.Dissatisfaction with federal farm laws andpolicy led Congress in 1996 to pass the FederalAgriculture Improvement and Reform Act,which came to be known as the Freedom toFarm Act (Pub.L. 104–127, Apr. 4, 1996, 110Stat. 888). The law, which was trumpeted byconservatives as the means to end 60 years offederal farm subsidies and to reinvigorate thefree market, reduced regulatory burdens onfarmers and ended requirements that farmersidle land to qualify for crop subsidies. However,the central part of the law consisted of “markettransition payments”—the USDA paid farmersto compensate them for the possibility that farmsubsidies might end in six years. This departedfrom the traditional federal practice where supportpayments were inversely related to cropprices—the higher the crop prices, the lower thesupport payments.The Freedom to Farm Act gave farmers morethan three times as much in cash subsidies in1996 and 1997 than they would have receivedunder the previous five-year farm bill. Even withthese payouts, farm income began to fall in1998, leading Congress to reverse course andauthorize billions of dollars in farm relief. By2002, Congress had abandoned the idea that thefederal government should not subsidize farmers.It passed the Farm Security and RuralInvestment Act of 2002 (Farm Bill 2002), Pub.L.107–171, May 13, 2002, 116 Stat. 134, which setagricultural policy for the next six years. It isestimated that the total subsidies paid out overthis period will reach $200 billion.While government involvement in farmingcontinues, the face of U.S. farming is evolving.Most farmers are now trained in business andkeep abreast of farming trends, technologicaland manufacturing improvements, and thestock market. Many family farms have adapted by specializing in the mass production of one ortwo particular foods or fibers, like corporatefarms. Other farmers have formed what is calleda cooperative, a group of farmers dedicated tothe most profitable sale of their products. Bypooling their resources and producing a varietyof goods, cooperative farmers are able toweather low-price periods and postpone salesuntil a product price reaches a high level.Agriculture has become a powerful LOBBYINGgroup in state capitals across the country,and the political issues are myriad. The industryitself is split into competing special interests,according to product. Family farms and cooperativesare often at odds, although sometimes they join forces against massive corporate farming.Farming interests are frequently opposed by advocates for the environment and food purity.The government does not always seem to act inthe best interests of farmers, and farmers andtheir creditors continually struggle for leverage.Federal and state regulations seek to provide some predictability for the players in these struggles.

Federal Law

According to the Wickard case, the U.S. Congress has the power to regulate agricultural productionunder Article I, Section 8, of the federalConstitution, and Congress has left virtuallynothing to chance. The numerous programs andlaws that promote and regulate farming areoverseen by the secretary of agriculture, whorepresents the USDA in the president’s cabinet.The USDA is the government agency that carriesout federal agricultural policy, and it is the mostimportant legal entity to the farmer.Usually, some two dozen agencies arehoused within the USDA, all charged with carryingout the various services and enforcing thenumerous regulations necessary for the efficient,safe production of food and fiber. Other administrativeagencies can affect a farmer’s legalrights, such as the FOOD AND DRUG ADMINISTRATION(FDA), the INTERIOR DEPARTMENT,and the TREASURY DEPARTMENT, but the USDAis the single department to which every farmermust answer.The Agricultural Adjustment Acts establishand maintain prices for crops by preventingextreme fluctuations in their availability. Theseacts empower the secretary of agriculture toallot a certain amount of farmland for the productionof a specific crop, and to apportion theland among the states capable of producing thecrop. State agricultural committees then assign acertain amount of the land to various counties,and the counties in turn assign the land to localfarms. This system guards against crop surplusesand shortages, and preserves economic stabilityby preventing extreme fluctuations in cropprices.The COMMODITY CREDIT CORPORATION(CCC) exists within the USDA to further thegoal of stabilizing food prices and farmers’incomes. The CCC provides DISASTER RELIEF tofarmers, and it controls prices through an elaboratesystem of price support. Loans to farmersand governmental buyouts of farm productsallow the CCC to maintain reasonable price levels.The secretary of the CCC is also authorizedto issue subsidies, or governmental grants, tofarmers as another means of controlling pricesby maintaining farmers’ incomes. By encouragingor discouraging the production of a particularfood or fiber through financial reward,subsidies promote price stability in the markets.Several federal programs help serve the samepurpose of price stability. The secretary of agriculturemay set national quotas for the productionof a certain farm product. Set-asideconditions, also established by the secretary ofagriculture, require farmers to withhold productionon a certain amount of cropland during aspecified year. Diversion payments are made tofarmers who agree to divert a percentage of theircropland to conservation uses, and the Paymentin Kind Program allows farmers to divert farmlandfrom production of a certain commodity inexchange for a number of bushels of the commoditynormally produced on the diverted land.Federal crop insurance, emergency programs,and indemnity payment programs protect farmersagainst unforeseen production shortfalls.The FARM CREDIT ADMINISTRATION, establishedby Congress as an independent agency inthe EXECUTIVE BRANCH of government, providesfunds for farmers who are unable to purchasefeed for livestock or seed for crops.Also in place are federal programs and regulationsthat provide for the coordination of farmcooperatives, standardization of marketingpractices, quality and health inspections, thepromotion of market expansion, the reportingof farm statistics, and the administration of soilconservation efforts. For example, the Soil Conservationand Domestic Allotment Act (16U.S.C.A. §§ 590 et seq. [1936]) directs the secretary of agriculture to help farmers and ranchersacquire the knowledge and skill to preserve thequality of their soil. The federal Food StampProgram helps to support domestic food consumptionand economic stability for consumersand farmers alike by subsidizing the food purchasesof people with low incomes.Under Title VII of the United States Code,the secretary of agriculture is charged with coordinatingeducational outreach services. TheMorrill Act (7 U.S.C.A. §§ 301-05, 307, 308),passed by Congress in 1863, granted public landto institutions of higher education for the purposeof teaching agriculture. In 1887, the HATCHACT (7 U.S.C.A. § 361a et seq.) created agriculturalexperiment stations for colleges of agriculture,and in 1914, the Smith-Lever Act (7U.S.C.A. § 341 et seq.) created the ExtensionService, which allowed agriculture colleges toeducate farmers not enrolled in school.In the Extension Service, agents are hired byan agriculture college to help farmers address avariety of farming issues, and to promoteprogress in farming by providing farmers withinformation on technological advances. Manyfarm families have been helped by the landgrantprograms, but some critics have arguedthat this college system too often emphasizesincreased productivity and frenzied technologicaladvancement at the exclusion of small-scalefarm operations. In the mid-1990s, the ExtensionService began to branch out. The MinnesotaExtension Service, for example, began toaddress such issues as teen drug abuse and childneglect. This use of agricultural monies forsocial services has disappointed some andpleased others.One high-profile controversy involves theBovine Somatatropin (BST) bovine growth hormone.The BST hormone increases the milkoutput of dairy cows. The Milk Labeling Actbills passed by Congress in April 1993 regulatethe use of the drug by requiring the secretary ofagriculture to conduct a study of its economiceffect on the dairy industry and on the federalprice support program for milk. The act alsorequires the producers of the milk from cowstreated with BST to keep records on its manufactureand sale. Proponents of the drug extol itsproduction benefits, but opponents argue thatincreasing productivity is less important thanensuring food purity.Homestead protection is another form offederal relief, which helps keep farms out offoreclosure. To qualify for homestead protection,farmers must show that they have receiveda gross farm income that is comparable to thatof other local farmers, and that at least 60 percentof their income has come from farming. A1993 case challenged the definition of this typeof relief. Schmidt v. Espy, 9 F.3d 1352 (8th Cir.1993), was a suit brought by the Schmidt familyto stop the FmHA from calling in the Schmidts’farm loan. The USDA had ruled that because theSchmidt farm had suffered net losses, it couldnot qualify for homestead protection. TheSchmidts took their case to the U.S. districtcourt, which affirmed the USDA’s decision.The Eighth Circuit Court of Appealsreversed the decision. According to the appealscourt, the statutory definition of income forpurposes of homestead protection is grossincome, not gross profits. The court reasonedthat because homestead protection is normallysought by financially distressed farmers, limitingthe protection to profitable farmers would runcontrary to the purpose of homestead protection.

State Law

The TENTH AMENDMENT grants states theright to pass laws that promote the general safetyand well-being of the public. Because courtshave found that agricultural production and consumption directly affect public health andsafety, states are free to enact their own agriculturallaws, provided those laws do not conflictwith federal laws and regulations.Many state laws provide for financial assistanceto farmers. By issuing loans or providingemergency aid, states are able to ensure the survivalof family farms and continued agriculturalproduction. The states also have the power toimpose agricultural liens, which are claims uponcrops for unpaid debts. If a farmer is unable tomake timely payments on loans for services orsupplies, the state may sue the farmer to gain asecurity interest in the farmer’s crops. States alsoenact laws to supervise the inspection, grading,sale, and storage of grain, fertilizer, and seed.Municipalities can also set regulations thatostensibly control agricultural production. Thesubject of wetlands, for example, is within thejurisdiction of local governing bodies. In Ruotolov. Madison Inland Wetlands Agency, No. CV93-0433106, 1993 WL 544699 (Conn.Super.,Dec. 23, 1993), Michael Ruotolo, a farmer inMadison, Connecticut, challenged a municipalregulation that prevented him from filling inwetlands located on his property. Ruotolowanted to plant nursery stock on the area aftermoving earth to raise the ground level, but theMadison Wetlands Regulation precluded the fillingin of any wetlands. According to a statestatute, however, farming was permitted onsome wetlands of less than three acres.Ruotolo asserted a right to farm, and arguedthat since the state law and the local regulationwere in conflict, the state law should prevail.However, in previous proceedings between Ruotoloand the Madison Inland Wetlands Agency,the agency had found that the wetland on Ruotolo’sproperty had “continual flow,” and wastherefore subject to more protection than standing-water wetlands. Because the state statuteprevented even farmers with less than threeacres from filling in wetlands with continualflow, Ruotolo was prevented from farming thewetlands on his property.

AGRICULTURAL LAW