Watne testifes against change to state’s corporate farming law

EDITOR’S NOTE: On Jan. 26, North Dakota Farmers Union (NDFU) members testified on HB 1371 to the House Ag Committee. The bill allows a livestock exemption to the state’s corporate farming law. Printed here is NDFU President Mark Watne’s testimony prior to the committee accepting NDFU’s amendment.

Chairman (Paul) Thomas and members of the committee,

Thank you for the opportunity to testify on House Bill No. 1371. My name is Mark Watne, and I serve as the president of North Dakota Farmers Union. NDFU opposes HB 1371.

NDFU firmly believes that food production should be in the hands of family farmers and ranchers. We believe family farmers and ranchers are the foundation of our rural communities, our economy, and our state’s social fabric. Because of that, NDFU has always advocated for policies that ensure ownership, operation and management of farms and ranches is held by family farmers and ranchers.

In 2015 the legislature passed SB 2351, a bill to exempt swine and dairy farms from the corporate farming law. Shortly after that bill passed, NDFU’s Board of Governors chose to refer that legislation. Ultimately, North Dakota voters rejected the exemptions with a 76% “No” vote. This bill provides those same types of exemptions for more sectors without any monitoring and reporting requirements. I struggle to understand why our members and voters (or citizens) would react to this bill any differently than they did six years ago.

We believe this bill goes much further than what many of its supporters have argued for. Some have said we need to change the law to allow unrelated farmers to partner with each other. The current law already allows that. Unrelated farmers can already form general partnerships, limited partnerships, LLPs, LLLPs, and cooperatives. Our current law even allows multiple family corporations to come together through any partnership structure.

Other supporters have argued we need to allow farmers and ranchers to access investment from outside corporations or individuals. Our current law already allows non-farming individuals to invest in farms or ranches through any partnership structure. It also allows outside entities to invest in farming or ranching cooperatives.

This bill allows outright ownership of cattle feedlots and hog, dairy and poultry farms by any corporation. The bill does not require that farmers or ranchers are shareholders in that corporation. It does not limit the number of shareholders involved. This bill would allow meatpackers to own cattle feedlots and hog barns.

HB 1371 establishes a 160-acre limit for these new exempt operations. However, it does nothing to prevent a corporation from using multiple subsidiaries to buy multiple quarters of land. That is made more problematic by the bill’s lack of any minimum animal number required to be exempt. Enforcing the 160-acre limit itself may also prove challenging. HB 1371 does not include any monitoring or reporting requirements. These operations will not be subject to the same transparency requirements family corporations are subject to, including reporting land ownership.

NDFU is also concerned by the unintended consequences of changing the definition of farm or ranch. Some Bank of North Dakota programs, like Ag PACE, rely on the definition of farming and ranching in the current corporate farming law to determine eligibility. By removing animal feeding operations from that definition, this bill could harm genuine family operations, who could be locked out of those programs. Whether non-family corporations should be eligible for BND programs is a complex issue, in and of itself. It is one that should be discussed more deeply.

Removing animal feeding operations from the definition of farming or ranching also invites new challenges to existing policies that support family farmers or ranchers. If the agriculture committee says that an animal feeding operation is not a farm or ranch, how can we argue that these operations should receive agricultural property tax benefits?

NDFU appreciates our collaboration with you and other agricultural groups to support livestock development in our state. Corporate farming is a complex issue. We would fully support an interim study to allow a more thoughtful, deliberative discussion. However, we are firmly opposed to HB 1371, as it currently stands. Thank you.