Agricultural Law

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

State regulations concerning the inspection, promotion, and improvement of farm production 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the federal government's first foray into the promotion of farming was the HOMESTEAD ACT OF 1862 (ch. 75, 12 Stat. 392 [repealed 1976]).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 concerning land ownership for farming purposes, but federal lands were eventually exhausted, and in 1976, these late-nineteenth- and early-twentieth-century acts became unnecessary and were repealed.

The colonial and pioneer families that practiced farming generally raised a variety of animals 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 prosperity 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.

The years following the Civil War were especially fruitful for farming communities. WORLD WAR I saw an increase in the value of farm products, 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. manufacturers 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 eliminated many family farms. As the general public became less able to buy such basic farm products as food and clothing, food prices dropped drastically, and farmers found themselves without the profits for their mortgage payments. Foreclosures became routine. Farm families considered foreclosures a breach of the government's promise to allow productive farm families 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 delivering 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

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.
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output. Parts of the act were declared unconstitutional by the Supreme Court in 1936, in part because the Court considered agriculture a matter of local concern. Congress and President Roosevelt continued to press the issue, with the amended Agricultural Adjustment Act of 1938, which contained more federal control of production, benefit payments, loans, insurance, and soil conservation.

The TEST CASE for the new Agricultural Adjustment Act was Wickard v. Filburn, 317 U.S. 111, 63 S. Ct. 82, 87 L. Ed. 122 (1942). In Wickard, Ohio farmer Roscoe C. Filburn sued Secretary of Agriculture Claude R. Wickard over the part of the act concerning wheat acreage allotment. Under the act, the U.S. DEPARTMENT OF AGRICULTURE (USDA) had designated 11.1 acres of Filburn's land for wheat sowing and established a normal wheat yield for this acreage. Filburn defied the department's directive by sowing wheat on more than 11.1 acres and exceeding his yield. This constituted farm marketing excess, and Filburn was penalized $117.11 by the department. When Filburn refused to pay the fine, the government issued a lien against his wheat and the Agriculture Committee denied him a marketing card. This card was necessary to protect Filburn's buyers from liability for the fine, and to protect buyers from the government's lien on Filburn's wheat.

Filburn sued to invalidate the wheat acreage allotment provision, arguing in part that it was beyond the power of the federal government to enforce such farming limitations. Even though Filburn did not intend to sell much of the wheat, the Supreme Court reasoned that because all farm product surplus had a substantial effect on interstate commerce, it was within the power of the U.S. Congress to control it. This decision affirmed the power of Congress to regulate all things agrarian, and the U.S. farmer, for better or worse, was left with a meddlesome lifetime friend in the federal government.

As the United States enjoyed economic prosperity through the 1950s and 1960s, the number of family farms remained relatively stable. Farm families learned to work with the federal government and its dizzying stream of agencies, regulations, and paperwork. Nevertheless, the mid-1980s saw another farm crisis. Widespread financial difficulty led to the loss of hundreds more family farms and prompted further federal action.

In response to this crisis, Congress passed an extensive credit-relief package in 1985, over the protest of President RONALD REAGAN's agriculture secretary, John R. Block. The several bills in this package provided for additional federal monies for loan guarantees, reduction of lender interest rates, and loan advancements.

This farm crisis was triggered by a combination of natural disasters, market shifts, lower prices, and production improvements. Furthermore, the onset of corporate farming, which involves mass production of farm products, forced farm families to consistently reckon with the harsh realities of the financial world.

Dissatisfaction with federal farm laws and policy led Congress in 1996 to pass the Federal Agriculture Improvement and Reform Act, which came to be known as the Freedom to Farm Act (Pub.L. 104–127, Apr. 4, 1996, 110 Stat. 888). The law, which was trumpeted by conservatives as the means to end 60 years of federal farm subsidies and to reinvigorate the free market, reduced regulatory burdens on farmers and ended requirements that farmers idle land to qualify for crop subsidies. However, the central part of the law consisted of "market transition payments"—the USDA paid farmers to compensate them for the possibility that farm subsidies might end in six years. This departed from the traditional federal practice where support payments were inversely related to crop prices—the higher the crop prices, the lower the support payments.

The Freedom to Farm Act gave farmers more than three times as much in cash subsidies in 1996 and 1997 than they would have received under the previous five-year farm bill. Even with these payouts, farm income began to fall in 1998, leading Congress to reverse course and authorize billions of dollars in farm relief. By 2002, Congress had abandoned the idea that the federal government should not subsidize farmers. It passed the Farm Security and Rural Investment Act of 2002 (Farm Bill 2002), Pub.L. 107–171, May 13, 2002, 116 Stat. 134, which set agricultural policy for the next six years. It is estimated that the total subsidies paid out over this period will reach $200 billion.

While government involvement in farming continues, the face of U.S. farming is evolving. Most farmers are now trained in business and keep abreast of farming trends, technological and manufacturing improvements, and the stock market. Many family farms have adapted by specializing in the mass production of one or two particular foods or fibers, like corporate farms. Other farmers have formed what is called a cooperative, a group of farmers dedicated to the most profitable sale of their products. By pooling their resources and producing a variety of goods, cooperative farmers are able to weather low-price periods and postpone sales until a product price reaches a high level.

Agriculture has become a powerful LOBBYING group in state capitals across the country, and the political issues are myriad. The industry itself is split into competing special interests, according to product. Family farms and cooperatives are 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 in the best interests of farmers, and farmers and their creditors continually struggle for leverage. Federal and state regulations seek to provide some predictability for the players in these struggles.