Agricultural Law

According to the Wickard case, the U.S. Congress has the power to regulate agricultural production under Article I, Section 8, of the federal Constitution, and Congress has left virtually nothing to chance. The numerous programs and laws that promote and regulate farming are overseen by the secretary of agriculture, who represents the USDA in the president's cabinet. The USDA is the government agency that carries out federal agricultural policy, and it is the most important legal entity to the farmer.

Usually, some two dozen agencies are housed within the USDA, all charged with carrying out the various services and enforcing the numerous regulations necessary for the efficient, safe production of food and fiber. Other administrative agencies can affect a farmer's legal rights, such as the FOOD AND DRUG ADMINISTRATION (FDA), the INTERIOR DEPARTMENT, and the TREASURY DEPARTMENT, but the USDA is the single department to which every farmer must answer.

The Agricultural Adjustment Acts establish and maintain prices for crops by preventing extreme fluctuations in their availability. These acts empower the secretary of agriculture to allot a certain amount of farmland for the production of a specific crop, and to apportion the land among the states capable of producing the crop. State agricultural committees then assign a certain amount of the land to various counties, and the counties in turn assign the land to local farms. This system guards against crop surpluses and shortages, and preserves economic stability by preventing extreme fluctuations in crop prices.

The COMMODITY CREDIT CORPORATION (CCC) exists within the USDA to further the goal of stabilizing food prices and farmers' incomes. The CCC provides DISASTER RELIEF to farmers, and it controls prices through an elaborate system of price support. Loans to farmers and governmental buyouts of farm products allow the CCC to maintain reasonable price levels. The secretary of the CCC is also authorized to issue subsidies, or governmental grants, to farmers as another means of controlling prices by maintaining farmers' incomes. By encouraging or discouraging the production of a particular food or fiber through financial reward, subsidies promote price stability in the markets.

Several federal programs help serve the same purpose of price stability. The secretary of agriculture may set national quotas for the production of a certain farm product. Set-aside conditions, also established by the secretary of agriculture, require farmers to withhold production on a certain amount of cropland during a specified year. Diversion payments are made to farmers who agree to divert a percentage of their cropland to conservation uses, and the Payment in Kind Program allows farmers to divert farmland from production of a certain commodity in exchange for a number of bushels of the commodity normally produced on the diverted land. Federal crop insurance, emergency programs, and indemnity payment programs protect farmers against unforeseen production shortfalls. The FARM CREDIT ADMINISTRATION, established by Congress as an independent agency in the EXECUTIVE BRANCH of government, provides funds for farmers who are unable to purchase feed for livestock or seed for crops.

Also in place are federal programs and regulations that provide for the coordination of farm cooperatives, standardization of marketing practices, quality and health inspections, the promotion of market expansion, the reporting of farm statistics, and the administration of soil conservation efforts. For example, the Soil Conservation and Domestic Allotment Act (16 U.S.C.A. §§ 590 et seq. [1936]) directs the secretary

of agriculture to help farmers and ranchers acquire the knowledge and skill to preserve the quality of their soil. The federal Food Stamp Program helps to support domestic food consumption and economic stability for consumers and farmers alike by subsidizing the food purchases of people with low incomes.

Under Title VII of the United States Code, the secretary of agriculture is charged with coordinating educational outreach services. The Morrill Act (7 U.S.C.A. §§ 301-05, 307, 308), passed by Congress in 1863, granted public land to institutions of higher education for the purpose of teaching agriculture. In 1887, the HATCH ACT (7 U.S.C.A. § 361a et seq.) created agricultural experiment stations for colleges of agriculture, and in 1914, the Smith-Lever Act (7 U.S.C.A. § 341 et seq.) created the Extension Service, which allowed agriculture colleges to educate farmers not enrolled in school.

In the Extension Service, agents are hired by an agriculture college to help farmers address a variety of farming issues, and to promote progress in farming by providing farmers with information on technological advances. Many farm families have been helped by the land-grant programs, but some critics have argued that this college system too often emphasizes increased productivity and frenzied technological advancement at the exclusion of small-scale farm operations. In the mid-1990s, the Extension Service began to branch out. The Minnesota Extension Service, for example, began to address such issues as teen drug abuse and child neglect. This use of agricultural monies for social services has disappointed some and pleased others.

One high-profile controversy involves the Bovine Somatatropin (BST) bovine growth hormone. The BST hormone increases the milk output of dairy cows. The Milk Labeling Act bills passed by Congress in April 1993 regulate the use of the drug by requiring the secretary of agriculture to conduct a study of its economic effect on the dairy industry and on the federal price support program for milk. The act also requires the producers of the milk from cows treated with BST to keep records on its manufacture and sale. Proponents of the drug extol its production benefits, but opponents argue that increasing productivity is less important than ensuring food purity.

Homestead protection is another form of federal relief, which helps keep farms out of foreclosure. To qualify for homestead protection, farmers must show that they have received a gross farm income that is comparable to that of other local farmers, and that at least 60 percent of their income has come from farming. A 1993 case challenged the definition of this type of relief. Schmidt v. Espy, 9 F.3d 1352 (8th Cir.1993), was a suit brought by the Schmidt family to stop the FmHA from calling in the Schmidts' farm loan. The USDA had ruled that because the Schmidt farm had suffered net losses, it could not qualify for homestead protection. The Schmidts took their case to the U.S. district court, which affirmed the USDA's decision.

The Eighth Circuit Court of Appeals reversed the decision. According to the appeals court, the statutory definition of income for purposes of homestead protection is gross income, not gross profits. The court reasoned that because homestead protection is normally sought by financially distressed farmers, limiting the protection to profitable farmers would run contrary to the purpose of homestead protection.