North Dakota Considers Whether to Allow Corporate Farming

Tuesday, June 14, 2016
Credit: North Dakota Farmers Union


Julie Bosman, © 2016 New York Times News Service

WING, N.D. — The Wagner family farmstead in central North Dakota could have been lifted from a Grant Wood painting: bales of hay rest on a gently sloping hill, cattle graze near a bright blue pond, green tendrils of durum and sunflowers peek out of the dirt.

The Wagners fear that all of this could someday be under threat from big, impersonal corporations. It is a concern that is expected to drive them, and other North Dakotans, to the polls on Tuesday to vote on a referendum that would make it possible for companies to buy up farms like theirs.

Starting in 1932, North Dakota law barred nonfamily corporations from owning farmland or operating farms. But that changed in March of last year when the state legislature passed a bill that would relax the corporate farming ban and Republican Gov. Jack Dalrymple signed it into law.

Citizens protested the new law, with the state’s farmers union at the forefront, which led to the referendum that voters will face on Tuesday. The law was set to take effect last August, but its fate rests on the outcome of the referendum.

A vote for the measure would uphold the new law, which allows domestic corporations and limited liability companies to own and to operate dairy farms and swine production facilities on land that is no larger than 640 acres, or 1 square mile. A vote against the measure would repeal the new legislation and restore the law that had governed farm and dairy operations in the state for more than eight decades.

While the debate is very much focused on maintaining the character of North Dakota, it also taps into widespread fears about the disappearance of family farms throughout the United States and the spread of big corporations and their farming methods into rural America.

People like the Wagners who support the earlier law — one of the strictest in the country — say that it protects the environment and family farmers like them.

“With corporate farming, they just don’t have the connections,” said Laurie Wagner, whose husband’s grandparents started the farm in the 1930s, as she walked around the property on Thursday. “They could buy up all the land, and it means nothing to them. They could make it impossible for people like us to compete.”

The issue has sharply divided North Dakotans. On rural roads outside Bismarck, the capital, some fields and front yards are decorated with bright green signs declaring, “No to Corporate Farming.” Many people are suspicious of big business and eager to preserve the state’s long heritage of family-owned farms.

Agriculture remains North Dakota’s dominant industry, with close to 30,000 family-operated farms and ranches. In 2012, North Dakota became the first state to enshrine the “right to farm” in its constitution.

“I think small towns and rural communities are at stake,” said state Rep. Kenton Onstad, a Democrat and the House minority leader. “I think the values of North Dakota are going to be given up and slowly erode.”

But those who support the ballot measure say that opponents are acting out of nostalgia and emotion. They argue that the farming and ranching business in North Dakota needs to evolve to stay competitive: Dairies and hog farms have declined in recent years, prompting many people to argue that the industries could use a boost.

“We have this picture in our head of the Hollywood farm, with the dairy cows, a couple of pigs, a couple of chickens,” said Katie Heger, a family farmer who favors allowing corporate farming. “There are very few farms that are like that. Farming and ranching is a business. So if we’re looking at sustaining agriculture in the state of North Dakota, we need to look at how we can build business.”

During last year’s debate, Dalrymple said that he hoped changes to the farming law would encourage economic growth in the struggling dairy and swine industries. And he promised that the new legislation included safeguards to protect North Dakota’s family farms.

“The bill includes strict limits on the use of the business structure and we do not consider it a threat to the farm sector of North Dakota as we know it,” he said at the time.

The North Dakota Farmers Union, which opposed the bill, responded by gathering more than 20,000 signatures to force the measure onto the statewide ballot.

The union has spent heavily on mailers and television ads in recent weeks and recruited more than 1,000 volunteers to make phone calls and knock on doors to drum up support.

Mark Watne, the group’s president, said he believed that if the legislation went into effect, it could open the door to consolidation and the possibility that smaller farms could go out of business.

Family farmers, he said, have an incentive to train the next generation, while corporations could choose profits over longevity.

“We simply do not believe in our communities that the ownership of land in the hands of a corporate structure is in the interest of long-term agricultural production,” Watne said.

Republican State Sen. Terry M. Wanzek, a farmer and rancher who sponsored the bill last year, said that opponents are driven by unwarranted fears of big business.

“They think Monsanto or Wal-Mart is going to come in and own everything,” Wanzek said. “I don’t see this as some big bad boogeyman who’s going to come in and take over the farm. If I felt in any way that it was going to threaten our heritage or our way of life on the farm to any great extent, I never would have supported it.”

Some have argued that allowing family farmers to incorporate could give them more access to outside capital and investors for expansion, like other businesses in the state under corporate structure.

“The disadvantage with North Dakota’s law is that you can’t have any other partners once you’ve incorporated except for a very direct relative,” said state Sen. Joe Miller, the chairman of the Senate Agriculture Committee and a sponsor of the bill. “You’re hamstringing neighbors to be able to come together, or outside investment partners, maybe a friend who lives in California who wants to invest. There’s all kinds of different opportunities that one could explore, and that’s completely off the table right now.”

The North Dakota Farm Bureau, a lobbying organization that has farmer members, has adopted an alternative tactic in case the new law is defeated that takes aim at the 1932 law banning corporate farming. Earlier this month, it filed a federal lawsuit seeking to overturn the law, arguing that it is discriminatory and unconstitutional.

“The laws of our state, as they stand today, are forcing North Dakota’s farm families to make business management decisions that other businesses are not being forced to make,” Daryl Lies, the president of the Farm Bureau, said in a statement.

David M. Saxowsky, a professor of agriculture at North Dakota State University, said that the debate speaks to a culture in North Dakota that places a heavy value on farmland.

“We’re very proud of our resources, we think that our land is attractive to investors and we are very proud of our desire to be the business owner,” he said. “And for those reasons, we want to provide an environment in which smaller businesses owned by families can succeed.”

Dalrymple declined to be interviewed. In an emailed statement, he said, “It’s good that this will be decided by the people of North Dakota.”


To Learn More:

Growth of Factory Farming Leading to Uncontrolled Problems of Animal Waste (by Noel Brinkerhoff, AllGov)

Obama Gives Up Fight to Restrict Child Labor on Non-Family Farms (by Matt Bewig, AllGov)

Pennsylvania Eliminates State Inheritance Tax for Farms (by Noel Brinkerhoff, AllGov)


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