Official Newspaper of Eddy County since 1883

Proposed legislation would relax N.D. corporate farming rules

Right now, North Dakota's 68th Legislative Assembly is debating a bill that would allow feedlots and dairies to partner with corporations and limited liability companies, potentially eroding long-established anti-corporate farming laws.

The bill – designated HB 1371 – has comfortably passed the N.D. House of Representatives after a 70-24 vote, advancing it to the N.D. Senate where it's being discussed by the Agriculture and Veterans Affairs Committee.

Currently, the state's anti-corporate farming laws prohibit LLCs and corporations from engaging in the business of farming or ranching, and from owning or leasing land for the same.

However, if passed in the senate and signed by Gov. Burgum, HB 1371 would open the door for corporations and LLCs to have some ownership in dairy and feeding operations for cattle, poultry and hogs. Anti-corporate farming laws regarding crop production, meanwhile, would remain unchanged.

Typically, such corporate farming bills are vehemently opposed by the North Dakota Farmers Union (NDFU) – a union whose influence on such issues has had significant impact before. In 2016, for example, they successfully led an effort to repeal a similar attempt at loosening corporate farming restrictions via statewide vote.

This time, however, the NDFU isn't throwing their weight around. They've pushed for multiple amendments to HB 1371, but have officially adopted a neutral stance, and the bill's supporters are taking advantage.

Those supporting the bill argue it would increase livestock production in North Dakota, which lags significantly behind other states.

At the 2023 North Dakota Livestock Alliance, Nathan Sanderson, executive director of the South Dakota Retailers Association, compared the number of dairy cows that exist in his state to those that exist in North Dakota.

All totaled, there are 187,000 dairy cows in South Dakota, he said, while North Dakota has just 14,000.

According to information provided by District 29 Representative Don Vigesaa – who voted in favor of HB 1371 – North Dakota ranks 35th in dairy production in the country, and the total number of dairies has gone from 193 in 2009 to just 37 today.

Vigesaa said he believes the bill would help reverse those trends, and bring North Dakota back on par with other nearby states in livestock production.

"We need to increase our agricultural economy in our state,"he said, "especially when we have everything going so well for us in crop production, and yet in animal agriculture we're just so far behind our neighbors."

District 14 Representative, Jon Nelson, also voted in favor of the bill when it came to the House floor.

"Although I have never supported efforts to weaken our corporation farming laws in the past, I feel this proposal is necessary to improve the animal livestock numbers in the state," he said. "We have fallen behind in every area of animal livestock production compared to our three regional states closest to us."

Meanwhile, those arguing against the bill believe it would negatively impact family farm operations.

Republican Representative Dawson Holle of District 31, whose family owns a dairy farm in North Dakota, spoke against HB 1371 on the floor of the House of Representatives.

"The only thing we know, if we pass this bill, is you are opening it up for corporations from other states to come to the state of North Dakota to buy farmland and build animal operation facilities ...," said Holle. "But what we don't know is the effects that will have on our current family farms in North Dakota."

Republican Representative Jeff Hoverson of District 3 added, "I don't think I can go with this because I really think we are going against the will of the people. I don't think this is what North Dakota people really want, as was reflected in the measure they passed just seven short years ago."

Hoverson was referring to the ballot measure passed in 2016 that curtailed an effort to loosen anti-corporate farming laws. At the time, more than 75 percent of voters elected to keep corporations and LLCs away from North Dakota ranching.

However, Jeff Schafer, president of the N.D. Stockman's Association and owner of Roughrider Feeds in Eddy County, believes HB 1371 would only benefit North Dakota ranchers.

"It's one more tool in the toolbox to allow expansion of the livestock enterprises within the state of North Dakota," he said, adding that the Stockman's Association is supporting the bill in its current form.

Also supporting the bill is the North Dakota Farmers Bureau (NDFB). Daryl Lies, president of the NDFB, said the bill would help North Dakota agriculture move in the right direction.

"Family farms should have the opportunity to choose what business structure fits their families best without the government picking winners and losers," stated Lies in a NDFB press release.

Meanwhile, the NDFU – though officially still neutral – managed to secure some key amendments to the original legislation before it passed in the House.

As amended, House Bill 1371 establishes "authorized livestock farm (ALF) corporations," and "authorized livestock farm limited liability companies." It would also create the following requirements regarding such ALF entities:

• ALF entities are subject to the same reporting and enforcement standards as existing family farm corporations or LLCs;

• Family farmers or ranchers must own 75 percent of an ALF corporation and 51 percent of an ALF LLC;

• ALF entities are prohibited from producing crops or grazing livestock;

ALF entities are limited to 10 shareholders;

• Foreign entities, including subsidiaries of foreign companies, are prohibited from investing in ALF entities;

• Officers and directors of an ALF corporation, or managers and governors of an ALF LLC, must be actively engaged in the operation;

• An ALF entity is limited to 160 acres of land, and no individual shareholder may hold an interest in ALF entities that own a combined total of more than 640 acres; and

• An ALF entity must generate at least 65 percent of its gross income from the poultry, dairy or swine production.

Rep. Vigesaa said the NDFU played a major role in creating the current version of HB 1371.

"They came to the table and were actually instrumental in writing the final language along with other farmer organizations," said Vigesaa. "That helped a fella like me support it because I know that I represent a lot of farmers union members throughout our district."

He added, "I think the guardrails that have been put into the bill will not erode the family-farm structure."

Rep. Nelson also mentioned the important work done by the NDFU to protect family-farming, and how those protections helped secure his support for the legislation.

"I worked closely with N.D. Farmers Union to make this legislation have as little impact as possible to our support of family farmers," he said. "To that end, N.D. Farmers Union did not oppose this measure, which is a strong indication that this compromise will indeed have the opportunity to build a stronger and more diversified agricultural community in North Dakota."

As of press time, the last action undertaken in the senate regarding HB 1371 was a referral to the Agriculture and Veterans Affairs Committee. The bill can be tracked and future hearings can be viewed at http://www.ndlegis.gov.

Those interested are encouraged to reach out to their state senators and representatives, whose contact information can also be found on the legislature's website. District 14's state senator, Jerry Klein, has not yet voted in favor or against the proposed legislation. Klein can be reached at (701) 547-3517, or via email at [email protected].

 
 
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