Lamson, Dugan and Murray, LLP, Attorneys at Law

Agricultural Law Pt. IV: Touchdown in Taiwan

By Sean Minahan on Posted in Uncategorized

The group touched down late in Taipei, Taiwan to start the last leg of the LEAD 31 International Seminar.  The following four days was a whirlwind of experiencing the culture, politics and economy of the East Asian state otherwise known as the Republic of China.

Chiang Kai-Shek Memorial

Chiang Kai-Shek Memorial

To understand Taiwan, one must understand the split between the Republic of China (Taiwan) and the People’s Republic of China (China).  Therefore, our first stop was the  National Chiang Kai-shek Memorial Hall, which is a dedication and historical narrative to Taiwan’s founding father and first president, Chiang Kai-shek.

From Taipei, the group hopped on a bus to Yilan County in northeastern Taiwan.  After, driving through mountain passes and rice paddied landscapes, we visited the Sanfu Leisure Farm and Shangri-La Leisure Farm.  The Sanfu and Shangri-La leisure farms are not comparable to my definition of a farm.  Rather, I would characterize the Sanfu Leisure Farm and Shangri-La Leisure Farms as eco-tourism sites, consisting of several acres of natural habitat and wildlife tucked into the sides of the mountains. 

Rice paddies outside Yinlan, Taiwan

Rice paddies outside Yinlan, Taiwan

From Yilan we traveled to Miaoli in northwest Taiwan to visit the Flying Cow Ranch.  Referring to the Flying Cow Ranch as a ”ranch” is a pretty liberal use of the term.  However, Taiwan agriculture is conducted on a much smaller scale than it is in the U.S. with most farms consisting of 2 – 5 acres.  Although large in area for Taiwan, the Flying Cow Ranch maintains only small herd of milking cows and goats and is set up more for agri-tourism than commercial milk production.  The Ranch does produce a variety of dairy products sold on site to visitors and maintains a 7 acre organic garden.    

LEAD 31 Meeting with Taiwan Council of Ag

LEAD 31 Meeting with Taiwan Council of Ag

After visiting the Flying Cow Ranch, we jumped on the bus and headed east to Taipei.  Back in Taipei we had the opportunity to visit with representatives from the US Meat Export Federation (USMEF), US Grains Council (USGC), US Wheat Associates, and the American Soybean Association International Marketing (ASA-IM) at the American Institute.  We also had the opportunity to for a question and answer session at the Taiwan Council of Agriculture, which is essentially Taiwan’s version of the USDA.   

The one common theme throughout the Taiwan visit was the large role the U.S. played in Taiwan’s agricultural economy and the desire to build the connection and agricultural trade between the two countries. 

Leaving Taiwan and heading home was admittedly bittersweet.  I was torn between being ready to go home  and the desire to continue experiencing what these countries had to offer.  It was an experience I will never forget and will recommend to anyone who asks.

Agricultural Law Abroad Pt. III: Visiting Vietnam

By Sean Minahan on Posted in Uncategorized

Somewhere out in Hanoi a rooster crows incessantly

To be honest, of the three countries we visited on the LEAD 31 International Seminar, Vietnam was my favorite.  At its core, Hong Kong is similar to almost any other international metropolis.  Hanoi and Ho Chi Minh City, on the other hand were completely different than anything I had ever experienced.

Hanoi

Upon leaving Hong Kong, we flew into rain drenched Hanoi.  I had some preconceived notions of Hanoi as a communist block city of bare, minimalist concrete, covered with banners of socialist propaganda and in that respect, Hanoi did not disappoint.  However, I was surprised to find the street level of almost every building housed a family-owned shop selling anything and everything from freshly hung meat to all your hardware needs.  Entreprenuership at the local level thrives in Hanoi. 

Exchange at Vietnam Farmers Union

  While in Hanoi we met with several U.S. delegates at the U.S. Embassy, toured the Hanoi Hilton, and the Hanoi University of Agriculture.  From an agricultural perspective, I found the exchange with the Vietnam’s Famer’s Union (VFU) to be the most educational.  The VFU serves the dual functions of distributing information, technology and modern farming practices to the millions of farmers in Vietnam and serving as the farmers’ voice regarding government policies and regulations.  Although the VFU’s director tows the communist party line, it became clear in our exchange, that the government understands the need to bring its agriculture  production up to modern standards if it is going to participate in the global market.

Ho Chi Minh

A display of the tunnels at Cu Chi

From the city dynamic to the weather and everything in between, Ho Chi Minh city (aka Saigon) is a different world from Hanoi.  The city is humming with western social and economic influence, and without question, retains the wealth in Vietnam.  In Ho Chi Minh we had the opportunity to meet with several more U.S. delegates to discuss the hurdles and opportunities U.S. companies face when working and investing in Vietnam.  The delegates confirmed that although the government is centralized out of Hanoi, the economy is ran from Ho Chi Minh.  Thereafter, we visited the infamous tunnels of Cu Chi, consisting of the immense network of tunnels constructed by the North Vietnamese and Viet Cong during the Vietnam war.  The tunnels were a sobernig and educational experience for the group but we soon realized the war (American War as referred in
Vietnam) does not have the same grip on the Vietnam population the way the war still has on the U.S.   Our last stop was a tour of the Hi Tech Agricultural Management Park which provides an  educational and technological launchpad for agricultural businesses. 

Orchids, seen here at the Hi Tech Ag Park, are one of Vietnam’s largest ag exports

   

The Lead 31 International Seminar moved pretty fast and you had to keep up or get left behind.  But getting left behind in Vietnam might have been worth the price of catching up as there was a lot more of the country and culture I wanted to experience. 

Pictures and more information of the Vietnam leg can be found on the University of Nebraska LEAD website. 

 

Agricultural Law Abroad; Pt. II: Hello Hong Kong

By Sean Minahan on Posted in Uncategorized

If you love skyscrapers and city skylines, Hong Kong is the place for you.  

The morning after arriving in Hong Kong was spent acclimating to our surroundings (i.e. figuring out breakfast (fried monk fish) and exchange rates).  Fortunately, we did not have to figure out lunch, which was served and sponsored by Pet-Link Co. Ltd.  Pet-Link Co. is a distributor of small animal pet products produced by Oxbow Animal Health in Murdock, Nebraska.  Space is a premium in Hong Kong and rabbits and hamsters are popular pets.  Oxbow is an international leader in nutrition  of such animals.  The Pet-Link presentation provided a microcosm of the difference between doing business in a Special Administrative Region like Hong Kong from mainland China.  Essentially, Hong Kong is economically and politically autonomous from the mainland, which allow businesses to invest and thrive freely in the Hong Kong regions.  The same cannot be said for most of mainland China, where outside investors run a gauntlet of bureaucracy while being under the thumb of the government. 

After lunch we toured the Aberdeen Fishing Village and Repulse Bay.  English sailors made first contact with the local population at Aberdeen Harbor, which is now is populated by

Aberdeen Fishing Village

an interesting combination of million dollar yachts and fishing junks.  Several thousand people live and work on the boats; fishing everyday which they sell to the local distributors and nearby markets.  Repulse Bay on the other hand is all about recreation and one of the more popular beaches in Hong Kong.  Being in business attire, the group enjoyed the views mainly from the sidewalk while exploring the large Kwun Yam Taoist Shrine located next to the beach. 

Repulse Bay

The group was dropped off at the famous Ladies Market after dinner to fend for ourselves.  Why they call it the Ladies Market, I do not know.  The Ladies Market is a massive, nine block area of wall to wall stores and street vendors who sell everything from clothes, to electronics, to you-name-it.  All prices are negotiable a the Ladies Market.  Members of the group lightened their pockets but heavied their backpacks before filtering back to the hotel; some…ahem…later than others.    

Ladies Market

The following morning, we were bussed to Hong Kong Disneyland to tour the facilities before catching our afternoon plane to Hanoi, Vietnam.  We didn’t get on any rides. However, we did get a great tour demonstrating how U.S. agricultural products are being served worldwide; specifically Nebraska beef which Hong Kong Disney serves in the high end dining operations.      

After lunch we were off to the airport.  One and half days in Hong Kong is not enough, but by mid-afternoon, the group was already preparing for Vietnam.

Agricultural Law Abroad: Part I: How I Came to Board a Plane for SE Asia

By Sean Minahan on Posted in Uncategorized

I realize it has been some time since my last posting.  But wait, before you write me off as being lazy or having given up, listen to my excuse.  

Rice paddies outside Taipei, Taiwan

On January 12th, I and the rest ofthe Nebraska LEAD Class 31, left for an educational tour of Hong Kong, Vietnam and Taiwan returning on January 24th.  The weeks beforehand were spent scrambling around getting my cases and staff organized in preparation for my 12 day absence from the office.  

Before talking about the travels, I want to explain how I got to the point of boarding a plane for SE Asia.  In the spring of 2011, I applied for the Nebraska LEAD Program, which is a leadership development program geared towards Nebraska residents involved in production agricultural and agri-businesses.  The mission of the program is “To prepare and motivate men and women in agriculture for more effective leadership.”  To fulfill that mission, the Nebraska Agricultural Leadership Council selects a new class of 30 applicants each year for two-year program of monthly educational seminars held throughout the State.  Throughout the seminars, class members are provided an education on agriculture and the leadership skills necessary to take agriculture into the next generation. 

During the second year, the class is sent on an international study/travel seminar.  The location of the international study/travel seminar which changes every year.  This year, LEAD Class 31 traveled to Hong Kong, Vietnam and Taiwan.  Over the next several days, I plan to blog about my experiences in those countries and what I learned of their agricultural practices and the regulatory system in which it works.

Rezoning Your Backyard For Wind Farms Is Not A Taking According To 7th Circuit Ct. of Appeals

By Sean Minahan on Posted in Government Regulations

 

 Some people just do not want certain activities conducted in their back yard, even if those activities which may benefit the community as a whole.  Patricia Muscarello is such a person when it comes to wind farms being put up near land she owns in Winnebago County, Illinois.  Despite Ms. Muscarello’s best efforts, the 7th Circuit Court of Appeals decided the Winnebago County Board could rezone wind farms as permissible use of agricultural land. 

Prior to 2009, a property owner in Winnebago County had to jump through several procedural hoops to obtain a special permit to develop a wind farm on his/her property.  However, in 2009, the Winnebago County Board amended the ordinance to declare wind farms as permissible use of agricultural land, thereby, making wind farm development easier from a procedural standpoint.  Ms. Muscarello filed suit against the Winnebago County Board alleging the amendment constituted a government “taking” of her property.  A ”taking” is legal speak for government activities on your property or a neighboring property which deprive you of your use of the property or renders your property essentially worthless.  Ms. Muscarello complained the side effects of a wind farm developed on her neighbor’s property would negatively affect her property to the tune of $500,000.  The Court admitted some side effects of wind farms including shadow flicker, noise, ice and blade throw and the death of birds were real concerns; referencing several articles which you can visit here, here, here, here, and here.  Yeah, I know, the Court really did their homework.  

Despite Ms. Muscarello’s valid concerns, the Court found several problems with her claim.  The first being wind farms had not been developed or were in the process of being developed near her property.  Therefore, no such ”taking” of her property had occurred nor was in the process of occurring.  Second, wind farm development was never banned in Winnebago County prior to 2009.  Rather, the amendment potentially made the administrative process for development easier.  The Court determined that greasing the wheels for development did not impose a restriction on her land and did not constitute a taking.     

In sum, the Winnebago County Board’s amendment did not take Ms. Muscarello’s backyard, which was never protected from wind farms in the first place. 

You can find the Court’s complete order here.         

 

 

 

Written Livestock Production Contracts: Revisiting the Benefits Over the Handshake Deal.

By Sean Minahan on Posted in Farm Management

 

Hopefully they are saying “Hello” and not “It’s a Deal”.

Almost exactly a year ago, I wrote a blog discussing important checklists for producers entering livestock production contracts, which you can revisit here.  This issue came to mind again when I learned of a recent lawsuit over a handshake deal between a livestock owner and contract grower.  The owner claimed $85,000 in damages when several of the owner’s cattle became sick or died because the contract grower allegedly failed to provide proper care for the animals.  Many cattle feeding contracts are done on a handshake and such deals work fine when everything goes as planned.  However, such deals usually lack the specificity to cover responsibility when things do not go as planned and the parties find themselves mired in a subsequent lawsuit.

Therefore, I am dragging out the Iowa Department of Justice’s Livestock Production Contract Checklist again.  I would like to emphasize Section C(3): Livestock Health, which asks several questions that can clarify responsibility for animals lost during a livestock production contract.  For example:

Can you reject livestock you think are sick?

Who bears death loss risk while the livestock are at your facility, for failure of ventilation, heating, cooling, watering, or other equipment?

Who bears death loss risk while the livestock are at your facility due to extreme weather conditions?

Does your contract include a rebuttable presumption the contractor is responsible for death loss occurring soon after arrival because of unhealthy animals? and;

Who determines and pays for scheduled health care?

I would also like to emphasize Section E(8): “You should not rely on oral agreements or interpretations of the contract.  Even if these issues are discussed in an oral custom feeding contract, you will likely find yourself arguing over the details of the discussion.”

The checklist provides several other sources of information on custom feeding contacts that you can check out if you have more questions.

Just remember, a handshake deal is good when it goes as planned but is fairly worthless when it doesn’t.

The Wrongful Death Lawsuit: 5 Points Every Rancher or Farmer Should Know

By Sean Minahan on Posted in Farm Management

Emergency medical helicopter taking off in rural field

Every farmer and rancher knows their business is dangerous, and even with the utmost care, accidents happen.  When the accident is fatal a subsequent wrongful death lawsuit may not only affect the bottom line but can also bring emotional and social turmoil that a farming or ranching operation is not prepared for.  Fatal accidents can happen anytime, but here in Nebraska and Iowa, these cases tend to occur more regularly during harvest season when farmers are working harder and faster and taking chances they probably wouldn’t take if they had more time.  We have seen two wrongful death cases involving farming operations filed in Nebraska in the last two months.  The most recent involved a man who was accidentally hit by a combine while the other involved a man who suffocated when engulfed in a grain bin.  Read about them here and here.

The following is a list of five important details you should know about wrongful death cases in Nebraska and Iowa:

(1) In Nebraska and Iowa, wrongful death cases must be brought within 2 years of death.

(2) The wrongful death action is brought by a representative of the decedent’s estate for the exclusive benefit of the spouse, children or parents.

(3) Recovery is allowed for the the medical and funeral expenses resulting from the wrongful death plus any economic loss of the decedent’s services and support suffered by the spouse, children or parents.  Parents may also recover for the loss of society, comfort, and companionship of a deceased minor child.  Iowa allows recovery for the loss of society, comfort, and companionship of an adult child as well.

(4)  Recovery is also allowed for pre-death pain and suffering the decedent incurred as a result of the accident.  In Nebraska the claim for a pre-death pain and suffering is a separate claim from the wrongful death claim and can be filed within 4 years of the date of the accident.

(5)  Mental suffering, bereavement, or solace of the widow or next of kin is generally not a recoverable damage.

Please realize the above 5 points are general rules with exceptions depending on the facts of circumstances of each case.  Hopefully, as the reader, you never have to go through one of these lawsuits.  However, if a fatal accident does occur in your farming or ranching operation you should call your attorney who can help prepare you for a possible suit.

National Organic Program Establishes 5% Residue Testing Requirement

By Sean Minahan on Posted in Organic and All Natural

Many in agriculture know the organic certification process has been a less than airtight, although many consumers may not be aware.  As I discussed in my May 2011 blog, certifying agencies have been inconsistent with the frequency of inspections, inspection standards, and the assessing punishments for violations.  The National Organic Program (NOP) has attempted to tighten those leaks by establishing a periodic residue test on 5% of the farms certified by an independent agency.

The testing requirement will begin in 2013 and require a certifying agency test for pesticides, hormones, antibiotics, and genetically modified organisms on at least 5% of the farms the agency certifies.  It appears the breadth of the inspection has also increased as inspectors will be required to test pre-harvest and post harvest residues, and may go so far as testing the soil, water, waste, seeds, plant tissues, and processed products. Source: Beyond Pesticides

The rule comes two years after an U.S. Department of Agriculture (USDA) audit of the NOP which found NOP was not conducting periodic residue testing.  The NOP’s budget was increased from $3.9 million to $6.3 million and its staff was increased from 16 to 31 in order to handle the testing requirements.  On the down side, the new rules may end up de-certifying some producers.  However, leaders of the organic industry will generally applaud the tighter regulations since the premiums charged for organic products are based on the credibility of the organic seal.  The new regulations will help ensure the integrity and legitimacy of that seal.

GIPSA Enforcement: Failure to Pay When Due Violations are Low Hanging Fruit

By Sean Minahan on Posted in Farm Management, Government Regulations

Cattle Chute

In the past two months, there seems to be an uptick in violations of the Packers and Stockyards Act (P&S Act) for failing to pay, when due,      the full amount for livestock.  In fact, the U.S. Dept. of Agriculture’s Grain Inspection, Packers and Stockyards Administration (GIPSA) has issued ten press releases regarding such violations in that time period.

Arguably, the violation for failing to pay, when due, is the fruit hanging on the lowest limb of the GIPSA regulation tree. A violation can occur quickly when an operation is running close to the red, or even if there is a simple miscommunication at the bank.

The rule requires packers, market agencies, and dealers subject to the P&S Act deliver full payment to the livestock seller by the close of the next business day following the purchase and transfer of the livestock. Mailing the payment is allowed if the seller is not available at the place of transfer or agrees in writing prior to the sale.

So how can this happen? To give a simple example: An auction house sells 50 head of cattle to B. The auction house then buys 100 head of cattle from C. The auction house could be in violation if B’s check bounces thereby leaving the auction house without sufficient funds to pay C in time. Maintaining sufficient capital or proper bond amounts can become difficult if the buyer is moving a lot of livestock through several avenues or is working on thin margins.

Packers, market agencies and dealers can protect themselves from these violations through signed written agreements with the seller allowing alternative payment terms made prior to the purchase transaction. However, sellers may be unwilling to sign such agreements as they lose their right to the trust established protecting sellers from a buyer’s failure to pay.

Given the volatility of the market and speed in which livestock can change hands, we can expect GIPSA will continue the easy pickings of failure to pay when due violations.

 

 

And in this Corner: Preparing for Crop Insurance Arbitration

By Sean Minahan on Posted in Crop Insurance, Uncategorized

Farmer v. Crop Insurer

I was hanging out in Midwesttown, USA the other day and came across a poster advertising an event held at the community center.  The poster read: FIGHT NIGHT! Jimmythe Farmer v. Craig Crop Insurer in a 12 round winner take all bout.  So I headed right over, laid down my money and walked in to a sold out fight.  It was a good fight with both fighters standing toe to toe exchanging jabs, uppercuts and haymakers.  In the end, Jimmy the Farmer won by a close decision from which Craig Crop Insurer immediately requested a rematch.  Then I woke up, got dressed and went to work.Without a doubt, crop insurance disputes would be way more interesting if actually handled in the ring.

 

Considering the current drought may create a record $25 billion in crop insurance claims this year, community halls, civic centers and VFW’s would have a hard time scheduling all the potential fights.  In the real world, crop insurance disputes are handled in a beauracratic quagmire of paperwork, phone calls and eventually arbitration.

Federally re-insured crop insurance policies require farmers to arbitrate their disputes with crop insurance companies according to the rules of the American Arbitration Association (AAA).  However, the arbitration does not have to be handled by the AAA.  Rather, the farmer and crop insurer can select their own arbitrator to hear the dispute, which may save money and provide more control over selecting the arbitrator.  The USDA Risk Management Agency (RMA) recently submitted Bulletin No.: MGR-12-003.1 outlining the following steps for demanding arbitration if the AAA is not elected.

The process is initiated by filing an arbitration demand with the insurance company.  The demand must include a short statement of the facts of the dispute and the policy provisions which the farmer believes provided coverage.  The demand should also include the names and addresses of all parties, the amount disputed, and request the arbitration location.  The insurance company must confirm receipt of the demand.  The farmer and insurance company can then nominate up to 5 potential arbitrators upon which they must agree on one or more of the arbitrators.  If the farmer and insurance company cannot agree on the arbitrator, the arbitration will be conducted through the AAA.  Consequently, the parties should make a strong effort to agree on the arbitrator even if they cannot agree on anything else.

In the end, the arbitration process will mentally feel like 12 rounds.  Therefore, it is important to have the right people working the corner.