Senate votes to ease corporate farming ban for dairy, swine operations
By Mike Nowatzki Forum News Service BISMARCK -- Senate Republicans passed a bill Friday that backers hope will boost North Dakota's struggling dairy and swine industries by partially lifting the state's anti-corporate farming law. Senate Bill 235...
By Mike Nowatzki
Forum News Service
BISMARCK - Senate Republicans passed a bill Friday that backers hope will boost North Dakota’s struggling dairy and swine industries by partially lifting the state’s anti-corporate farming law.
Senate Bill 2351 was approved 27-18 after lengthy debate, with all 14 Democrats present and four Republicans voting against it. It now goes to the House.
“Both these industries need our support before they’re lost altogether in North Dakota,” said Sen. Joe Miller, R-Park River, chairman of the Senate Agriculture Committee, which had voted 4-2 along party lines to recommend the bill’s passage.
North Dakota is one of nine states with anti-corporate farming laws and the only state without a livestock exemption, supporters said.
The bill would allow a non-family corporation or limited liability company to own and operate a dairy or swine production facility on no more than 640 acres, or 1 square mile.
Sen. Terry Wanzek, R-Jamestown, a farmer and the bill’s lead sponsor, said the “small exemption” would be similar to laws in Minnesota and South Dakota, which have seen dairy production grow as North Dakota’s has dropped by more than 40 percent since 2002.
Wanzek said few family farmers want to take on the financial risk and labor demands of starting a dairy without assistance, and the main barrier is lack of access to equity capital that corporations could provide.
“We’ve tried everything, and our dairies continue to freefall in numbers where we will not have a dairy industry if we wait much longer,” he said.
The state’s current anti-corporate farming law dates back to 1932 and bars non-family corporations and LLCs from owning or leasing farmland and ranchland or engaging in farming or ranching. Family corporations and LLCs can have up to 15 related shareholders.
Sen. Tom Campbell, R-Grafton, said farmers are unfairly singled out by not having access to capital through corporations as other industries do.
“It’s not the big, bad outsider. He’s actually in many cases going to help the family farm and keep the farmer on that land managing his own farm,” he said.
But Sen. Jim Dotzenrod, D-Wyndmere, questioned whether easing the corporate ban would make a difference for dairies. He and other opponents noted the nation’s dairy consumption is on the decline.
“The problem is lack of profitability, and I don’t see corporations moving into places where it’s hard to make money,” he said.
Sen. John Warner, D-Ryder, who voted against the bill in committee, said the issue needed more deliberate study before making such a drastic change. But his amendment for a legislative management study failed 16-29.
Miller said the issue has been discussed in the Legislature many times before. He said the request to change the law came from the dairy and swine industries, as well as corn and soybean producers and feedlot owners, all of whom he said are interested in expansion.
“It should not be our directive to determine how a business should organize,” he said.
Miller also tried to allay opponents’ concerns that the change will allow corporations to buy farmland and let it sit idle, or gobble up multiple sections to feed a single dairy.
“They must place the facility on that land,” he said.
The North Dakota Farmers Union, the state’s largest farmer-member organization, is among those opposing the bill. Individual farmers also testified against it, raising concerns it could force them to compete with outside investors for land.
At the request of Sen. Tim Flakoll, R-Fargo, senators voted separately on the dairy and swine exemptions, passing both before approving the bill as a whole.
Republicans voting against the bill were Flakoll and Sens. Randall Burckhard of Minot, David Rust of Tioga and Donald Schaible of Mott. Sen. David O’Connell, D-Lansford, and Sen. Lonnie Laffen, R-Grand Forks, were absent.