Changes to anti-corporate farming law debated: Bill draws support from dairy, pork industry

BISMARCK -- A bill that would partially lift North Dakota's ban on non-family corporate farming drew strong support Friday from dairy and pork producers who said it could help boost their shrinking numbers, and equally fervent opposition from oth...

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Press Photo by April Baumgarten Cattle graze and roam in a pasture on Sept. 1 west of Dickinson. A bill that would partially lift North Dakota’s ban on corporate farming drew debate in the state Legislature on Friday.

BISMARCK - A bill that would partially lift North Dakota’s ban on non-family corporate farming drew strong support Friday from dairy and pork producers who said it could help boost their shrinking numbers, and equally fervent opposition from others who warned it would pit local farmers against outside investors for land.
Sen. Terry Wanzek, R-Jamestown, the lead sponsor of Senate Bill 2351, said it’s patterned after the corporate farming law in South Dakota, which has expanded its milk production since creating a corporate farming exemption for dairy six years ago.
“I believe our farm producers need access to the same business tools that other state’s farmers have to be competitive,” he testified before the Senate Agriculture Committee.
North Dakota is one of nine states with anti-corporate farming laws, and almost all of them allow livestock exemptions of some kind, according to Wanzek and Agriculture Commissioner Doug Goehring.
Goehring testified in support of the exemptions for dairy and swine and said he also favors lifting the ban for beef operations.
North Dakota Farmers Union President Mark Watne said the state’s largest farmer-member organization stands in strong opposition to the bill, calling it unwarranted and a fundamental change to the state’s system of family agriculture.
“We firmly believe individual entrepreneurs should be owning the land and animals in North Dakota,” he said.
The state’s current anti-corporate farming law dates back to 1932. It prohibits non-family corporations and limited liability companies from owning or leasing farmland and ranchland, and from engaging in farming or ranching.
Family corporations and LLCs can have up to 15 related shareholders. The law also contains exceptions for farmer-owned cooperatives and certain nonprofit organizations.
Wanzek’s bill, which is co-sponsored by four Republicans and one Democrat, would allow a non-family corporation or LLC to own and operate a dairy and swine production facility on no more than 640 acres, or 1 square mile.
Bill supporters said the current law hinders access to capital, the biggest hurdle for producers trying to expand, update or start dairy and swine operations, and lifting the ban would bring out-of-state investment to the state.
“The current law causes fear,” said Craig Jarolimek, a pork producer from Forest River in Walsh County. “They say, ‘I don’t want to have that struggle.’ ”
Jerry Messer, a dairy and beef producer near Richardton, said many mineral owners with newfound wealth in western North Dakota want to invest in agriculture, but the law prevents it.
“They’re looking for a home for some of that wealth,” he said.
Opponents said lifting the ban could open the floodgates for corporations to buy up section after section of land, driving up prices with no specifics in the law about when they must put up facilities.
“If we allow outside investors to come in and buy farmland, that’s competition for me that I can’t afford,” said Justin Sherlock, a 27-year-old grain farmer near Dazey.
Michelle Zeisch, who ranches with her husband near Pettibone, said it was low milk prices, not access to capital, which led them to quit the dairy business. She questioned whether multiple branches of corporations would be allowed to buy land and if they would be limited only to in-state or U.S. corporations.
“I don’t think anybody takes better care of the land than the operator-owner,” she said.
Larry Kinev, board chairman of the Independent Beef Association of North Dakota, attributed the “alarming” decline in swine and dairy operations in North Dakota in large part to concentration in the swine industry and loss of dairy processing facilities.
“It is doubtful that amending our corporate farming law will bring back swine processing or guarantee that an aging dairy processing facility faced with costly regulatory upgrades will remain in operation,” he said.
The committee’s chairman, Sen. Joe Miller, R-Park River, said members will take up the bill again Thursday.

Nowatzki is a reporter and Bismarck correspondent for Forum News Service. Contact him at 701 255-5607 or by email at .

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