Corporate Farming Laws a Bad Deal for Farmers

farmerEver since the awful Supreme Court decision in Wickard v. Filburn—a 1942 case in which the Court upheld a New Deal USDA program that prohibited farmers from growing more wheat than the USDA said they could, even if the purportedly excess portion did not enter the stream of commerce—the question of just how much the federal government could meddle in farming (and other non-commerce commerce) has been an open one.

But if the federal government can clamp down on what and how much farmers can farm, state governments are also in on the act, determining even who may farm, and to whom farmers may sell their farms.

The issue is corporate farming: farms owned not by Old MacDonald but instead by a company. Critics paint corporate farms as bigger, sometimes foreign-owned, insular, pollution machines.

"Large chunks of our food are controlled by foreign, multinational corporations who don't have the best interests in mind of U.S. families or family farmers," said Tim Gibbons of the Missouri Rural Crisis Center, in comments to the St. Louis Post-Dispatch in 2015. Supporters, not surprisingly, argue against such characterizations.

Corporate farms buck the pastoral image of the American small family farm—even if most Americans who actually visited the average small family farm in this country would find it larger and far more modern and dependent on technology than they'd expect.

Several states—nine at last check—simply don't permit or severely restrict corporate ownership of U.S. farms and farmland. (These laws are invariably referred to as "corporate farming" or "anti-corporate farming" laws.)

One such state is Kansas, where a farmer was banned under state law from selling his farm to a Colorado company. He and the Colorado company recently sued to overturn the law. The Kansas law, reports Courthouse News Service, "require[es] farm corporations be made up entirely of Kansas residents."

The plaintiffs argue that the Kansas law is unconstitutional because it impermissibly discriminates against out-of-staters who want to engage in farming in Kansas, and because it prohibits the sale of farmland only for the purpose of continued farming (but not, say, for the purpose of erecting condominiums). In the lawsuit, the plaintiffs allege among other things that the Kansas law "provides strong incentives to remove Kansas agricultural land from agriculture[.]" Again—more condos.

As I noted, other states have similar laws on the books.

Missouri, for example, limits foreign ownership of farms to just one percent. That's actually an increase from an earlier law, which banned the practice. A 2004 report detailed how Minnesota prohibits farm ownership in most cases by those who aren't American citizens. Other states are slightly less restrictive. Corporate farming rates in Iowa—where corporate farm ownership is limited by law to companies with no more than 25 shareholders—have risen slowly—by just 11 percent from 2007 to 2012—the Des Moines Register reported in 2014. Only one of about every 12 farms in Iowa was, at the time, a corporate farm, according to the report.

Some suggest corporate farming laws may slowly be on their way out. That would be a welcome development. Selling to an interested buyer—corporate or not—is a right all farmers should have. But it also shouldn't be the only way farmers can profit from their land.

As I describe in my recent book, Biting the Hands that Feed Us—and as others have also described—increasingly strict regulations threaten many small family farms. Big corporations are far better situated to comply with the stricter regulations—and to buy out the small farmer for whom regulatory compliance is a financial impossibility.

"For farmers and ranchers, the freedom to operate is [as] important" as a writer's freedom of speech, wrote Beef magazine's Amanda Radke last year. "In the last eight years, agriculturalists have faced plenty of challenges in that arena as an extremely regulatory administration has slapped plenty of burdensome and unnecessary rules and restrictions on our abilities to grow food in this country."

Wickard taught us that farmers who are restricted from productive farming aren't free. They're no longer farmers, either. Laws that restrict farmers from selling their land to a buyer of their choice also hurt farmers. Hopefully the Kansas farmer's lawsuit will hasten the demise of corporate farming laws.