Friday, October 2, 2015

6 Sure Ways to Make a Family Farm a Failure

Most farms in Idaho are family-owned and operated. Here are some good ways to make a farm fail:

  1. Believing that the farm can financially support any and all family members who want to work on the farm. Farming is a business and expenses cannot exceed cash flows. You must consider whether the business can really support a family member.

  2. Presuming that a conversation is a contract. Statements by Dad that, "If you work hard, this will all be yours someday," or "It's yours when I die," are not enforceable. Get things written down with the help of an attorney.

  3. Ignoring the in-laws or off-farm families. People may be members of the immediate family, but they have to contribute to the business to be compensated by the business. Communicate clear expectations - in writing - to all family members.

  4. Having no business-like meetings. A business is required by law to have at least one annual meeting. At that meeting, the family should have an agenda and review financial statements, discuss goals, make evaluations and review management decisions. Successful businesses meet often. Decisions should be made by voting based upon ownership of the company. People active in the business should be majority owners so that they can legally make decisions.

  5. Forgetting common courtesy. We sometimes treat strangers better then we do family members. It is important to treat family members who work on the farm as respected and valued members of the workforce.

  6. Having no estate plan, transfer plan or buy/sell agreement. Parents do not owe their children a business, but do owe them good morals, an opportunity for an education and legal plans for the estate. Failure to properly transfer management or ownership of a farm is a sure, painful and often expensive path to farm failure.

Success or failure of the family farm ultimately depends on good legal planning and treating your farm like the business it is.

Lance J. Schuster at 12:53 PM No Comments | Post a Comment
Friday, July 1, 2016

Be Sure to Know Your GMOs

There has been a lot of news lately on genetically modified organisms (GMOs), but what exactly are GMOs?
The USDA defines genetic modification as the "production of heritable improvements in plants or animals for specific uses." In short, genetic engineering transfers specific traits, or genes, from one organism into another.
How extensive are GMOs in farming? Soybeans provide a good example. In 1997, herbicide-tolerant soybeans were planted on 17 percent of acreage. That figure has jumped to 94 percent in 2015.
The potato industry is following suit. J.R. Simplot hopes to have a variety resistant to the Irish potato famine pathogen ready for commercial production by 2017.
Many wonder, with such explosive growth what is the government doing to ensure these crops are safe?
Genetically modified crops fall under the offices of the USDA, EPA and FDA. These agencies have shared responsibility to make sure crops are safe. The USDA's Animal and Plant Health Inspection Service tests to make sure GMO crops do not pose a "plant pest risk" to the environment through field trials and certification programs. The EPA's Biopesticides and Pollution Prevention Division checks to make sure that pesticide resistant plants are tested and fall within tolerance limits. The FDA then tests the food or feed to make sure it is safe for human and animal consumption.
The state of Idaho also places restrictions on GMO crops entering the state. The Idaho Department of Agriculture maintains a database of USDA-approved GMO crops that have entered the state. The law requires that people wishing to bring GMO crops into the state to first obtain a permit.
Botton line, Idaho farmers are using GMOs to compete in today's market. Check the law and obtain a permit before bringing new GMOs into the state.
Lance J. Schuster at 12:26 PM No Comments | Post a Comment
Friday, June 10, 2016

What To Do With a Neighbor's Tree

The neighbor's tree branches come across the property line. The suckers from their poplars are coming through the lawn. Their leaves seem to fall in your yard, but not theirs. What is a landowner to do?
Idaho adopted the common law of England when it became a state. The common law is that part of English law derived from judicial precedent, rather than statutes.
Under the common law, a property owner could cut off at the property line the limbs of a tree that are on a neighboring property. If the roots of a tree penetrate neighboring land the neighbor may dig them out. However, a property owner has no duty to prevent the limbs or roots of a tree from crossing over onto an adjoining property.
When trees are located on the boundary between adjoining property owners, they are treated as being jointly owned by the property owners. If the adjoining property owners cannot agree on the trees, a property owner may still bring a nuisance action if the trees constitute a threat or pose a potential harm.
For example, a tree on a common boundary whose roots exert sufficient pressure on a home's basement walls to push the walls inward may be entitled to remove the tree at their own expense since it is a nuisance. Lemon v. Curington, 78 Idaho 522 (1957).
As for the leaves - you get to rake them whether they are yours or the neighbors!
Lance J. Schuster at 11:11 AM No Comments | Post a Comment
Friday, May 6, 2016

Coming up: The Transport Rule

Almost all food that we buy in the grocery store is transported either by truck or rail.  The Food Safety Modernization Act (FSMA) will soon require that vehicles and transporation equipment be suitable and cleanable to assure the safe transport of food. 

This new transport rule applies to shippers, receivers, loaders and carriers who transport food in the United States by truck or rail.  It also applies to shippers in other countries who ship food to the United States.  The transport rule establishes requirements for vehicles and transportation equipment, transportation operations, records, training and waivers.

Measures that must be taken to assure the safe transport of food include adequate temperature controls, preventing contamination of ready-to-eat food from touching raw food, protection of food from contamination by non-food items in the same load or previous loads, and protection of food from cross-contact with food allergens.

Shippers, receivers, loaders and carriers will require training in sanitary transportaiton practices, and documentation of the training. 

Transportation activities performed by a farm are excluded by the transport rule.  In other words, transporting grain from the farm in a truck, or live animals to a sale, will not reuiqre compliance with the transport rule.   However, farms are still subject to other rules that prohibit the holding of human food under insanitary conditions.

Companies that ship food, or carriers of food, should be aware that the entire food chain is changing with an emphasis on avoiding hazards that may lead to unsafe food.

Lance J. Schuster at 11:08 AM No Comments | Post a Comment
Friday, April 1, 2016

Pink Diesel: For Farm Use Only

We have come a long ways from the days when our grandfathers used horsedrawn plows and wagons.  We still rely on horsepower to get our farming done, but it is the motorized horses that plow the ground, harvest the wheat, and bale the alfalfa.  Most of our tractors, combines, and swathers are powered by diesel engines.

Under the law unlicensed farm vehicles that are not used on public roads may use dyed diesel, also known as farm diesel.  Dyed fuel is exempt from state and federal fuel taxes and is cheaper than diesel fuel purchased at most fuel stations.  (The state tax on diesel is 32 cents per gallon and the federal tax is 24.4 cents per gallon).

Dyed diesel fuel often looks pink or red due to the added dye used to distinguish it from regular diesel fuel.

It is illegal to used dyed diesel fuel in licensed trucks or automobiles that drive on public roads.  Since fuel taxes are used to build and maintain roads, illegal use of dyed fuel denies the government of taxes needed for roads.

It is a misdemeanor to improperly use dyed diesel fuel.  In addition to criminal penalties, there is a civil penalty of $250 for misusing dyed diesel.  A second offense will cost $500, and $1,000 for each offense thereafter. 

The Idaho legislature is currently considering increased enforcement actions to catch those who may be breaking the law.

Be aware of the law when fueling up your truck or tractor, and know when you can use pink diesel.


Lance J. Schuster at 11:04 AM No Comments | Post a Comment
Friday, March 4, 2016

Parsing Out a Bundle of Sticks

Owning real property is like owning a bundle of sticks.  Each stick represents an individual right.  One or more sticks may be given away or transferred to another.

For example, a stick may be given to the County for a roadway.  Another stick may be given to the power company for electric transmission lines.  A neighbor may have an easement for a utility line, airplanes have the right to fly overhead through airspace, and the bank may have a mortgage on the property.  These are all examples of rights in property that are held by someone other than the owner of legal title to the property.

Many farmers and ranchers have chosen to give their development rights to a land trust.  Those development rights are simply sticks in the bundle of land ownership.

Those development rights have value, and are typically called a "conservation easement."  By giving away development rights a farmer or rancher preserves his or her farm from future development, reduces its value so as to avoid estate taxes, and earns an immediate valuable tax credit.

For example, Farmer Jones who earns 50% or more of his income from farming or ranching is entitled to deduct 100% of a conservation easement from his Adjusted Gross Income.  A conservation easement on a 150 acre farm valued at $5,000 per acre results in a $750,000 tax credit.  Any unused portion carries forward for 15 years.  If Farmer Jones makes $50,000 per year from his farming, he will owe no taxes for the next fifteen years after granting a conservation easement. 

Farmer Jones will be able to continue to farms his ground, reduce or eliminate income taxes, and because of the reduced value of his property, preserve his farm property for the next generation.

All because of a bundle of sticks.

Lance J. Schuster at 10:53 AM No Comments | Post a Comment
Friday, February 5, 2016

Know What's Required Under a Farm Lease


A leasehold is an estate in real property.  The law recognizes a leasehold as a right to the use and occupancy of real property for an agreed length of time.  Typically a leasehold is created by signing a written lease agreement.  The lease agreement will usually include terms such as a legal description of the property being leased, the amount of rent due, the timing of the rent payments, the responsibilities and duties of the landlord and the tentant, and the term of the lease.

Farmers and ranchers typically will lease property for a term of at least one year.  It may take a year to prepare soil, plant a crop, fertilize, irrigate, and then harvest the crop.  For a crop like alfalfa it will be common for a farmer to lease land for a term of several years since the initial investment of buying alfalfa seed and planting alfalfa is high. 

The law recognizes that farmers and ranchers often hold over and continue to farm following the expiration of a lease.

When a farmer or rancher has possession of agricultural land and has retained possession of the land for more than sixty (60) days after his lease term has expired, and where the landlord has failed to demand possession or give notice to quit the property, the tentant is entitled to hold the property under the terms of the original lease for another full year.

This law protects a farmer tenant who may have completed fall work on the property anticipating that a new lease will be signed for the next year.  It also protects the farmer tenant whose lease has expired, but who plants a crop in the fall anticipating a harvest the following summer.

A wise landlord will make sure that all leases are in writing, and will give written notice to quit at the conclusion of a lease term.  An astute tenant will understand his rights before doing fall work or fall planting.


Lance J. Schuster at 10:50 AM No Comments | Post a Comment
Friday, January 1, 2016

The Curse and Blessing of Wildlife


We are blessed in Idaho with an abundance of wildlife.  Herds of deer and elk are often found wintering at lower elevations.  Moose wander down from the mountains into the valleys looking for food.  Ducks and geese land in grain fields looking for an easy meal.  Bears, lions, coyotoes and wolves are always looking for an easy meal.

All of this wildlife can be a headache for farmers and ranchers. Wildlife knows no boundaries, and moves easily from public to private property. Farmers and ranchers can face finanical ruin if big game animals eat all the hay that a farmer worked so hard to bale and stack, or if predators kill livestock.

With a few exceptions it is illegal for farmers and ranchers to shoot or harass wildlife that has entered upon private property.  A farmer or rancher can shoot an elk or a deer that is on his property if he has a license and a tag and is otherwise harvesting an animal during a lawful hunting season.  The Idaho Department of Fish and Game also conducts special depredation hunts to relieve big game damage problems in agricultural areas.  These hunts are typically held on short notice, and in small areas, to relieve a farmer or rancher from a problem.

In addition, farmers and ranchers can legally shoot without a permit a predator, like a black bear, mountain lion, coyote, or a wolf, that is molesting or attacking livestock.  In regard to wolves, "molesting" specfically includes the actions of a wolf that are annoying, disturbing, or persecuting, especially with hostile intent or injurious effect, or chasing, driving, flushing, worrying, following after, or on the trail of, or stalking or lying in wait for, livestock or domestic animals.  The law requires that farmers and ranchers notify Fish and Game of lions and wolves that are taken while molesting or attacking wildlife.

Farmers and ranchers may also obtain relief from critters like beavers and muskrats that are interfering with water rights or damaging ditches.

 Wildlife is yet another variable that can affect farmers and ranchers.  Know the law and protect your property.


Lance J. Schuster at 10:41 AM No Comments | Post a Comment
Monday, November 9, 2015

Concentrated Animal Feeding Operations

Many in Eastern Idaho have a small herd of cows on pasture ground.  However, special rules apply in Idaho to concentrated animal feeding operations, or "CAFOs." 

A CAFO is defined in Idaho as a lot or facility where beef cattle, or dairy cattle, are confined and fed for forty-five (45) or more days during any twelve month period in an area that doesn't produce vegetation during a normal growing season over any portion of the facility.  A feed lot or a dairy operation are examples of a CAFO.

A CAFO is required by law to to have wastewater and storage containtment facilities.  These wastewater facilities trap manure and water from the feeding operation.  They are required to be built according to engineering standards, and must prevent manure and wastewater from entering into lakes, streams, rivers and groundwater.  They must be designed such that they are able to hold a twenty-four (24) hour rainfall event, or three inches of runnof from the accumulation of winter precipitation.  No other materials or waste may be disposed of in a containment facility.

Also required is a nutrient manangment plan.  Such a plan must address: (a) proper managment of dead animals, (b) ensure that clean water is diverted from the production area, (c) prevent direct contact of confined animals with rivers, streams and lakes, (d) ensure that chemicals on-site are handled properly, (e) identify appropriate conservation practices, (f) identify protocols for testing of water and soil, (g) identify protocols for applicaiton of manure and wastewater to land, and (h) identify records that will be kept to assure compliance with the nutrient managment plan.

The Director of the Department of Agricutlure is authorized to inspect animal feeding operations to insure compliance with the rules.  The Director may file an administrative enforcement action and seek civil penalities for those who are not in compliance.

If you are confining and feeding animals, you may may be subject to the special rules for CAFOs.

Lance J. Schuster at 8:51 AM No Comments | Post a Comment
Wednesday, September 16, 2015

Food Safety's the Law

Federal authorities have recommended that the owner of Peanut Corporation of America spend the rest of his life behind bars.  The owner, Stewart Parnell, was found guilty of 71 criminal counts after his company distributed salmonella contaminated peanut butter that killed nine people and sickened some 900 others.  Parnell is slated to be sentenced in September in federal court.

Food safety is the law.  The owner, operator, or agent in charge of a domestic or international food facility is required to develop a safety plan for any food facility that is subject to FDA regulation to assure that food sold or distributed by that facility is safe for conusmers.  An owner or operator who fails to do so can subject themselves, and his or her company, to fines and prison. 

More importantly, a food safety plan assures that food distributed by a FDA regulated facility does not sicken or kill consumers.  (Dead or sick customers are never good for business – just ask Blue Bell Creameries).

A food safety plan must be a HARPC plan.  HARCPC stands for “Hazard Analysis and Risk-Based Preventive Controls.”  A HARPC plan identifies food safety and adulteration risks associated with foods and processes, it implements controls to minimize the risks and verify that the controls are working, and it designs and implements corrective actions to address any deviations from the controls that might arise.  Everthing that takes place as part of a HARPC food safety plan must be properly documented and must conform with FDA standards

There are certain exemptions for very small businesses, but most food will originate in or come through facilities that are subject to the requirement of having a HARPC based food safety plan.  Companies must create their HARPC plan, update it as required by law, and produce the documentation to the FDA upon request.  It’s required, and its good business.

Lance J. Schuster at 10:14 AM No Comments | Post a Comment