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Growing Michigan - Michigan Agricultural News - September 2012

Disaster Loans Available To Help Recover From Drought

Federal economic injury disaster loans are now available to those impacted by the drought in Berrien, Branch, Cass, Hillsdale and Saint Joseph counties. According to the U.S. Small Business Administration (SBA), the loans are available to small businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private non-profit organizations of all sizes located in those counties. 

The SBA’s Economic Injury Disaster Loan program is available to eligible farm-related and nonfarmrelated entities that suffered financial losses as a direct result of this disaster. Loan amounts can be up to $2 million, with interest rates of three percent for non-profit organizations and four percent for small businesses. The SBA determines eligibility based on the size of the applicant, type of activity and its financial resources. The agency sets loan amounts and terms based on each applicant’s financial condition. Applicants may apply online using the Electronic Loan Application (ELA) via SBA’s secure website at https://disasterloan.sba.gov/ela.

Proposed Changes to Wetland Program Will Hurt Farmers

On August 15, 2012, the Wetland Advisory Council issued its final report on Michigan’s wetland program. The Council unanimously believes that Michigan should continue to administer the Clean Water Act Section 404 Program and acknowledged that certain changes to Michigan’s wetland statute must be made in order to do so. One such change would be to eliminate most of the farming exemptions that exist under the current statute. To be consistent with the federal wetland program, the statute must prohibit farming activities in wetlands unless such activities had taken place prior to 1979. The current statute, as interpreted by the Michigan Supreme Court, does not contain such a prohibition. 

The Michigan Department of Environmental Quality has helped draft proposed amendments to the statute to implement the changes referenced in the Wetland Advisory Council report. A bill is expected to be introduced in the Michigan legislature when it returns to session in mid-September. If the legislation is adopted, farmers would need to obtain a wetland permit before they could farm in regulated wetlands. Obtaining a permit can often be time consuming and expensive, but a bigger problem comes from the requirement to replace impacted wetlands with newly created wetlands at a ratio of at least 1.5 acres of new wetland for every acre of wetland impacted. While converting a 40 acre field of regulated wetland to productive farmland may be economical today given current and expected crop prices, the cost to create 60 acres of mitigated wetlands would likely exceed the profit expected from such new farming activities for many years. 

Crop Insurance Will Pay On Drought-Damaged Crops

Victims of drought might be eligible for crop insurance indemnity payments if they take the right steps. According to Jan Eliassen—a private risk management education consultant for the USDA’s Risk Management Agency—policyholders should contact the crop insurance company that sold the policy before putting their crop acres to another use by harvesting for silage, diverting irrigation from the crops or by abandoning the acres. 

Producers should give damage notice within 72 hours of discovering the damage, which can be tricky when damage is due to developing drought, Eliassen said. Producers must provide the damage notice no later than 15 days after the end of the insurance period, even if the crop has not been harvested. Producers also must continue to care for and maintain crops that have been damaged and will be taken to harvest. 

Farmers Pleased with Changes to Trucking Rules

Michigan farmers and others who operate trucks and trailers with load capacities less than 26,001 pounds will no longer need to meet certain regulations in transportation law.

Under the new law, farmers hauling loads that are under 26,001 pounds within Michigan’s borders are exempt from rules that apply to interstate truckers and long-haul commercial rigs. This means they no longer need annual inspections, post-trip inspections, service logs and drug and alcohol tests. Standard safety provisions such as keeping up equipment standards, load securement, properly working brakes and lights remain in place. 

Obama Calls on Congress to Pass Farm Bill

Earlier this month, President Obama called on Congress to pass the stalled five-year farm bill, calling it the single best way to help rural communities recover from this summer’s historic drought. Despite months of urging, House leaders were unwilling to bring up a five-year bill passed by the House Agriculture Committee, with the proposed $16 billion in cuts to food stamps seemingly the biggest sticking point. Democrats oppose the cuts, while Republicans say the bill needs more cuts throughout. The House did pass an emergency drought relief bill, which would have extended livestock and treegrower disaster aid programs that expired in 2011, but the Senate declined to take up the measure. For their part, the Senate passed their own farm bill in June, with $23 billion in proposed cuts, including $4 billion from food stamps. The Senate and the House of Representatives will both return to session on September 10; the current farm bill is set to expire September 30.

Stabenow Calls for Finalized Commodity Trading Rules

Sen. Debbie Stabenow is urging the nation’s chief financial regulators to implement the Wall Street Reform and Consumer Protection Act. Stabenow, chairwoman of the U.S. Senate Committee on Agriculture Nutrition and Forestry, said at a recent oversight hearing that failures of firms like Peregrine Financial Group and MF Global, as well as trading losses at JP Morgan and the ongoing LIBOR scandal, all emphasize the need to implement the bill, which was passed by Congress more than two years ago.

Scope of Right to Farm Act to be Clarified

Varnum hosted an Ag Law Roundtable with the Michigan Agri-business Association in June, and one of the issues discussed was the scope of the Michigan Right to Farm Act, and specifically, whether it indeed protects small farms in non-ag areas. There is court precedent, for example, that allows chicken farming in areas not zoned for livestock agriculture. According to Wayne Whitman, the environmental manager for MDARD, revisions are underway to the GAAMPS for site selection of livestock production facilities, which would broaden the definition of a “livestock production facility” to include all livestock facilities, not just those of significant size (as the GAAMP now reads). This will be a significant revision because the GAAMPS prohibit livestock production facilities in areas not zoned for agriculture, so if a farm were to be sited in such an area, it would not be compliant with GAAMPS, and therefore not protected by the Right to Farm Act. A copy of the proposed revision is available on the MDARD website.

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© 2021 Varnum LLPNational Law Review, Volume II, Number 265
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Varnum attorneys have practical experience serving the needs of agricultural producers, food processors and their suppliers. Our team approach provides expertise in each legal area while ensuring that clients also have available to them the full resources of the firm. We provide a broad range of services related to legal issues facing agri-businesses and have developed expertise in the following agricultural-related areas: Corporate -- business acquisitions and financing; entity formation and organization; contract matters Real Estate -- facility siting, construction and expansion; zoning...

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