Thursday, June 7, 2018

Agricultural Law Weekly Review—June 7, 2018

Written by: M. Sean High—Staff Attorney
The following information is an update of recent local, state, national, and international legal developments relevant to agriculture:

Antitrust: DOJ Announces conditional approval of Bayer/Monsanto Merger
On May 29, 2018, the U.S. Department of Justice (DOJ) announced that it has granted conditional approval regarding Bayer AG’s proposed acquisition of Monsanto Company.  According to DOJ, approval for the acquisition was granted on condition that Bayer AG divests itself of approximately $9 billion in businesses and assets to the chemical manufacturer BASF.  The required divestments include Bayer AG cotton, canola, soybean, and vegetable seed businesses, as well as the company’s Liberty herbicide business.  DOJ stated that without the required divestments, farmers would have experienced “higher prices, lower quality, and fewer choices across a wide array of seed and crop protection products.” Following DOJ’s conditional approval, Bayer AG asserted that it anticipates that the proposed $66 billion acquisition of Monsanto Company will be finalized on June 7, 2018.  Additionally, Bayer AG stated that following the acquisition, the Monsanto Company name will no longer exists, although the acquired products will continue to carry their current brand names.

International Trade: Mexico Imposes Tariffs on Certain U.S. Agricultural Products
On June 5, 2018, Reuters reported that Mexico has placed tariffs on certain U.S. agricultural products in retaliation to U.S. tariffs being levied on imported steel and aluminum.  According to Reuters, Mexico issued a retaliatory tariff list that included a 25% tariff on certain U.S. cheeses and a 20% tariff on U.S. apples, potatoes, and unprocessed pork.  The report stated that in March of 2018, the U.S. began imposing a 25% tariff on imported steel and a 10% tariff on imported aluminum.  Nevertheless, Mexico, Canada, and the European Union, were provided a two month exemption to the tariffs.  On May 31, 2018, however, Commerce Secretary Wilbur Ross announced that the countries would no longer be exempt from the U.S. steel and aluminum tariffs.  According to the report, Mexico trade negotiators specifically designed the retaliatory tariff list, “in part, to include products exported by top Republican leaders’ states…” Reuters stated that total annual trade between Mexico and the U.S. is currently at $600 billion.

Pesticides: 3 States Sue EPA over Delayed Pesticide Training Materials
On May 30, 2018, attorneys general from New York, California, and Maryland brought suit against the U.S. Environmental Protection Agency (EPA) for delaying the compliance date of EPA’s 2015 final rule entitled: Final Rule, Pesticides; Agricultural Worker Protection Standard Revisions (New York v. Pruitt, Case 1:18-cv-04739).  According to the complaint, the 2015 final rule was intended to provide farmworkers and pesticide handlers with enhanced safety training.  Under the 2015 final rule, compliance was to begin 180 days after EPA published updated pesticide safety training materials.  In December 2017, however, EPA decided to indefinitely delay publication of the updated materials; thereby indefinitely delaying compliance with the 2015 final rule.  The attorneys generals asserted that the delayed compliance is “unjust” because the enhanced safety training is necessary to better protect farmworkers, pesticide handlers, and their families from pesticide exposure. 

Agricultural Finance: FSA Requests Applications for Veteran Farmer Pilot Program
On June 6, 2018, the U.S. Department of Agriculture’s Farm Service Agency (FSA) published notice in the Federal Register of a new pilot program entitled: Veteran Farmer Streamlined Eligibility Pilot Program (83 FR 25640).  According to FSA, the purpose of the new program is to provide veterans with a way to reduce the management experience time requirements for Farm Ownership Loan (FO) Program Microloans or Downpayment Loans.  Currently, to receive a Microloan or a Downpayment Loan, an applicant must have participated in the management of an agricultural operation for at least 3 of the previous 10 years.  FSA currently allows 1 year of service in the military to count towards the management requirement.  Under the new pilot program, participating veterans would have the ability to complete the remaining required management experience time in 12-18 months, as opposed to 2 years.  The application period to participate in the pilot program begins on June 15, 2018, and ends on July 20, 2018.
Agricultural Finance: FSA Reopens Indemnity for Livestock, Honeybees, and Farm Raised Fish
On May 31, 2018, the U.S. Department of Agriculture’s Farm Service Agency (FSA) announced that the on June 4, 2018, the agency will begin accepting disaster assistance applications for losses suffered to livestock, honeybees, and farm-raised fish resulting from natural disasters.  According to FSA, the Bipartisan Budget Act of 2018 made changes to the Emergency Assistance for Livestock, Honey Bees, and Farm-raised Fish Program (ELAP) and the Livestock Indemnity Program (LIP) that included:

·         “Removing ELAP’s $20 million fiscal year funding cap, enabling FSA to pay producers’ 2017 applications in full and their 2018 applications as soon as they are approved”
·         “Removing the per-person and legal entity annual program payment limitation of $125,000 for LIP for 2017 and future years. (The income limitation applies as it did before, meaning producers with an adjusted gross income of more than $900,000 are not eligible.)”
·         “Changing LIP to allow producers to receive a payment for injured livestock that are sold for a reduced price due to an eligible event. Previously, the program only covered financial loss for livestock death above normal mortality”

As a result, FSA has reopened the application period for ELAP and LIP and will accept new applications for losses for calendar year 2017 or 2018.  Interested individuals are encouraged to contact their local USDA Service Center.

From National Ag Law Experts:
Right-to-Farm Law Does Not Protect Landowner from Nuisance Caused by Septage Lagoons, Paul Goeringer, Maryland Risk Management Education Blog, June 5, 2018
Technical Corrections Needed for Qualified Improvement Property and NOL Date, Kristine A. Tidgren, Iowa State University Center for Agricultural Law and Taxation, May 31, 2018

Pennsylvania Legislation:
Environmental Resources and Energy (S)
  • SR 373 Resolution to establish a commission to study pipeline construction and operations (Referred to committee, May 30, 2018) 

Appropriations (S)
  • SB 1171 Legislation to replace Nutrient Management Advisory Board with Farm Animal Advisory Board (Referred to committee, May 23, 2018) 

Agriculture and Rural Affairs (H)
  • HR 948 Resolution calling on the Auditor General to initiate an audit and review of PENNVEST nonpoint source management transactions (Referred to committee, May 31, 2018)
  • SB 792 Legislation regarding labeling requirements for lawn fertilizer (public hearing, June 5, 2018) 

Pennsylvania Actions and Notices:
Department of Agriculture

Penn State Research:

AgLaw HotLinks:

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