Encyclopedia of the Great Plains

ANTI-CORPORATE FARMING LAWS

Corporate farming has long been considered by some to be an economic, environmental, and social threat to family farmers. Advocates of diversified, family-owned and -operated farms point to fifty years of research that indicates that corporate agriculture leads to negative conditions in rural communities, including population decline, lower per capita income, fewer community services, and environmental pollution. During the 1930s, one response to the growth of large corporate farms in the Great Plains was the adoption of laws prohibiting corporations from owning farmland or participating in farming activities. The first such law was adopted in Kansas in 1931, followed shortly thereafter by one enacted in North Dakota in 1932.

In the 1970s other anti.corporate farming laws were adopted in Iowa, Minnesota, Missouri, Oklahoma, South Dakota, and Wisconsin. When Kansas and North Dakota enacted amendments to their anti-corporate farming statutes in 1981, the laws in all eight states became similar in content and form. Beginning in the mid-1970s, several attempts were made in the Nebraska legislature to pass an anti- corporate farming statute, but the efforts failed. As a result, a citizen petition was begun, and in November 1982 Nebraska became the first state to have its anti-corporate farming law placed in the constitution by citizens rather than adopted through statute by a legislature. In 1998 the citizens of South Dakota also amended their constitution through the petition process with an anti-corporate farming law patterned after Nebraska's.

While the anti-corporate farming laws in all nine states contain similar language and a variety of exemptions allowing certain corporations to engage in farming or to own farmland, the laws also differ considerably. For instance, the definition of a family farm corporation, whether the law allows so-called authorized farm corporations, and whether the law prohibits the ownership of livestock as well as farmland are all key issues in interpreting these laws. For instance, in Iowa there are few restrictions on who may qualify as a family farm corporation other than a requirement that 60 percent of the corporation's income must come from farming. But in Nebraska and South Dakota, one of the family members must either reside on the farm or be actively engaged in the day-to-day labor and management of the farm in order to qualify for an exemption.

Debate over the effectiveness and wisdom of anti-corporate farming laws has intensified in recent years as agriculture has become more specialized and concentrated, especially in livestock production. Opponents of anti-corporate farming laws claim the laws limit competition. Proponents of strong anti. corporate farming laws, however, argue that the tax advantages and limited liability available to corporations give them an unfair advantage over individual farmers. Family farm advocates contrast the growth of large, corporately owned operations in states without anti-corporate farming laws with the relative health of family farming in states such as Nebraska that have tough restrictions on corporate farms.

Controversy over anti–corporate farming laws is expected to persist as the structure of agriculture continues to impact the well-being of rural communities throughout the Great Plains.

See also AGRICULTURE: Corporate Farming.

Nancy L. Thompson South Sioux City, Nebraska

Pedersen, Donald B., and Keith G. Meyer. Agricultural Law in a Nutshell. St. Paul MN: West Publishing, 1995.

Stayton, Brian F. "A Legislative Experiment in Rural Culture: The Anti-Corporate Farming Statutes." UMKC Law Review 59 (1991): 679-93.

Thompson, Nancy L. Raising Hogs in Nebraska Legally: A Farmer's Guide to Pork Production under Initiative 300. Walthill NE: Center for Rural Affairs, 1998.