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At one time, a John Deere B or a Farmall M was a pretty big machine that could, in machine shed “honk the donkey” and do a lot of work for a farm operation. Now, they are regulated to parade duty, augur power or maybe raking hay. The equipment keeps getting bigger.

Drones are going to get bigger. The proof of concept for application of fertilizer and chemical to selected areas of the field via air delivery is bearing fruit. Small drones are already in service. Much like tractors, they are going to get bigger.

The question is are we going to regulate drones to orderly lines like the Jetsons cartoon from yesteryear or is it the wild west. Obviously, straight-line to and from locations cut down on costs. Our legal framework is not really “sky aware.” The last real US supreme court case on how far your property rights go into the air for exclusive control is about 400 feet (adjusting a World War 2 era fly over dispute). Other property rights are likely impacted, like the right to sun light and what happens if that is interrupted (not only because we humans seem to enjoy access to the sun but also, solar panels are implicated). If a large drone can hover over your house at 450 feet and block out the sun for an hour or two while small drones deploy to deliver feed, fuel and chemical, a non-farm operator might take issue with that.

The courts are the last place you want to develop law, we have a whole other branch, the legislative branch, for that. Unfortunately, it seems to be interested in regulating personal conduct, conducting sham inquiries, and spending on pet projects rather than pro-actively addressing the looming drone debate.

Busting up the SwampBuster

Holdings (an Iowa corporation that is styled a family owned farm corporation with 1075 acres in Iowa) filed a federal law suit over 9 acres in Delaware County, Iowa that is designated as a swampland. Back in the mid-1980s, a Swampbuster provision was enacted that essentially bars farmers from draining wetlands if they want to any government price supports , loans, or other USDA payments and crop insurance. Swampbuster’s twin brother, Sodbuster also entered the scene at the same time.

The wrinkle is, the farm operators didn’t get paid anything for this sudden idling of land. Yes, a provision to get things “not swampy” existed if you can show it was farmed at one time. Sometime, developers who aren’t worried about farm payment drain those wetlands anyway and buy wetlands developed elsewhere to “offset” the drained ones. So, the farmer gets nothing for ground as they can’t put it to use that if a developer had, has value. The Pacific Legal Foundation, which is a leader in the realm space of challenges to governmental environmental regulation of ag (see further the waters of the United States never ending struggle) is backing the plaintiffs. They make the claim that this denial of the land use without compensation runs afoul of one of the things that is so irritating the founding fathers wrote it down in the first System Update to the law of the land (that’s Bill of Rights for you non tech users). The 5th Amendment says if the government takes your property, they can, but they have to pay for it. Further, the lawsuit says that the laws around Swampbuster exceed the type of law that Congress can even make.

In this case, it appears the offending acres are not visibly wet and are 1000 feet or so away from a stream. The operator applied to the NRCS to have it removed as a wetland and the government declined.

The post Swampbuster world is not a straightforward one, sometimes wetland determinations were done and sometimes they were not. Depending on when a determination was done and if you have the paperwork to back it up, you may have a different outcome than somebody who has no paperwork or who had the determination done at a different rate.

Rest Assured good readers, Ag Law remains more viable than abacus manufacturing law and will continue to for the near future.

The Ag Secretary (Iowa’s own former governor Vilsack) lashed out at a budget proposal that is backed by the majority of the house republicans as a radical attack on USDA safety net programs.

The floated 2025 budget would gore ox in many a sector of the government, and the USDA would be no exception. First, farmers that have adjusted gross income of $ 500,000 of would see payment limitations, which is currently at $900,000. It also calls for a hard cap total on subsidies at $40,000.00. Next, it calls for increasing the cost of crop insurance by decreasing the amount of that premium that the government picks up by about 14%. The budget dream also halts CRP, CSP, technical assistance by the NRCS, and trade promotion programs. What is doesn’t address is complex business structures developed to work around those payment limitations that essentially allow large operations with the funds to spend on the legal work the ability to avoid those limitations.

Interesting enough, data suggests that 12 percent of farms make over $250,000 in market revenue but receive over 60 percent of all farm payments. This does lend to efficiency, as the big get bigger (equipment and farm income both). I am curious of that 12 percent is after section 179 and bonus depreciation is factor back out to show actual income.

The reason for all the programs on the cutting room floor, elimination of the estate tax. Interestingly enough, of the 31,000 farmers who died in 2020, only 189 paid any estate tax and of those 50 paid 130 million in estate tax, which transferred $56 billion to the next generation. By the way, the depth of the estate tax is at a historic low. Only 8 out of 10,000 deaths (not just farmer deaths) pay any estate tax. That’s .08%.

So, to sum it up, the proposal makes farming more risky, stops preserving fragile lands from being used for short term production ag at the expense of long term soil health and stops engaging with new trade partners for farm products so the ultra-few, who are likely not farmers can transfer wealth without tax.

The fun part of this posturing is that those same budget hawks are likely to be the first to line up with bills to help their states out on an ad hoc basis when disasters strike.

To be clear, I had heard the jokes about farmer’s caps are curved because they look in the mailbox for checks so much. I have also long believed that stable, cheap food commodities are a wonderful policy for domestic and international uses. The use of farm program safety nets to shift risk to the taxpayer instead of the farm producer is intentional. No private company is going to write crop disaster insurance let alone enough companies do so to create a capital backed marketplace of reasonable costs. All businesses have government risk shifting from oil companies having favorable exploration tax treatment, to low-cost SBA loans in many market sectors and research incentives and credits. To attempt to single out the ag industry as a government cheese eater is not accurate, all businesses dine at the trough of the government’s largess.

The question is, which mice are getting fat and which ones are being left for carving knife.

Kicking the Can down the road.

As predicted, Congress continues to avoid controversy during an election year. They have kicked the can down the road on the Farm bill through 2024. I am sure the extra months will be well spent in careful contemplation…. Or campaigning. The proposed budget released by the White House shows a 7.4% increase that is pretty much a symbolic gesture. Of note, in the state of the Union, the farm bill didn’t get a shout out like Ukraine or the border.

Everybody following Iowa.

Over 50% of states now have a ban on foreign ownership of ag land. Iowa has had one for years. It’s nice to be a leader once in a while.

FINCEN BOI runs into problems.

As of 1 Jan 2025, all state level incorporated entities (Corps, LLC, LLP, ect) need to have certain information turned into the federal government about who is in charge and who owns them. This law was challenged and declared void by a federal judge in the South. That is 1, not surprising, and 2, not likely to survive appellate review.

Of note, now that same regulator body is contemplating a rule to require all state level real estate sales to report to the federal government the who, what, when and how of real estate transactions. We already have to report to the IRS taxable sales and pick it up on our income tax returns. This additional rule seems like more federal overreach. I think maybe the folks in DC could be reminded that that they are a limited government, not a limitless one.

EPA say spray’em if you got ‘em.

Farmers can use existing diacamba stocks following a 6 FEB US District Court ruling for over-the-top application as long as they were labeled prepared and released for shipment prior to 6 FEB 2024 and the farmer follows that label rule.

Quick bits.

Just a few things as I approach twenty years of practicing law. Some are corrections and some are just observations.

It’s quit claim, not quick claim when it comes to deeds.

Fair does not mean equal, never has and never will. (Also, Fair is what happens mid-August in DSM, not in a will).

The right to remain silent should not be confused with the ability to do so.

Giving all kids equal shares is a great way to have your last name become a farm name in somebody else’s yield monitor.

” this is how everybody does it” when it comes to closing and who pays for what in a real estate transaction varies by zip code.

You do own the property, even if it is mortgaged to bank.

In the end, you are thinking about what other people think more than the other people are really thinking about whatever it is you are concerned about.

The estate planning that your friends do is not always the estate plan that works for you.

Generally, everybody gets along until Mom and Dad dies… everything after that is optional.

A warm hand now is better than a cold hand from the grave.

The sign of a good deal is that nobody is 100% happy.

The minute you leave the bargaining table and step into the court room you transfer the power of decision and control from you to a robe or some folks in a jury box who don’t want to there.

Your inability to tell your children what they need to hear about your estate will ensure they will not listen to their siblings about it either.

If you know your case is going to the Federal Supreme Court and you can only have the best in one phase of the case, it’s the very first contact that will set the tune that everyone else has to dance around and through.

No plan survives initial contact with in-laws, outlaws and angry relatives.

Nothing says I love you quite like a Prenup.

Taxes, change, and death are the only constants in our lives.

In Iowa, even if you are a confirmed spinster or bachelor, you can participate in a divorce of sorts. No , not talking about common law marriage (which is a thing in Iowa, but no, it isn’t based on years of cohabitation), we are talking about real estate partition actions.

When you inherit property or buy property with someone else, you don’t have to keep owning it with them. You can ask the court to split it up. Starting in 1943 and until about ten years ago, the court took a real simple position in most matters, sell it and split dollars was the preferred solution. Shazam. Even if the majority of other states didn’t roll like that.

The Iowa legislature, in their never-ending fondness for farms, reset the rules and now parceling out the land in parcels to each is the starting point if the land ownership came from family members. Special rules now come into play when the co-owners are relatives, and they received the property from a relative (living or dead) and no prior agreement binds the co tenants to how they will divide up the ground.

That means lawyers for the owners, a referee (who could be another lawyer or a real estate agent) and an appraiser are all going to skim a fee out of the land in one shape or another. Just like a divorce, “what’s fair” is in play with the court’s decisions. Similar to a custody evaluator, the referee makes a recommendation to the court on how to split the land which may or may not make one or more of the parties happy or angry and bitter for days on end. The parallels to family law can’t be overlooked.

The code goes on to lay out special provisions unlike most court cases, with decrees required at various stage to determine if the dirt is special family dirt, or if it is not. Then a referee and appraisal have to be had and then a fair market determination has to be made. This all takes time. The trend seems to be towards the referee having to rent the property out for one or more growing seasons while the parties duke it out with competing appraisals and proposals.

The current court scheduling system largely is not equipped to handle the special timing and decrees required. Each court district has a different take on scheduling these matters, it is not a simple as a picking a day on the court calendar and duking it out with your brother and sister over who gets Grandma’s orchard and who gets stuck with Uncle Fester’s swamp pond. The Iowa Supreme Court is spending a lot of time sorting out the new law change and how it is to be applied. Recently it determined that a trust set up in a will with a division protocol was a binding agreement that precluded the use of the statute to divide the court. The Court of Appeals has also weighed in saying a combination of sale of land and allocation of parcels is acceptable. Getting these courts to give their opinion on the law takes yet more time, and lawyers and dollars.

As a result, parties itching to pick a fight with co-owners would be wise to consider finding an agreement that suits all the various parties. The sign of a good agreement is that no body is entirely happy or entirely honked off.

Again, the parallel universe of divorce court is looking at the dirt and same welcome to the mudslinging.

Saturday, July 13, 2024
  • Patrick B. Dillon
  • Jill Dillon
  • Tori Beyer
Dillon Law PC
Patrick B. Dillon enjoys finding solutions to legal issues and catching problems for clients. Pat practices in the Sumner office regularly represents clients in district, associate district and magistrate courts for agricultural, real estate, criminal and collection issues. He drafts wills and trusts, creates estate plans and helps clients through the probate process.
Dillon Law PC
Jill is a University of Northern Iowa undergraduate (Political Science Cum Laude) and a Drake University Law School graduate. Jill is a firm owner but not currently accepting private pay clients. Jill still has ties to her family farm operation which includes a dairy herd.
Dillon Law PC
Tori is a University of Iowa undergraduate where she double majored in Criminology, Justice, and Law and Ethics and Public Policy and a North Dakota Law School graduate. Tori practices in the Sumner office. Tori's areas of practice include but are not limited to estate planning, wills/probate, criminal defense, and civil litigation.

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