So, three pipelines are proposed in Iowa to move carbon dioxide from ethanol plants to a storage facility. The idea is that captured CO2 is better than released CO2, making ethanol more environmentally friendly and a “greener” product. Good idea until you realize you have to build a giant pipe to move it to a captured facility. Instead of treating the CO2 on site with scrubbers or buying land from willing owners to put the pipeline in, the pipeline company is invoking the state’s power to take private property for public good. The pipeline company is selling itself as a “bus route” for other private companies to pay to move its CO2 from location a to b. They will just charge a “fare” to enter and exit the pipeline, like a toll way really. The problem is, the majority of the route is through Iowa farm ground that is owned by folks who remember the hollow promises of cooperation and compensation from prior pipeline projects. From a policy point, if you were told a private road was being built over your property and the private road company got to charge what ever it wanted to now and in the future, would you rather own part of that company or just get a one time payment for putting the road in ? The proposed easement is a one-time payment.
Without a doubt, the pipeline install will disturb soil, make it less productive and impair the value of the property now and into the future. The question is can the landowner get enough out of the company in hard concrete terms to compensate them. The free-flowing federal money for “green” projects makes it hard for states to stand in the way. While the state appears to not be concerned, it would appear local county and city governments and private citizens are concerned about the end result. Also, in the end, nobody will see the pipeline once it’s punched in and a few election cycles later it will be only those directly impacted that remember exactly where the pipe was shoved into the ground anyway. The Federal precedent is on the side of the pipeline, as a public good is not that difficult of a showing. While we have seen other long standing legal precedent overturned recently (Roe, Planned Parenthood vs. Casey), I don’t see the Kelo decision (which sets the bar for public use to allow the taking) going away anytime soon. The best course of action is likely to spend your time and effort ensuring that whatever the easement deal that is presented and agreed to is clear, easily implemented, leaves little decision making in the hands of the pipeline company and when or how to pay, and has provisions to ensure that the pay scale keeps up with the economy.
No King, No Crown
A popular joke is running around the internet where it starts with Tell these two images apart. The first is the phrase Most Farm Succession Plans in Action and the second is a picture of the Queen of England with the phrase 96-year-old dies, leaves 73-year-old in charge.
The response is, they are the same. The other joke is that the dad tells the kid he did a nice job planting and selecting the seed last year so this year he gets to combine, and the kid responds, sounds good, but I have an appointment to sign up for social security we will need to work around.
In both cases, it’s funny because it is all too often it’s true, painful as it is. Many ag operations, because of timing or control or lack of trust, deal with this scenario. Now is a great time to examine your operation and see if you are holding back your prince or princess from ascending to the throne. Do 80-year-olds need to be the sole combine operator? Can the next generation market the production? Why don’t we find out before the elder generation is carried away by six at the church? Better a warm hand to guide someone into prosperity than a cold hand from the grave.
Congress doing Congress things
In legislative news, some ag requests for funding are getting slid into the Continuing resolutions for spending by Congress. This includes disaster relief; child nutrition reimbursement rate increases and WRDA (Water Resources Development ACT) funding that helps waterway flood control and coastal flooding controls. Reduction of tariffs on developing countries imports are also being kicked around. Interestingly, it looks like our complicated relationship with China will continue to be complicated as Congress considers excluding some Chinese products from the punishment tariffs they enacted. Meanwhile, China roots against the US interests in Ukraine but fails to overtly come out and say it.
Owww… My eyes…. Prospectively
A member of an environmental nonprofit was found to have standing to object to a hotel’s plan to fill a half-acre wetland and build a new building. Despite the fact the member HAD NEVER BEEN TO THE HOTEL, she claimed she suffered an aesthetic injury. Such an injury occurs when a person who uses the affected area will experience diminished aesthetic value due to the proposed drainage. Even if the individual member never visited the wetland, the court found that she nevertheless experienced an injury in fact because she could no longer enjoy viewing the wetland. The court found that to require them to see the site before claiming the injury would result in a situation where “must “step on the Old Faithful geyser at Yellowstone National Park to challenge its destruction.” Further, the court found that the fact that it was private property didn’t matter, because the complaining person could see it. This is not a great case for private land use advocates.
With apologies to one of the more protective copyright holders out there, the song, (which was intended as a parody of the party culture and turned into a party song itself) fits the repair bill directly. If we don’t stop it, soon nothing will be fixable locally or without great cost of our capital.
Technology is changing our consumption habits. I have clients show me videos of problems that 15 years ago they would have never dreamed of capturing on video and the multiple ways to communicate with one another expand every day.
It isn’t just new apps to snap, tweet, and toc that are evolving. It’s the machines the Ag industry relies upon. The manufacturers know that the operations are getting more efficient and need less iron to cover the same number of acres, so they are looking for revenue streams wherever they can. Repairing those machines is a prime target.
First, printers. Most printers are designed with “bricking” technology that shuts them down after so many sheets run through them, full stop. The “jail break” to make these perfectly functioning machines continue to work past a programing que requires violations of federal copy right protections. Combine this self-imposed wear date with requirements (calibration pages) that are designed to waste ink (which if you consider the price you pay for the volume you get it might be cheaper to print in blood) and create more purchases. One company has reported said they sell ink, and the printers are just a deliver system. Other manufactures simply chose cheaper materials that will wear out forcing a replacement purchase earlier. That’s why everybody has a basement fridge from 1970s and nobody has a basement fridge from the 2000s.
Next, pay to play. BMW is experimenting with selling cars with all the bells and whistles on every frame, and then requiring you to pay for the extras you want. Heated seats, back up camera, defogger swipe your credit card. Can’t pay, freeze away. Same can be done to farm equipment: Didn’t want to pay for the big motor, that’s fine, we will govern down your out put to the base model. It isn’t really a new concept; luxury cars have had hard to acquire tools to fix them for years for the same reason.
Finally, ag equipment. We have heard the story about John Deere shutting off equipment remotely when it was looked in Ukraine. We have heard the fights about trying to keep operators from being able to fix their own equipment.
What happens in response. Farm operators buying eastern European hacking kits to avoid built in restrictions on software. Hackers attacking corporate servers to “jail break” codes to trick the computers on the equipment into thinking they are at an authorized dealer to make repairs.
What happens next? When you bid on that used tractor in 2030, not only are you going to kick the tires, look at the wear points, but also you are going to want to plug in what ever comes after cell phones and check to see if the operating system has been tampered with. Consider the danger of a full throttle tractor when the operator intended to be moving slowly through a pen of cattle. You didn’t want that PTO to actually work, did you? Sorry, your credit card was expired and it’s a holiday in north Africa where our service center is located, find another tractor to unload feed with.
Right to repair legislation is some states are gaining traction (pun not intended but I will take it). New York will require sellers to provide access and resources for owners to repair their own equipment. Ag is not alone in this fight. Hospitals have similar issues repairing equipment that it has to have ready to perform at the drop of hat. Maybe once a more vocal sector of the economy than the rugged individualism of Ag is impacted more change will be on the horizon.
No big secret, life in Iowa is different. Taking a bus or the light rail to work shop or entertainment opportunities is as convenient and as practical and as likely as riding a dragon to those events. We are not among the highest compensated states for a number of professional service providers (Dr., Dentists, Lawyers, engineers, and the like) but also some of our costs of living are less. Basic food, housing and living costs are less in the rural area.
That doesn’t help when we Iowans cross the mighty Mississippi or Missouri rivers and venture to the coasts. The house of mouse and where the wizard lives amusement parks don’t provide a midwestern rate. Nor do the hotels or food establishments. But we have always known that.
Remoteness also doesn’t help on fuel. We are a driving society. We drive everywhere to get anything and to work. It appears that fuel costs for an average household is going up $2500 compared to two years ago. That that comes out of the vacation and capital improvement fund. Or they are going to turn to credit cards and HELOCS (Home equity loans), those are dangerous events that quickly erode financial stability.
Some economists think small communities nearer the employment and shopping centers may see an increase in demand for housing as rural populations grudging relocate to housing closer to the areas that provide the essential services they need. The question is, do they have the capacity and infrastructure, the lots and the incentives to welcome those who might decide a 20-mile drive is more palatable to the wallet than the 50-mile drive? Also, people who live in rural areas generally do so purposefully (whether by lack of resources to leave, family ties, or a desire to stay local). It may not be a mass exodus, but rather a slow migration if at all.
Combine this information with the realization that, while farmers rarely really retire, more than ½ of the 3.4 million American farm operators will be over sixty-five in the next ten years. While they may not want to retire, medical issues, financial concerns and family pressures may get some of these operators out of the driver’s seat in the coming years. The trend seems to be established operations, not new ones purchasing the retiring farmer’s capital assets. The result is even smaller school sizes in some communities as more farms become names on a yield monitor only instead of a household of people who consume and participate in the local economy.
New entrants into farming are rare as the mass transit options, we opened with. Not only is farmland (rent or purchase) rising in costs, but also fertilizer, fuel, seed and chemical are all on the upswing. Yes, weather and war are part of those costs, but the high prices that have offset these issues are not likely to last.
Congress, between grandstanding and gladhanding, is taking a look at barriers to entry and seeing what can be done to get access to capital for the young farmers. It starts with housekeeping at the USDA and perhaps speeding up the “speed of government” to make government backed loans more accessible and easier to obtain, perhaps in advance of actual purchase like commercial banks do. To the local FSA office’s credit, they have worked with bridge loans to allow the elder generation to acquire the ground with traditional financing and then resell to the younger generation when the FSA loans finally get approved.
Conversely, other Congress people are suggesting killing the PLC and ARC programs, removing subsidies for crop insurance and freezing all new enrollments in the CRP. The promise is nebulous tax cuts that will offset these traditional safety net features of farm programs. Those same members of Congress are also trying hard to divorce the farm bill from food programs (school lunch, SNAP, etc). The farm portion of the farm bill has long relied upon food (75% of the spending in the bill- which impacts everybody’s district) to make it pass the sausage making that is legislative action. The Midterms will likely shape the farm bill’s bent, with one party fanatically devoted to slashing government spending and taxes where ever it sees them and the other promoting policy agendas that may not always fit with modern production ag practices.
In a very old Simpson’s episode, the perennial square Martin is running against everyone’s favorite delinquent Bart for class president. Martin points out that the school has asbestos issues and isn’t safe, Bart replies by starting a chant of “MORE ASBESTOS! MORE ABSESTOS!” Which is immediately picked up by his flock of followers.
I think of this clip when the government tells any producer group, they NEED to do something, the result is usually movement the other direction. The USDA wants more oil seed and wheat to counteract shipping and other pinch points in those global markets. The corn market seems to have begun to chant “more corn” instead. Nonetheless, the USDA is kicking the tires on what it can do without a Congressional vote. To that, they are considering extending crop insurance planting deadlines, and offsetting prevent plant penalties to keep ground in production and allowing double cropping in an additional 681 counties. They are also considering allowing CRP early bird release in order to allow early fall tillage instead of waiting until 30 September for expiring contracts. Additionally, money is going to get thrown at fertilizer production and technical assistance for precision ag adoption and at one point, they considered crop loan rates. However, the chant seems to be drowning out these incentives.
The meat industry isn’t missing the chance to make gains in time of crisis by suggesting livestock auction companies to own small and medium packing plants. Hmm… No conflict of interest there at all… It turns out that the Packers and Stockyards act of over a 100 years ago identified that very issue as a conflict of interest and expressly prohibits it but now it appears that harvesting less than 2,000 head per day or 700,000 per year might be okay to let the buyer and processor be the same person. Of note, hogs aren’t really even auctioned off that much anymore and they are already owned from semen to cellophane by the same owner.
Words have meaning, just not the meaning you think or anybody else thinks.
No backbone, no problem!
In a clear case of judicial acrobatics of worthy of Ringling Brothers big top, California appeal’s court has some how extended protection to the western bumble bee, Franklin’s bumble bee, the Crotch bumble bee and the Suckley cuckoo bumble bee) using a statute designed to protect fish and other creatures of the sea. See section 45 of the CA game code says wild fish, mollusk, crustacean, invertebrate, amphibian, spawn or part of them. Bees are cowards and have no backbone. Well, one part of that is true. Therefore, they get rounded up under invertebrates, which science class members would tell you is a 97% of all animal life.
Clearly, word smithing and parsing to get to a desire result, protection of the bees, rules the day. some routine boiler plate language about fish and fish like things has been stretched far (probably b/c they don’t have backbones) to provide cover to the bees. Then again, that is what lawyers do use words made by the legislative branch (which is also filled with lawyers in many cases) against them later.
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