Yes, Virginia, Plowing is Pollution

by Levi Russell

Obviously the title is meant to be facetious. I'm just in shock about this ruling and am concerned about the ramifications it will have for producers in the future.

Below I reproduce a short Farm Futures article that summarizes a recent court decision in California regarding the Clean Water Act. As cynical as I am, this decision did surprise me.

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Judge Kimberly Mueller on June 10, 2016 in the U.S. Eastern District Court of California found that John Duarte, a nursery operator and wheat farmer, plowed wetlands, four to six inches deep, and therefore violated the Clean Water Act (CWA).

The Judge found Mr. Duarte, by chiseling a pasture, discharged fill material into a water (vernal pool) of the United States. Get this! The Court wrote “In sum, soil is a pollutant. And here, plaintiffs instructed [a contractor] to till and loosen soil on the property.”

This plowing, according to the Court, caused “…the material in this case soil, to move horizontally, creating furrows and ridges.” You will not believe this. 

The Court wrote, “This movement of the soil resulted in its being redeposited into waters of the United States at least in areas of the wetlands as delineated...” In sum, the Judge found that chiseling no more than a few inches of soil constituted an addition of a pollutant to a wetland.

Stunning!

The Court also evaluated whether the tractor and soil chisel plow were point sources under the CWA. The Court cited cases which found that bulldozers, backhoes, graders, tractors pulling discs and rippers can be point sources under the CWA.

The Court describes Mr. Duarte’s equipment as having 7 shanks with 24-inch spacing and each shank was 36 inches long. The Court wrote, “The equipment loosened and moved the soil horizontally, pulling the dirt out of the wetlands [vernal pools] and redepositing it there as well.” 

Vernal pools are described as meeting all three wetland parameters. They are dry the majority of time. As a result, the Court found that the equipment used to aerate the soil was a point source under the CWA.

Under the CWA there must be a discharge of a pollutant to navigable waters from a point source. Again, it is believed that to have a discharge of a pollutant, there must be an addition of the pollutant to the navigable waters. It is also believed that farming operations allegedly have an exemption under the CWA which exempts certain activities of farming and ranching from CWA permitting requirements. (The Court seems unaware that farming is considered a nonpoint source covered by section 319 of the CWA)

The CWA regulations defines farming and declares “Normal farming…activities such as plowing, seeding, cultivating, minor drainage and harvesting for the production of food, fiber and forest products,…” are not activities which are prohibited or regulated under the CWA. Plowing is also defined by EPA as meaning “…all forms of primary tillage, including moldboard, chisel or wide-blade plowing, discing, harrowing and similar physical means utilized on farm, forest or ranchland for the breaking up, cutting, turning over, or stirring of soil to prepare it for the planting of crops.”

The Court found that Mr. Duarte’s activities did not meet the exemption EPA has provided for farming. The Court believed that the land being aerated by Mr. Duarte had not been land used for farming activities but for the grazing of animals. (Grazing or pasturing of animals apparently is not an agricultural activity!) The Court believed the farming operation which could be exempted had ceased to operate as a farm, and that Mr. Duarte was engaging in new agricultural activities. 

Legal complications

The case is extremely complicated from a legal standpoint where Mr. Duarte sued the Army Corps of Engineers (Corps) claiming the Corps had violated his 5th Amendment right to due process and his 1st Amendment right against retaliatory prosecution. According to the opinion, there were two rounds of motions to dismiss significant evidentiary objections and objections over what constituted hearsay. The U.S. Department of Justice filed a counterclaim against Mr. Duarte using the CWA and won.

Basically the case says plowing can be a polluting activity particularly in areas that can be identified as vernal pools, vernal swales, seasonal wetlands, seasonal swales and areas where there may be intermittent and ephemeral drainages.

Mr. Duarte had purchased the land in order to plant winter wheat. He had been very careful in hiring consultants to identify any wetlands. Apparently what he did was insufficient according to Judge Mueller, an Obama appointee, who served as a City Councilwoman in Sacramento. In addition she has worked as a U.S. Magistrate Judge but appears to have no experience in agriculture. It shows!  It is indeed surprising that an attempt to grow wheat on approximately 450 acres results in the violation of the CWA.

Precision Agriculture Implications for Farm Management: Farmland Leasing Example

By Terry Griffin

In the US, most farmland is owned by the farmer. However, substantial percentages are owned by someone other than the farmer. In the most recent USDA Census of Agriculture, 62% of farmland was owned by the farmer-operator. The percentage of rented farmland has ranged from 35% in the 1960’s to nearly 43% in 1992. Rented farmland proportions are higher in the Delta, Corn Belt, and Plains states than the rest of the country (USDA Census of Agriculture 2012). Therefore, a primary focus of farm management has been on acquiring and maintaining control of farmland; and an important topic that precision agricultural technologies can be a useful tool.

During my precision agriculture presentations I have been discussing the value of data. In particular, the prevalence of farmers and service providers creating printed maps from yield, soil, and other data as the ultimate use of data was discussed. The value of these printed maps was debated. Upon stating that unused data has no value, I mentioned that printed yield maps usually end up with similarly very low values, but with a notable exception for farm management. One exception is that some landowners appreciate printed yield maps, especially when presented in a format such as framed like a picture suitable for hanging or as kitchen table place mats. Several participants at the meeting paused to make written notes, and several hallway conversations followed. Given the interest, it seemed worthy of a short write-up to share this idea.

Even though not all landowners would find value in receiving printed yield maps at the end of the year, many would cherish this and it ultimately could make the difference for a farmer to continue farming that tract. The overall farm management principle here is that farmers who get to know what makes their landowners happy can position themselves better to maintain and enhance that relationship (assuming some level of utility maximizing behavior). Some landowners view their investment just as that, an investment, and value the revenue stream only (i.e. profit maximizing). Others would enjoy telling their friends about their asset, the history, and current events expressed through a printed yield map, either framed or imprinted on a coffee mug or perhaps some other creative expression of it.

At a time when cutting-edge agricultural discussions include ‘big data’, telematics, and autonomous decision-making processes, there are still many opportunities to use precision agricultural technologies to improve basic farm management. In particular with the current economic farm environment of potentially increased financial stress, existing technology on the farm may aid in ways not previously considered. Other examples of using precision agriculture technology for farm management exist that will be discussed at a later time.

Potpourri

House Ag Committee chair Conaway comments on the state of the ag economy.

Don Boudreaux corrects Paul Krugman on the definition of a public good.

Bryan Caplan blogs about an interesting article by Niclas Berggen on the pro-govt bias of behavioral economists. Berggen's results:

Our main findings are that 20.7% of all articles in behavioral economics in the ten journals contain a policy recommendation and that 95.5% of these do not contain any analysis at all of the rationality or cognitive ability of policymakers. In fact, only two of the 67 articles in behavioral economics with a policy recommendation contain an assumption or analysis of policymakers of the same kind as that applied to economic decision-makers. In the remaining 65 articles, policy recommendations are proffered anyway.

Whither the Young Farmer?

Much is made about the average age of the American farmer. USDA Secretary Vilsack was once quoted as saying, "We have an aging farming population. If left unchecked, this could threaten our ability to produce the food we need – and also result in the loss of tens of thousands of acres of working lands that we rely on to clean our air and water." That's serious stuff, but a more careful analysis reveals that the situation isn't so dire after all.

Analysis by Carl Zulauf indicates that farmers are aging no faster than the general public. Additionally, we would expect, he says, that farmers would be older than the average business owner because modern agriculture is so capital intensive. Todd Kuethe breaks down farmer age by number of farms, acreage, and income, and notes that

The largest share of the income of the sector is captured managers between the age of 45 and 64. Just over half of Illinois' primary farm operators are between ages 45 and 64 (51.5%). This group, however, represents 60% of Illinois' agricultural land and 62.9% of the state's farm income.

Zulauf's observation that capital intensive industries are likely to have older sole proprietors on average is especially interesting given the current land price environment. As Brent Gloy and David Widmar note, land values are currently quite high, but a combination of low returns and rising interest rates could pave the way for a downward correction in land values. I made a similar argument about land values in Texas last October. The potential for a decline in land values may open up opportunities for younger farmers to buy in.

Another potential driver of the increasing age of the average farmer is increased regulation. As I've documented in the past, regulation by the EPA has increased almost continuously over the last 4 decades. Now more than ever farmers are burdened by the cost of regulation by the EPA. This increased regulatory cost creates economies of scale which might serve to hinder entry into the industry.


There are likely many causes of the increase in the average age of the American farmer, but it seems the worst thing that will happen is consolidation. If land values correct and young farmers are able to maintain access to credit, the trend of the aging farmer may at the very least slow down.

Food Labels and the Informed Consumer

Product labels are an important part of communicating product information to consumers. For a long time, regulators and politicians have been in the business of mandating the content of labels for a whole range of products, especially food. While other reputation mechanisms are important to being fully-informed, we all rely on labels to some degree.

But mandated labeling has its share of pitfalls. Regulators might require too much information on a label, increasing costs to consumers with little upside. They might reduce the amount of information on a product label by increasing the costs of using certain language. More bizarrely, they might require completely misleading information to be put on a label. Arguments in favor of different labeling requirements can come from consumer pressure groups, but often they come from within industries.

An example of the first problem is mandatory country-of-origin labeling (or MCOOL) of meat products. Though there are efforts in congress to repeal MCOOL, it is currently the law of the land. A fact sheet distributed by K-State concludes:

The overriding finding of limited awareness of MCOOL, narrow use of origin information in purchasing decisions, and no evidence of a demand impact following MCOOL implementation is consistent with the argument that voluntary labeling by country of origin would have occurred if it were economically beneficial to do so. More broadly, the findings of this project generally support the assertions of MCOOL opponents who have asked “where is the market failure?” 

MCOOL creates international trade issues and increases costs to producers, processors, and retailers with little to no upside.

Potpourri

Jayson Lusk of Oklahoma State University takes on Nassim Taleb's analysis of risk and GMOs. Taleb suggests that catastrophic but statistically improbable events implies we shouldn't use GMOs. Further, he suggests that biologists can't judge risk or causality.

Don Boudreaux of George Mason University has an interesting quotation and short discussion on "sticky wages," one of the fundamental assumptions of Keynesian theory.

With Chipotle on another anti-commercial-ag tirade, here's a post from last year by the world famous Peterson Farm Brothers.

Despite increases in federal gov't spending on cybersecurity, breaches are on the rise.

Nielsen poll suggests that consumers pay more for what they perceive to be "better" food. Of course, this includes food that goes by such scientifically-dubious monikers as "organic" and "all natural." The recent dramatic increases in beef (and therefore calf and breeding stock) prices certainly corroborate this.

McDonald's continues its campaign to assuage the fears of consumers about its food. In this case, it's their french fries.

John Cochrane of the University of Chicago brings up an old paper by former Federal Reserve economist Charles Plosser that reminds us that price deflation isn't necessarily a bad thing.

Potpourri

An interesting article on Progressive Farmer about low-pressure tires and soil compaction.

Jayson Lusk has an interesting post on the basic facts (and some interesting intuition) about corporate and family farms.

An interesting post by Pete Boettke at George Mason U. on the political leanings of academic economists. Some of the loudest economic voices on the internet are staunchly anti-free-market. Paul Krugman is the most obvious example. Pete mentions a study by Dan Klein which suggests that most economists "lean left" although they do so to a much lesser degree than academics in other social science fields. I hope to conduct a similar study some day for agricultural economists.

The most recent Federal Open Market Committee minutes suggest that the Federal Reserve will not begin to raise interest rates until April or later. The Fed sees recent declines in oil costs as beneficial on net, but is concerned that inflation may not be high enough in the coming months. It's difficult to understand why someone would think that always-rising prices are good when they also believe that lower prices due to increased supply are bad.

Thomas DiBacco has an interesting piece on the one and only time the U.S. national debt was zero.

A recent entry in the Urban Dictionary is pretty hilarious considering the new criticism of the famous book on inequality by Thomas Piketty.