Environmental Law Tradeoffs for Ag

by Levi Russell

Tiffany Dowell at Texas A&M has a great, concise blog post about a recent circuit court decision that will undoubtedly increase costs associated with environmental regulation of farms. As usual, I encourage you to read the entire post, but here's an excerpt:

Environmental groups, led by Waterkeeper Alliance, argued that CERCLA and EPCRA do not allow the EPA to exempt anyone from reporting requirements if there are releases over the statutory reportable quantity.  Further, the environmental groups claim that the rule is arbitrary in treating waste on farms differently than similar waste in other places, such as at a zoo or a slaughterhouse, which would not be exempted from reporting.  On the other side, the National Pork Producers Council also filed suit, albeit for a very different reason.  The Council claimed that the CAFO exception is not allowed because it was based upon the public’s desire for information, rather than based upon the purpose for which the statute was enacted–facilitating emergency response.

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Now that the rule containing the farm exemption is no longer in place, under federal law, farms that may emit hazardous substances from animal waste above the threshold amount are legally required to report such emissions.   One major problem, which was noted by the court, is that there has been no determination of how these emissions should be measured.  It is unclear how farmers are expected to know whether their emissions are above reportable quantity, or how they are to measure them for reporting.  It may be that some operations can simply file an annual notice of continuous release if the releases are “continuous and stable in amount and rate.”  Hopefully, the EPA will offer some additional guidance documents in light of this ruling.  Operations for which this may be an issue should consult with their attorney to determine what steps to take.

A few things to note here:

1. The exemption was not for large animal feeding operations, it was for regular farms. With that exemption gone, farmers will be subject to significant regulatory uncertainty and cost.

2. That uncertainty and cost will fall disproportionately on small farmers. While this type of regulation will apply to larger farms, it will be difficult, at least in the short run, to know exactly where the threshold is. How many cows/hogs/chickens/etc does it take to create 100 pounds per day of ammonia or hydrogen sulfide? It will also complicate investment decisions for small farmers.

3. There's clearly an industry concentration vs environmental quality tradeoff here. A public concerned with the continued existence of the "family farm" would be smart to consider this tradeoff.

4. Tiffany notes that public comment played a role in the circuit court's decision, implying that interested parties can have some say in the regulatory process, at least when regulations are challenged in the courts. I suspect this will be a losing battle for ag in the future if the public continues to grow more concerned about these issues.

Sam Peltzman on Antitrust and Humility

by Levi Russell

Over at the ProMarket blog, there's a great interview of Sam Peltzman on industry concentration. The whole thing is worth reading, but I thought I'd reproduce what I think are probably the most controversial of Peltzman's responses.

Q: Which industries should we be concerned with when we look at questions of concentration?

The traditional answer, embedded in the merger guidelines, is “be concerned if concentration increases in an already concentrated industry.” The evidentiary basis for this is thin. A much older literature struggled vainly for years to find a broad pattern whereby adverse effects of concentration could be localized to highly concentrated industries. I am unaware that the state of knowledge on where we should be concerned—or indeed if we should be concerned—has improved much. Basically, antitrust policy relies more heavily on beliefs rather than a strong consensus about facts.

Q: The five largest internet and tech companies—Apple, Google, Amazon, Facebook, and Microsoft—have outstanding market share in their markets. Are current antitrust policies and theories able to deal with the potential problems that arise from the dominant positions of these companies and the vast data they collect on users?

See my answer to [the question above]. It is hubris to believe that economists and antitrust officials can predict the future, which is what you need to do in this sector. Who remembers that free web browsers were once thought to be a dangerous threat to competition?

Q: President Trump has signaled before and after the election that he may block mergers and go after certain dominant companies. What kind of antitrust policies should we expect from him? Pro-business, pro-competition, or political antitrust?

See [the questions above]. I prefer humility to hubris.

Big Ag Antitrust Blog Symposium

by Levi Russell

Recently I was part of a blog symposium put together by the International Center for Law and Economics at the Truth on the Market blog. The posts were quite diverse in terms of subject matter and perspective, so I think they're worth a read if you want to get a better understanding of what is going on with the Bayer/Monsanto, Dow/DuPont, and ChemChina/Syngenta mergers and acquisitions. There were some great contributions from the lawyers and economists on the panel and I was humbled to be invited to be a part of it. Below are links to the posts in order of the authors' last names.

Shubha Ghosh - Patents and mergers

Allen Gibby - Conglomerate effects and the incentive to deal reasonably with other providers of complementary products

Ioannis Lianos - Finding your way in the seeds/agro-chem mergers labyrinth

Geoffrey Manne - Innovation-driven market structure in the ag-biotech industry

Diana Moss - Mergers, innovation, and agricultural biotechnology: Putting the squeeze on growers and consumers?

Nicolas Petit - Antitrust review of ag-biotech mergers: Appropriability versus cannibalization

Levi Russell - Contestability theory in the real world
                        Effects of gene editing on ag-biotech antitrust

Joanna Shepherd - Understanding innovation markets in antitrust analysis

Michael Sykuta - Innovation trends in agriculture and their implications for M & A analysis

Expert Advice and Optimal Policy

by Levi Russell

Is it possible to bring expert opinion to bear on policy without the current system of administrative bureaucracy? That was the question on my mind when I read this post by my former colleague Tiffany Dowell at Texas A&M. The specific case discussed in Tiffany's post is a jurisdictional dispute against the Army Corps of Engineers (an administrative bureaucracy charged with enforcing much of US federal environmental policy) regarding a provision of the Waters of the United States (WOTUS) rule.

I won't get into the specifics of the WOTUS rule here. The point I want to make is broader, namely that we are not using courts as much as we could to accomplish policy goals. Currently at the federal level, the Executive branch has broad powers to interpret legislation, to write regulations that are legally binding for everyone, and to enforce those regulations without much interference from the Judicial branch.

The problem is that administrative bureaucracies have little incentive to consider potential unintended consequences and do a poor job of accounting for the costs of regulations. If, to fix these relatively poor incentives, the power of the bureaucracies is reduced, where would it go? Some of it could go to the Legislature and the rest might be entrusted to the Judicial branch directly. These two branches might do a better job of enforcing things like non-point- (in the case of the Legislature) and point-source (in the case of the Judicial branch) pollution since they're more directly bound by public scrutiny (Legislature) or hundreds of years of nuisance law (Judiciary).

What about expertise? Don't the administrative bureaucracies bring a lot of brain power to these regulatory problems? Definitely, but such expertise is often called on in legislative committees and on the witness stand in court cases. It doesn't require one to be flippant about environmental problems to suggest that there are, potentially, better institutional models to deal with things like pollution and environmental quality.

Monopoly Concerns with Baysanto

by Levi Russell

The recent merger of DuPont/Pioneer with Dow and the acquisition of Monsanto by Bayer have sparked a lot of discussion of market concentration, monopoly, and prices. A recent working paper published by the Agriculture and Food Policy Center (AFPC) at Texas A&M University written by Henry Bryant, Aleksandre Maisashvili, Joe Outlaw, and James Richardson estimates that, due to the merger, corn, soybean, and cotton seed prices will rise by 2.3%, 1.9%, and 18.2%, respectively. They also find that "changes in market concentration that would result from the proposed mergers meet criteria such that the Department of Justice and Federal Trade Commission would consider them “likely to enhance market power” in the seed markets for corn and cotton." (pg 1) The paper is certainly an interesting read and I have no quibble the analysis as written. However, some might draw conclusions from the analysis that, in light of other important work in industrial organization, are not well-founded.

The first thing I want to point out is that mergers an acquisitions can, at least potentially, result in innovations that would justify increases in the prices of the merged firm's products. To the extent that VRIO analysis is descriptive of firm's behavior with respect to innovation, we would expect that better entrepreneurs would be able to price above marginal cost. Harold Demsetz made this point in his 1973 paper Industry Structure, Market Rivalry and Public Policy. The authors of the AFPC study point this out as well, but the problem is that, even though we have estimates of potential price increases due to the mergers, it is very difficult to determine whether any change in price in the future is actually attributable to market power or simply due to innovation in the seed technology.

Secondly, the standard models of monopoly assert that pricing above marginal cost is at least potentially a sign of a firm exercising market power. Here, articles by Ronald Coase and Armen Alchian are relevant. I provided a discussion of the relevant portions in a previous post so I'll just briefly summarize here: pricing above marginal cost is an important signal that the current market demand is potentially not being met by the firms in the industry. It's a signal to other potential investors that entering the industry might be worth it. Further, there is an issue of measurement. Outside observers may calculate fixed cost, variable cost, and price and determine that a firm is pricing above marginal cost. However, there may be costs of which said observers are unaware. For example, there may be significant uncertainty (which is not the same as risk) about the future prospects of the industry. This is certainly possible in the biotechnology industry since the government heavily regulates firms in this sector. This is not to say that such regulation is bad or should be removed, simply that it presents costs that are difficult for outsiders to calculate.

Finally, I want to examine one part of the analysis in the AFPC paper. On pages 10 and 11, the authors write (citations deleted):

A market is contestable if there is freedom of entry and exit into the market, and there are little to no sunk costs. Because of the threat of new entrants, existing companies in a contestable market must behave in a reasonably competitive manner, even if they are few in number.

Concentrated markets do not necessarily imply the presence of market power. Key requirements for market contestability are: (a) Potential entrants must not be at a cost disadvantage to existing firms, and (b) entry and exit must be costless. For entry and exit to be costless or near costless, there must be no sunk costs. If there were low sunk costs, then new firms would use a hit and run strategy. In other words, they would enter industry [sic], undercut the price and exit before the existing firms have time to retaliate. However, if there are  high sunk costs, firms would not be able to exit without losing significant [sic] portion of their investment. Therefore, if there are high sunk costs, hit-and-run strategies are less profitable, firms keep prices above average costs, and markets are not contestable. 

I submit that under this definition, scarcely any industry on the planet is contestable, yet we see prices fall in many industries over time, even in those we would expect to have significant sunk costs and in which we would expect incumbents to have significant cost advantages over new entrants.

 Image source.

It's true that we sometimes must make simplifying assumptions that are at odds with reality to forecast future market conditions. However, some might infer from the AFPC paper (though I stress that the authors do not) that something must be done by anti-trust authorities to unwind the mergers and acquisitions under discussion. To infer this would be to commit the Nirvana Fallacy. To expect anything in the real world (whether in markets or in the policymaking arena) to be "costless" is an impossible standard.

It will be interesting to see what becomes of these mergers and whether seed prices move sharply upward in coming years. What is certain is that there is tremendous causal density in any complex system, such as the market for bio-engineered seed. Thus, policymakers should be humble and cautious about applying the results of theoretical and statistical analysis in their attempts to better our world.

Regulating the Regulatory Process

by Levi Russell

I suppose this is Mercatus Center week, but I can't resist sharing some great analysis and commentary from their researchers.

Senior Research Fellow Patrick McLaughlin recently testified before Congress on the need for an established process of regulatory form at the federal level. Drawing on the experience of the UK and Canada, McLaughlin presents several methods of establishing "regulatory budgeting." He describes this method of regulatory error correction this way:

Regulatory budgets, like other types of budgets, only work if they force the spender to identify and prioritize the most valuable options. The behavior of an agency with a budget differs from that of an agency without a budget. In today’s no-budget world, an agency’s objective is to fulfill its mission with the promulgation of rules. The effectiveness and efficiency of those rules are not evaluated in hindsight, and prospective evaluation of effectiveness and efficiency only occurs for less than one percent of all new rules. In contrast, an agency with a regulatory budget would act differently. First, the agency would avoid new regulations that would not achieve high benefits relative to their budgetary cost. Second, the agency would have incentive to eliminate old regulations that are found to be ineffective or intolerably inefficient. In other words, a regulatory budget process would resemble an error-correction process: it would lead to fewer new errors as well as aid in the identification and correction of existing ones.

 McLaughlin goes on to explain methods of setting the regulatory budget limit and several measures of regulation that could be used in this approach. I highly recommend reading the whole testimony.

Here's the conclusion:

Regulators and legislators alike are not perfect. Regulations are perhaps unique in the sense that they are undeniably important to all actions in the economy, but are not subject to a process for error correction. These errors—most of which are probably undiagnosed owing to the lack of retrospective analysis—are far from benign. They contribute to regulatory accumulation, a force that disproportionately harms low-income households, deters innovation, and slows economic growth, without delivering offsetting benefits. The reduction of the error rate requires a process that ensures the development and application of high-quality information, both before and after the effects of regulations have been observed. Regulatory budgeting represents one option to achieve just that.

Regulatory budgeting would lead to the creation of better information about the effects of regulations. Simultaneously, it would create incentives for regulators to act upon that information, promulgating those regulations that offer the greatest benefit relative to costs and eliminating regulations that impose an undue burden on the American people.

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.

One Positive Result of Brexit

by Levi Russell

In the wake of the UK's referendum on its membership in the EU, there have been many positive and negative reactions. My own view is that, even with the potentially negative impact of tighter immigration restrictions, the UK will be better off without EU regulations and will likely have trade terms similar to those it had before (see Switzerland). In fact, the biggest proponents of the Leave campaign want free trade with the EU. Of course I could very well be wrong. It might have been better from a utilitarian/consequentalist point of view for the UK to remain in the EU.

I think there's one benefit of the UK's (potential) exit that is unambiguous: The UK citizenry will be better equipped to govern themselves. Specifically, the cost of monitoring their lawmakers has fallen dramatically. If and when the UK leaves the EU, Britons will only have to monitor the behavior of the 650 members of parliament (MPs). Outside of trade deals, the EU MEPs in Brussels will have no direct effect on them.

Additionally, the benefit of participating in the political process is higher as well. Each MP now controls a larger share of the laws and regulations under which Britons live. Thus, any influence Britons (whether individually or in groups) wield over MPs now carries more weight.

It's possible that, on net, the UK's (potential) exit from the EU will be very bad for the average British citizen. However, there are clear benefits from a public choice point of view.

Value of Farm Data: Proving Damages Based on Trade Secret Protections

By: Terry Griffin, Ph.D. 

Last month, Ashley Ellixson and I described potential damages that farmers may claim in the event of a data breach if farm data were considered a trade secret. We (more specifically Ashley) discussed that legal protections for trade secrets include 1) actual damages, 2) reasonable royalty, and 3) unjust enrichment.  Over the last couple weeks since posting our publication, I have been contemplating which protection will most likely be utilized in practice. When the farm data, i.e. the trade secret, is used without permission from the farmer or farm data owner, a disclosure of the data results and it is assumed that damages can be claimed. Specifically when a data breach occurs, or the data are disclosed, the farmer or group of farmers desire to seek legal action and determine which protection would return the greatest compensation to them. 

I approach the issue such that I were retained to serve as an expert witness to deliver testimony. In this scenario, I would perform forensic economics to compare the relative value that the farmer would realize under each of the three protections in the event that farm data were considered to be a trade secret of the farm (Ellixson and Griffin, 2016). Ashley defines the three damages regarding trade secret protections as:

Damages may be one of three types:

1. Actual damages may include lost profits, which are typically calculated as net profits (meaning gross profits minus overhead and expenses required to run the business).

2. Reasonable royalty rate is determined by constructing a hypothetical negotiation for licensing the trade secret, or farm data, between the parties at the time misappropriation began. The law assumes this hypothetical negotiation occurred and that the farmer, who ordinarily would not license his trade secret to the misappropriator, did so willingly for a bargained‐for price.

3. Unjust enrichment seeks to return the benefit the misappropriator gained from his actions to the farmer.

First, before addressing the three sources of damages it is important to review how the different players benefit from the big data system in agriculture. In our definition, the big data system is a network of many farms’ data combined into a community dataset. In this community, the economics of networks are important. In the short term, the aggregator(s) attempt to entice as many farmers to submit as many acres of data as they can (remember than in the short run there are many aggregators vying to become a monopoly but in the long run there will be very few or only one aggregator). In the long run, the aggregator who controls the flow of data enjoys the lion’s share of the value of the data system. The individual farmer-members of the network benefit less than the aggregator; and the other players who offer analytic services are somewhere in the middle. In the following scenarios, I make the assumption that individual farmers have already captured the vast majority of any potential farm‐level benefits from their farm data (such as communications with landowners, creation of variable rate prescriptions, compliance reporting, directed scouting, etc.); and the damages only apply to the data being disclosed to others, i.e. the farm still has access to the data. It can also be assumed that the data disclosure or breach has occurred intentionally from the farmers’ perspective. I’ve also avoided any discussion of class action and have only evaluated these damages at the individual farm level. The expert witness for the misappropriator would most likely take the opposite approach than the one taken here.

Review of network effects

When I’m presenting on farm data issues I compare the data communities to classic networks such as the telephone and modern pop culture examples like Twitter or Facebook. The value of the system depends on how many other people consume or participate in the system. The value of the telephone system was zero when there were only one telephone (who are you going to call?). The value of the system, or community, is greater than the sums of the individual benefits each member receives in the long run. Multiple farms’ data in the aggregate are more valuable than one individual farm’s data. Given this characteristic of ‘network effects’ where the value of the system is a function of the number of members of the system, the aggregator enjoys much greater benefits than any individual in the long run. However, in the short run aggregators would attempt to entice farms to join the network up to the point that a critical number of farms were in the system. Once the data community has a critical mass of farms, i.e. the long run, farmers’ bargaining power with the data aggregator is greatly reduced. That being said, it is not expected that farm data would be misappropriated until a critical mass of data were available, so I’m only evaluating the mature data system for now.

Actual damages

Actual damages may be a viable option for the expert witness to testify about especially when considering ‘data as a resource’ and ‘excludability’. Excludability no longer exists when data are shared with a third‐party, i.e. in this case a data disclosure breach. If resource‐based theory (see Griffin et al., 2016, for more farm data details) applies to disclosure of farm data such that the excludability of that data were adversely impacted, then competitive advantage with respect to local bargaining power may be lost (Griffin et al., 2016). In this case, an individual farmer may lose real or perceived local negotiating power with landowners and agricultural retailers; these losses could be quantified and are expected to be substantive. In many regions of the USA, the competition for farmland is fierce and some farmers fear that they may not successfully win a bid for rented land if their data were disclosed. Another example may be in negotiation ability with ag retailers could be diminished. Loss of farmland acreage and lack of discounts on input purchases are quantifiable. These losses are the ‘actual damages’ that the expert witness would estimate using net present value of subsequent changes in farm revenue.

Reasonable royalty

Reasonable royalty will not likely be the damages sought by individual farms because the hypothetical negotiation is expected to arrive at an impasse. In this scenario, the farmer and aggregator enter into a hypothetical negotiation where the farmers’ bargained-for price of data were determined. Again, we look to the economic theory of networks to examine how this hypothetical negotiation turned out. Economic theory suggests that, in the long run, the aggregator places very little value on data from any individual farm and therefore would not negotiate beyond $0. The farmer who values farm data as a good, i.e. positive value, would not accept the $0 offered by the aggregator. Farmers’ reservation prices, or willingness‐to‐accept for their farm data, starkly differ from the price that aggregators are willing to pay. From the perspective of the aggregator, it makes very little difference whether any given farmer participates in the network. This is where the estimation becomes tricky. We know that the value to the aggregator is greater than the summation of all the individual benefits; however we also know that any given farmer can withdraw from the network without causing the aggregator to lose value with respect to the network once a critical number of farms are in the system. Therein lies the problem of determining the bargained-for price; the aggregator can argue that the value of any given farm is $0 to the aggregator. Since the parties are not likely to converge on an agreed upon price, the ‘reasonable royalty’ would be the most difficult of the three damages to defend. As the expert witness for the farmer, I would avoid attempting to prove a ‘reasonable royalty’ since the testimony would be based on an individual farm’s losses.

Unjust enrichment

As the expert witness, ‘unjust enrichment’ is the damage that my testimony would be easiest to prove and therefore the most likely candidate for farmers to claim damages. Given that the marginal value to an individual farm is relatively small, the misappropriator has the opportunity to disproportionately benefit or enjoy some sort of “unjust enrichment.” Even for well-meaning aggregators who initially would not disclose data to others for a profit, the temptation may become too large to ignore. For these reasons, ‘unjust enrichment’ is a logical damage to seek. At the community level, farm data has value to the aggregator and other third parties for commodity marketing manipulation, supply chain management, improvement of products, and so on. Although the preceding examples are not malicious on their own, we’ll proceed assuming that the agreement between the farm and aggregator precluded these examples. In this case, the misappropriator has opportunity to disproportionately gain from the unauthorized use or sale of community farm data. However, a value to the misappropriator may be in the millions of dollars but would equate to only pennies on the acre to the farmer.    

Conclusion

Given the three potential damages of trade secret disclosure, I would avoid attempting to prove ‘reasonable royalty’ in the long run and focus on a combination of ‘actual damages’ and ‘unjust enrichment’. I expect the per farm value for ‘actual damages’ to be greater than from ‘unjust enrichment’ however will also require more effort on the part of the expert witness to prove. In the short term when there are relatively few farms in the big data system, the farmer would have a relatively better chance at ‘reasonable royalty’ although the forensic economics would still be relatively more difficult to estimate substantial damages. The largest per acre damages that a farmer could claim would come from ‘actual damages’ if data were treated as a resource. The second largest per acre damages that a farmer could claim come from unjust enrichment. As an expert witness, I would attempt to claim both ‘actual damages’ and ‘unjust enrichment’. Proving ‘reasonable royalty’ would be most difficult of the three potential damages for an expert witness to estimate.

Contact information:

Terry Griffin, Ph.D.

@SpacePlowboy

References

Ellixson, Ashley and Griffin, T.W. 2016. Ownership and Protections of Farm Data. Kansas State University Department of Agricultural Economics Extension Publication. KSU-AgEcon-AE-TG-2016.1 May 31, 2016 http://www.agmanager.info/crops/prodecon/precision/FarmData.pdf

Griffin, T.W., T.B. Mark, S. Ferrell, T. Janzen, G. Ibendahl, J.D. Bennett, J.L. Maurer, and A. Shanoyan. 2016. Big Data Considerations for Rural Property Professionals. Journal of American Society of Farm Managers and Rural Appraisers. pp 167-180 http://www.asfmra.org/wp-content/uploads/2016/06/441-Griffin.pdf