The signing of House Bill 1371 in late April has loosened restrictions on corporate farming laws in North Dakota, providing the opportunity for the state’s producers to keep up with neighboring states in animal agriculture.
The bill allows livestock operations in the state to attract outside investment. With any investment, there are limitations, including that farmers must make up the majority of partners in any corporate structure.
North Dakota Agriculture Commissioner Doug Goehring said the goal when creating the bill was to put North Dakota producers in position to enjoy the success of neighboring states.
“All of our neighboring states are just doing that much better, to the point that 40-50 percent of their typical gross receipts that come from agriculture were coming from animal agriculture – animal agriculture was complementing the farming side of it,” he said.
Conversely, Goehring noted, only 15-16 percent of North Dakota’s total receipts we’re coming from animal agriculture.
“We have so much opportunity and so many of our grain farmers are looking for these kinds of opportunities to support these kinds of ventures,” he said. “When we were working on this stuff and pulling info together, we saw that we’re losing all of our dairies, our hog operations, and we’re going backwards. What can we do to stop it? Ultimately, we found that if we could tweak the corporate farming bill to address animal agriculture, we could probably do more to support more gross receipts for agriculture in the state.
“This can change the bottom line for our ag operations,” Goehring added.
In the bill, shareholders within a corporation holding 75 percent or more of the shares must be actively engaged in farming or ranching. For an LLC, it’s 51 percent. All shareholders must be U.S. citizens, and no corporation or LLC may own, lease, or have an interest in more than 160 acres of farmland or ranchland.
“It’s very specific, as we’ll only allow an animal agriculture operation to seek capital and partnerships beyond the traditional structure that’s available now,” Goehring said. “Within there, it’s only for a dairy, hog, poultry facility or feedlot. A greenhouse is also allowed, but they’re limited to 40 acres.”
While the main benefit to the changes is to help revitalize animal agriculture in the state, other benefits include: adding value to crop production; improving the tax base; creating jobs in rural areas; and creating natural fertilizers with manure to improve soil health and reduce fertilizer costs for farmers.
One question Goehring received early on was, why would livestock producers want this?
Source: agupdate.com
Categories: North Dakota, Government & Policy