Journal of the NACAA
ISSN 2158-9429
Volume 9, Issue 1 - June, 2016
Results of a Legal Issue Survey to Farmland Leasing Workshop Attendees in Ohio
- Hall, P. K., Asst.Professor and Field Specialist, Agricultural & Resource Law, Ohio State University Extension
Ward, B., Asst. Professor and Leader, Production Business Management, Ohio State University Extension
ABSTRACT
Farmers often encounter laws and legal issues, and several institutions around the United States provide agricultural law information to address the legal needs of the agricultural community. To identify the most pressing legal issues of concern to Ohio agricultural landowners and operators, we administered an open-ended survey question to attendees of farmland leasing workshops around Ohio from 2014 to 2016. Survey results confirm the importance of providing agricultural law information and can help direct specific resources on identified legal issues. Repetition of the survey to other agricultural audiences can provide additional insight into the legal concerns of the agricultural community.
Introduction
Today’s farmers deal with a range of laws, regulations and legal issues that affect nearly every stage of agricultural production and marketing. Interacting with law is not new to agriculture. As early as 1949, publishers printed books on farm laws and by the 1960s, the University of Iowa established the nation’s first Agricultural Law Center (Hamilton, 1990). Today, many institutional programs highlight the importance of the relationship between law and agriculture and the need for agricultural law information (Bazen & Bowling, 2007), such as the Agricultural & Resource Law Program supported by Ohio State University Extension. Research suggests that agricultural operators recognize the role law plays in their operations and that farmers seek information on many legal topics, such as legal risk (Nagler, Bastian, Hewlett & Weigel, 2007), estate planning (Fetsch, Bastian, Kaan & Koontz, 2001), rules and regulations (Blazek, Wantock, Sterry & Kirkpatrick, 2015) and transition and business planning (Schultz, Anderson, Eggers, Hambleton & Leibold, 2015). To better understand and meet the legal needs of the Ohio agricultural community, we asked agricultural landowners and operators to share their legal concerns.
Methods
We administered a survey to 473 attendees at OSU Extension Farmland Leasing Workshops in Ohio from 2014 to 2016. The survey instrument contained several open-ended questions that sought short answer responses from participants. The question on legal concerns asked, “what is the biggest legal issue facing your farmland or farming operation?” Other open-ended questions asked participants about their needs for risk management information and to identify the greatest risk facing their agricultural operations. The survey also contained several questions about participants’ farmland leasing practices.
The farmland leasing workshops are three-hour programs we teach that address economic and legal issues in farmland leasing. OSU Extension Educators offered the workshops at 13 locations around Ohio during the winters of 2014 to 2016. Each attendee received a survey before the workshop began; we collected the surveys at the end of the program. After reviewing all survey responses to the legal issue question, we identified legal subject areas raised by the responses. We categorized each response according to its legal subject area. Unclear or ambiguous responses were not included in the survey results.
Results
Of the 497 workshop attendees, 434 (87.3%) returned the survey but only 156 (31.4%) responded to the question asking about the biggest legal issue facing the attendee’s farmland or farming operation. We reviewed the surveys and identified 14 legal issue subject areas raised by the responses, then categorized each response to a corresponding legal issue subject area. Three surveys indicated “none,” “don’t really have a legal issue,” and “can’t answer,” which we assigned to a “none” category. Table 1 lists the subject areas and presents examples of individual responses in each subject area.
| Legal issue subject area | Examples of individual responses |
|---|---|
| Farmland leasing |
|
| Transition planning |
|
| Marketing |
|
| Taxation |
|
| Estate planning |
|
| Environmental |
|
| Government programs |
|
| Finance |
|
| Liability |
|
| Neighbors |
|
| Land |
|
| Trespassers |
|
| Animal rights activists |
|
| Water rights |
|
Table 1. Legal issue subject areas identified by Ohio agricultural landowners and operators and examples of individual responses in each subject area.
Nearly one-half of the attendees cited either farmland leasing (29%) or transition planning (21%) as the biggest legal issue they faced, while 11% raised marketing as their legal issue of concern. The legal issues containing the fewest responses were animal rights activists and water rights, each with one response. Table 2 presents the number and percentages of responses for each legal issue subject area.
| Legal issue subject area |
Number of responses |
Percentage |
|---|---|---|
| Farmland leasing | 45 | 28.9 |
| Transition planning | 32 | 20.5 |
| Marketing | 20 | 12.8 |
| Taxation | 10 | 6.4 |
| Estate planning | 9 | 5.8 |
| Environmental | 8 | 5.1 |
| Government programs | 6 | 3.8 |
| Finance | 6 | 3.8 |
| Liability | 5 | 3.2 |
| Neighbors | 4 | 2.6 |
| Land | 4 | 2.6 |
| None | 3 | 1.9 |
| Trespassers | 2 | 1.3 |
| Animal rights activists | 1 | 0.6 |
| Water rights | 1 | 0.8 |
| Total | 156 |
Table 2. Number and percentage of responses for legal issue subject areas identified by Ohio agricultural landowners and operators.
Discussion
The prevalence of farmland leasing issues as the top survey response did not surprise us, given that we administered the survey to attendees of a farmland leasing workshop. While we urged respondents to complete the question on legal issues prior to the start of the workshop to minimize the effect our discussion of farm leasing legal issues would have on survey responses, we can assume that the program could have impacted survey responses completed after the program ended. However, the individual responses in the farmland leasing category raise several issues in addition to those presented in the program, such as “multiple owners with different needs,” “absentee landowners” and “successor to lessee is operator’s family member who assumes nothing is changing.” The addition of these different leasing issues combined with those discussed in the workshop lends credibility to farmland leasing as the top legal issue for survey respondents.
We separated farm transition planning and estate planning into separate categories, although the two legal subject areas are interrelated. Combined, these topics elicited top responses from 26.3% of our survey participants. The actual responses provide insight into specific concerns. The term “next generation” appears frequently and several comments point to addressing differences between on-farm and off-farm heirs. Surprisingly, several comments raise concerns about the lack of transition planning by other landowners and three responses specifically target “long term health care” as an important legal issue.
In a study of the Tennessee agricultural community, Bazen & Bowling (2007) found that respondents reported the highest need for legal services in the previous five years to be in the area of estates, trusts and wills. Fetsch et al. (2001) identified legal information and estate planning as the highest interest levels in and need for information reported by farmers and ranchers in Wyoming and Colorado. More recently, Schultz et al. (2015) found that the top two things farm and ranch women participating in Annie’s Project workshops in Delaware, Florida, Iowa, Illinois, Indiana, Maryland, Michigan, Mississippi, North Dakota, and South Dakota most wanted to learn about were estate and succession planning. These studies align with the high interest in transition and estate planning demonstrated by our survey participants.
An unexpected finding is the frequency of replies related to marketing, which represents 12.8% of survey responses. An analysis of the actual responses suggests that the concern is more likely an economic than a legal issue. Many of the comments refer to prices, risk and marketing and none mention grain contracts or other legal obligations. However, three respondents identified “direct marketing regulations” as the legal issue.
The prevalence of taxation as a legal issue of concern in our survey may have been due to agricultural property tax increases in Ohio during the survey period. Ohio law requires a reappraisal of land parcels every six years and updates to the appraisals every three years, and establishes a formula for determining reduced property values for qualifying agricultural land. Beginning in 2014 in Ohio, a combination of previously low agricultural land values, decreasing capitalization rates and increasing crop yields and crop prices led to higher agricultural land values and higher property taxes after the mandated reappraisals and updates (Gearhardt, 2014). Sixty percent of the taxation responses specifically mention differential property taxes for agricultural land.
Our survey results are both similar and dissimilar to results of an earlier legal needs survey of Illinois farmers. Endres, Johnson, Uchtmann & Silvis (2007) listed 15 legal issues and asked respondents to indicate a legal issue’s degree of importance to the respondent’s farming operation. The survey also asked respondents to identify the three most important legal issues from the list. Respondents selected federal programs, tax and energy as the three most important legal issues in the Illinois survey, while our Ohio respondents identified leasing, transition planning and marketing as their biggest legal issues. Several legal issues from the Illinois survey that did not appear in our responses include energy, land use, seed saving, natural disasters, employing workers, divorce and discrimination. Of the responses from our survey, transition and estate planning, liability, neighbors, land, trespassers, animal rights activists and water rights were absent from the list of legal issues in the Illinois survey. Table 3 compares the rankings of legal issues for the Illinois and Ohio surveys.
|
Rank by response rates |
Illinois survey (Endres et al., 2010) |
Ohio survey (Hall & Ward, 2016) |
|---|---|---|
| 1 | Federal programs | Farmland leasing |
| 2 | Energy | Transition planning |
| 3 | Tax issues | Marketing |
| 4 | Environmental laws | Taxation |
| 5 | Land use issues | Estate planning |
| 6 | Marketing and diversification | Environmental |
| 7 | Farmland lease issues | Government programs |
| 8 | Structuring a farm business | Finance |
| 9 | Seed saving issues | Liability |
| 10 | Natural disaster problems | Neighbors |
| 11 | Employing workers | Land |
| 12 | Debit and credit problems | Trespassers |
| 13 | Livestock production contracts | Animal rights activists |
| 14 | Divorce | Water rights |
| 15 | Discrimination |
Table 3. Comparison of rankings for legal issues of farmland owners and operators in Illinois and Ohio.
Two factors related to survey methods may account for the different results in Table 3: differences in question formats and differences in survey respondents. The Illinois survey presented respondents with a list of pre-selected legal issues while our survey contained an open-ended question that required respondents to self-identify legal issues. The Illinois survey went only to farms reporting a gross value of agricultural product sales while we presented the Ohio survey to attendees of Farmland Leasing Workshops, which included agricultural operators with any level of agricultural product sales and also included farmland owners not engaged in agricultural production or sales of agricultural products.
A second series of survey questions in the Illinois study aligns more closely with our Ohio results. The survey presented a list of 11 legal topics and asked respondents to rate the usefulness of legal assistance or educational programming on each topic. This second list of topics included “passing on the farm,” which received the highest number of “very useful” responses (62%). The documented interest in farm transition represented by this result in the Illinois survey corresponds with the frequency of transition and estate planning issues identified as important by Ohio agricultural landowners and operators.
Conclusion
The results of this survey are helpful for providing legal educational resources and programming to Ohio agricultural landowners and operators. Ohio State University Extension should continue to address the farmland leasing legal issues identified as a big concern by survey respondents. The survey also indicates a strong need for farmland transition and estate planning resources and illustrates a wide variety of additional legal issues of lesser concern to agricultural landowners and operators. Because we administered the survey only to attendees at farmland leasing workshops, it would be useful to replicate the survey with other audiences and continue to better understand the legal issues of concern to Ohio’s agricultural community.
Literature Cited
Bazen, E., & Bowling, J.P. (2007). Discovering the legal concerns of the Tennessee agricultural community. Journal of Extension, 45(2) Article 2RIB1. Retrieved from http://www.joe.org/joe/2007april/rb1.php
Blazek, J., Wantock, K., Sterry, R. and Kirkpatrick, J. (2015). Women are from venus: unique programming needs & challenges of women farmers, Journal of the NACAA 8(1). Retrieved from http://www.nacaa.com/journal/index.php?jid=483
Endres, A.B., Johnson, S.B., Uchtmann, D.L. & Silvis, A.H. (2010). The legal needs of farmers: an analysis of the family farm legal needs survey, 71 Montana Law Review 135. Retrieved from http://scholarship.law.umt.edu/mlr/vol71/iss1/3
Fetsch, R., Bastian, C., Kaan, D. and Koontz, S. (2001). A two-state comparison of farmers' and ranchers' risk management education needs, Journal of the American Society of Farm Managers and Rural Appraisers, 64(1), p.81. Retrieved from http://portal.asfmra.org/userfiles/file/journal/fetsch81_92.pdf
Gearhardt, L. (2014). Why did my CAUV values increase so much? Retrieved from http://aglaw.osu.edu/sites/aglaw/files/site-library/CAUV.pdf
Hamilton, N. (1990). The study of agricultural law in the United States: education, organization and practice, 43 Arkansas Law Review 503. Retrieved from http://nationalaglawcenter.org/wp-content/uploads/2013/06/hamilton_study.pdf
Nagler, A., Bastian, C.T., Hewlett, J.P., & Weigel, R.R. (2007). Risk management for ag families:evaluation of an integrated educational program for producers on the Northern Plains. Journal of Extension, 45(3) Article 3RIB3. Retrieved from http://www.joe.org/joe/2007june/rb3.shtml
Schultz, M., Anderson, M., Eggers, T., Hambleton, R. & Leibold, K. (2015). Managing for today and tomorrow: an effective transition planning course for rarm and ranch women, Journal of the National Association of County Agricultural Agents, 8(2). Retrieved from http://www.nacaa.com/journal/index.php?jid=552