The House Agriculture and Natural Resources Committee includes House Bill 1056 on its agenda Tuesday morning. HB 1056 includes a whole lot of housekeeping, tedious changes like replacing agriculture with agricultural in references to the ag mediation program. Someone must really want an adjective....

Dig through the style and form, and you'll find some interesting changes. For one, serving as state ag secretary is about to become cheaper. Right now, the person chosen by the Governor to lead the state Department of Agriculture is required by law to put up a bond of at least $10,000. The secretary's appointed executive assistants have to put bonds of at least $5,000. Sections 3 and 4 of HB 1056 say, "Nah, we trust you," and strike those bond requirements.

For what it's worth, numerous other public officials have to put up bonds to serve. SDCL 3-5-3 requires security deposits from all sorts of renters of public offices:

  • State Auditor: $10K
  • Secretary of State: $5,000
  • Commissioner of School and Public Lands: $20,000
  • Attorney General: $3,000
  • county commissioners: $1,000
  • county auditor: minimum $2,000
  • county treasurer: minimum $4,000, unless the county collects less than $2,000 in taxes, in which case the bond is a minimum of $1,000
  • county constable: minimum $200

The highest state officeholder bonds I've found so far are $100,000 required of the director of the Division of Insurance and $50,000 for that division's actuary and attorney (see SDCL 58-2-12).

Sections 9 and 10 offer a small but useful clarification of conservation district powers. Current law allows counties to contribute money to conservation districts to protect "soil and water resources" that protect the county's tax base. Section 9 replaces "soil and water" with "natural." This change would appear to allow counties to disburse funds for, say, wildlife habitat projects carried out by conservation districts. Section 10 on conservation district powers replaces a number of instances of "soil" with "natural resources". These changes appear to clarify that conservation districts may conduct water conservation projects that aren't directly tied to agriculture.

Sections 7 and 22 suggest the state ag secretary wants less to do with trees. Section 7 removes the state's shelterbelt program from the State Conservation Commission's portfolio, thus working with HB 1055 to abolish the shelterbelt program. Section 22 removes the requirement that the state forester cooperate with the U.S. Department of Agriculture in providing assistance to landowners "for protecting farm buildings, crops, and fields from erosion; and for furnishing forest cover beneficial for water conservation and for wildlife habitat."

HB 1056 is up for discussion before House Agriculture and Natural Resources tomorrow, Tuesday morning, at 7:45 a.m. Get ready for minutiae and amendments!

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Just a month ago the State Conservation Commission awarded 29 grants to 20 conservation districts to spend more than $350,000 to plant more shelterbelts. Heck of an idea, right?

House Bill 1055 kills that program. The Department of Agriculture is asking the Legislature to strike the chapter of state law that authorizes the Department and its State Conservation Commission to certify, inspect, and pay landowners for keeping trees and bushes on their land to prevent soil erosion and keep South Dakota agriculture viable.

I don't know if the Department has a better idea or if they are just giving up on shelterbelts. But we'll from the Department tomorrow, Tuesday morning, before the House Agriculture and Natural Resources Committee at 7:45 a.m.

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The South Dakota Department of Agriculture keeps harshing raw milk producers' mellow. SD-DOA sends the Legislature Senate Bill 45. For the most part, SB 45 appears to be clarifying definitions and rules. However, Section 3 includes this rewording:

    Section 3. That § 39-6-3 be amended to read as follows:
39-6-3. The provisions of § 39-6-2 do not apply to milk or goat milk Raw milk for human consumption may besecured or purchased for personal use by any consumer at the place or farm where the milk is produced or to any active farm producer of milk, selling and delivering the producer's own production direct to consumers only, if the place or farm where the milk is produced has a license or permit issued by the department pursuant to § 40-32-4 or 40-32-10.1. The containers in which any unpasteurized milk is sold shall be clearly labeled by the producer as "raw milk." the milk may be delivered directly to the consumer by the producer. No raw milk for human consumption may be secured or purchased at a farmers' market or farmer owned retail store that is not located at the place or farm where the milk is produced.

What?! Dairy farms can produce raw milk, but we won't let them set up their own off-farm store or set up a table at the local farmers' market to sell that raw milk?

Correct me if I'm missing some essential point of law, marketing, or public health, but the mission of the South Dakota Department of Agriculture is to "promote, protect, preserve and improve South Dakota Agriculture." It would seem farmers' markets exist specifically to help farmers sell more product. Selling more product would seem to promote and improve this area of South Dakota agriculture. But the Department of Agriculture is supporting regulations that block dairy farmers from certain business venues where they could more efficiently reach their customer base.

That is part of why the South Dakota Department of Agriculture has overseen a decline in the number of dairies in South Dakota for 30 straight years.

p.s.: Section 5 of SB 45 authorizes the Secretary of Agriculture to promulgate rules concerning dairy customer records. What: not satisfied to harass raw milk producers, Agriculture Secretary Lucas Lentsch wants to gather data on raw milk buyers so he can ban them from farmers' markets, too?

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South Dakota's Congressional delegation may be sticking in the ideological mud on lifting the failed embargo on Cuba, but sensible rural politicians are not. The new U.S. Agricultural Coalition for Cuba has the support of some rural Democrats and Republicans:

Speaking in support of the coalition were U.S. Senators Amy Klobuchar, D-Minn., and Jerry Moran, R-Kan.; as well as Representatives Sam Farr, D-Calif.; Kevin Kramer, R-N.D., and Rodney Davis, R.-Ill. Jay Nixon, Missouri's Democratic governor, was there to lend his backing, as was U.S. Agriculture Secretary Tom Vilsack.

Vilsack, a former governor of the key agriculture state of Iowa, said the president's policies will remove technical barriers between U.S. and Cuban companies and create a more efficient and less burdensome opportunity for Cuba's 11 million citizens to buy U.S. agricultural products.

"Cuba imports about 80 percent of its food," Vilsack said. "Which means there is significant economic potential for our producers. It's a $1.7 billion market. Our rice growers, our wheat growers, our corn growers, our soy growers, poultry and beef producers, all have opportunities in this new day" [Daniel Enoch, "Ag Stakeholders Combine to Back End to Cuban Embargo," Agri-Pulse, 2015.01.08].

Why would North Dakota's Rep. Cramer jump at the chance open trade with Cuba?

Cramer said he thinks he had been invited because, while other Republicans initially expressed opposition to Obama’s announcement he said, “It doesn’t sound dumb to me.”

He said, “What motivates me to come out so early” on Cuba is not just the sales of North Dakota peas, lentils, beans, durum and potatoes, but “the opportunity to influence an oppressed country” [Jerry Hagstrom, "Cramer, Klobuchar Lead Cuba Coalition," AgWeek, 2015.01.09].

Missouri's Governor Nixon says he and his counterparts see no ideological divide on opening Cuba:

Missouri Democratic Gov. Jay Nixon, who traveled to Washington for the event, said, “When it comes to Cuba, we are not on a level playing field. We cannot ignore 11 million customers, 90 miles from our country.”

Nixon said support for normalizing relations with Cuba is not only bipartisan in Congress, but “extremely bipartisan” among the nation’s governors [Hagstrom, 2015.01.09].

...but if that's the case, where is Governor Daugaard?

Big Ag wants 11 million new customers 90 miles from Florida. Can you blame them? Let's put their capitalist urges to work and, as Rep. Cramer suggests, put good relations to work influencing Cuba toward more freedom.

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Remember how Mike Rounds told us that Keystone XL would help South Dakota farmers by freeing up rail cars to haul grain instead of oil? Farm and blog friend Don Carr notices that, once Rounds was safely elected, the South Dakota Corn Growers changed their tune and admitted that the tar sands pipeline would not free up that much rail for farm products (a "blip on the radar," said SDCGA president Keith Alverson).

Carr contends that Rounds is putting Big Oil over Big Corn:

Rounds offered tepid support at best for one of South Dakota’s biggest ag products saying corn ethanol’s role was only as an oxygenate – not a ringing endorsement. And Rounds proudly took money from interests looking to upend the corn ethanol mandate. Meanwhile his challenger called for a dramatic increase in the blend of corn ethanol to 30% in U.S. gas tanks and was the only one to offer an agriculture policy plan [Don Carr, "Keystone Forces Corn Farmer Quandary," Republic of Awesome, 2015.01.06].

Apparently the Big Ag interests who backed Rounds are less interested in promoting their energy production than in blocking regulation of their pollutants:

American water quality is declining due to agriculture pollutants. Regulation is an increasingly viable option. For those reasons defeating the EPA rule has become agriculture’s main quest. So much so that they’re willing to jump in bed with declared enemies and let campaign lies slide [Carr, 2015.01.06].

By backing Rounds, the corn lobby is saying it wants to increase the chances of oil pollution on the prairie while fighting efforts to curb their own polluting activities. They have thus thrown in with a 100% pro-pollution Congressional delegation.

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For some time I have wondered why South Dakota's Republican leadership has consistently favored big ag over small ag, going to great (possibly criminal) lengths to recruit investors for megadairies and meat processing plants and subsidizing big cheese factories while imposing greater regulatory burdens on small dairy producers and shutting down raw milk producers on bogus inspections. Why would Republican leaders not pay at least as much attention to small farms?

Then I read gubernatorial chief of staff Tony Venhuizen's contribution to Seth Tupper's thoughtful Sunday report on the demise of the South Dakota Democratic Party, and policy and politics click:

One of the themes he noticed during his research was the tendency of Democrats to make gains in gubernatorial politics during periods of “agrarian discontent.”

That’s no longer the case, Venhuizen said, because farm numbers have declined so far that even a massive shift of farmers to the Democratic Party could no longer swing an election.

The numbers support the theory. There were more than 80,000 farms in South Dakota during the 1930s, but a steady drop has reduced that number to about 32,000 today. That’s a 60 percent decline, even as the state’s population has grown by 20 percent during the same period [Seth Tupper, "The Seeds of Democratic Decline: Theories Attempt to Explain Party's Nov. 4 Drubbing," Rapid City Journal, 2014.12.21].

Despite the state's antipathy and a collapse in dairy numbers, South Dakota added nearly 1,500 small farms from 2007 to 2012. But that's not nearly enough to restore the leverage McGovern Democrats used to have to play to agrarian discontent. Republican leaders can focus their ag policy on big players, scratching their backs with EB-5 money, tax breaks, and other corporate welfare. Those big players scratch right back at election time with votes and campaign contributions.

I know, I know, I shouldn't peddle conspiracy theories. A political party would never let its selfish political interests sway its policies. South Dakota Republicans would never drive small independent farmers out of business just because small independent farmers helped McGovern rebuild the South Dakota Democratic Party. South Dakota Republicans would never ignore the input of teachers and make bad education policy that drives teachers away from the state just because teachers tend to vote Democratic. South Dakota Republicans would never squeeze out unions with "right-to-work" laws just because labor is an important Democratic power base. South Dakota Republicans would never make it harder for Indians to vote just because Indians pick D over R 90% of the time.

But Venhuizen's observation makes on thing clear: top Republicans are perfectly aware that fewer farmers, as well as a higher proportion of the remaining ag player beholden to Republican state largesse, aligns perfectly with South Dakota Republican political fortunes.

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A couple of charts in state economist Jim Terwilliger's presentation to the South Dakota Banking Commission last Friday explain part South Dakota's doldrummy fiscal outlook.

Screen Shot 2014-12-11 at 11.02.57From 1997 to 2007, farm income averaged about 6% of South Dakota's personal income.  When ethanol boomed, so did crop prices, and the farm percentage of our income grew to almost 11% by 2011. In 2013, it was back down to 9.2%.

Corn dropped 40% in 2013 and is down another 6.7% this year; oilseed is also down (OPEC strikes again!). Corn and wheat futures have dropped back to the trough they dropped into right after the recession. Hmm... imagine how much worse corn prices could have been if the Chinese resolved their grain-storage shortage and stopped losing so much corn to mold.

Screen Shot 2014-12-11 at 11.03.17Average farm income under Daugaard has been double the average farm income under Rounds; equipment tax collections have tripled from the Rounds-era midpoint. Low farm prices will bend down, not boost, those returns.

Those curves may not bend down as far as we fear. Thanks to all those pastures getting plowed for corn, fewer cattle are out there, taking beef prices to an all-time high. Until the market rebalances, ranchers who held beef stand to make some money. Now if we just hadn't let those schemers run that beef plant in Aberdeen into bankruptcy, we might have a nice surfboard to ride that beef wave for even more economic activity.

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Hey, that's my neighbor Charlie Johnson on the YouTube!

Actually, it's an ad from the Organic Farmers' Agency for Relationship Marketing. But it's also a great nutshell explanation of the Organic farming philosophy Charlie inherited from his dad Bernard: "What goes on this land has to go on our tongue first." (I invite you to take up with Charlie what that means about his use of manure as fertilizer.)

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