Legislature Posts First Proposed Bills of 2011

What's that under my tree? Christmas bills! Yahoo! Start your RSS engines: the first pieces of legislation to be proposed in the 2011 session of the South Dakota State Legislature are in the e-hopper.

First in from the State House: two bills on the agricultural productivity tax (you know, the quasi-income tax now imposed on farmers in place of plain old property tax). House Bill 1001 changes shall to may in a couple spots (ah ha! So shall and may do mean different things!) and allows the folks in charge of this tax to incorporate more data in the calculations. HB 1002 clarifies the need for documentation and the kinds of data the director of equalization can use to assess taxes on ag land.

HB 1003 empowers the Interim Rules Review Committee to revert rules that impose "unreasonable" costs on local governments and school districts. If I'm reading the law right, the interim committee already has the power to revert rules for other reasons. But I wonder if this change will resurrect debates over costs that are better settled during session by the full body.

The Senate is a bit slower out of the blocks, with a couple of style and form changes. Senate Bill 3 has a little more substance: it clamps down on the use of South Dakota's state seal. Section specifies that the state seal may not be used for the following:

1. On or in connection with any advertising or promotion for any product, business, organization, service, or article whether offered for sale for profit or offered without charge;
2. In a political campaign to assist or defeat any candidate for elective office; or
3. In a manner which may operate or be construed as an endorsement of any business, organization, product, service, or article.

In other words, if this passes, Senator Russell Olson (R-8/Madison) will have to get the Bulldog Media folks to whip up a new header for his website:

Small but deadly: Senate Bill 3 would ban use of the state seal in political campaign literature.

Senate Bill 3 would empower the Secretary of State to come up with rules to "assure tasteful and high-quality reproduction of the seal." I welcome readers to compose their own punchlines.

The Interim Bureau of Administration Agency Review Committee put this bill together. They even had the foresight to pre-empt complaints of censorship. Says Section 7:

Nothing in this Act prohibits the reproduction of the state seal for illustrative purposes by the news media if the reproduction by the news media is incidental to the publication or the broadcast. Nothing in this Act prohibits a characterization of the state seal from being used in political cartoons.

Hey, Ehrisman! You're still good to go! But now let's see if there's floor debate on whether blogs meet the Legislature's definition of "news media."

There's much more fun to come from our hearty 105 in Pierre. Stay tuned!

Noem Fails to Land Seat on Agriculture Committee

Someone please unspin this for me: Kristi Noem, soon to be South Dakota's lone Representative in the U.S. House, for all her supposed pull with the new Republican majority, fails to land a seat on the House Agriculture Committee.

The Agriculture Committee is the one committee for which Noem has more experience than I do to serve as a useful member. She relentlessly touted her lifelong farm background on the campaign trail. Right after the election, Noem herself said landing a seat on the agriculture committee was among her top priorities:

Once in Washington, Noem says she hopes to serve on the agriculture committee.

"But then we'll go on from there. Maybe commerce; energy will be extremely important. We'll see what we can do and we'll be on the one that's best for South Dakota," Noem said [Shawn Neisteadt, "Noem Reflects on Campaign, Looks Forward," KELOLand.com, 2010.11.03].

Noem repeated later in November that she wanted an Ag seat, plus Energy and Commerce. She also mentioned Natural Resources.

Noem got little of what she wanted. She landed the Natural Resources Committee, which is apparently "less competitive to get a seat on" (i.e., Noem got the crap assignment), and the Labor and Education Committee, for which she as a non-college graduate from a union-busting state is singularly unqualified. And all Noem's spokesflunky Joshua Shields can whimper in response to a direct question about the failure to get the ag nod is "there are several good committees Kristi considered. She is pleased with her assignments."

My only hope is that she will use her position on Ed/Labor to put her Tea-Bag cred to work and kill No Child Left Behind. Why, oh why, do I keep hoping against hope that Republicans will display philosophical consistency?

Noem's assignments are one more sign that the GOP leadership sees her as more valuable as a trick pony for their fundraisers and press appearances than as a strong voice for South Dakota interests. Maybe they noticed that she never did get around to posting a coherent ag policy on her campaign website. Or maybe even the GOP leadership couldn't ignore Noem's clear conflict of interest over making a living off farm subsidies and subsidized crop insurance.

Either way, South Dakota has just lost its only voice on the House Agriculture Committee, which shapes legislation on all manner of ag issues as well as on the rural electric systems and rural development.

Hasselstrom: Keep Public Land Available for Healthy Grazing

My friend Larry Kurtz says some wild things on his blog Interested Party and in various comment sections around the South Dakota blogosphere. But he also directs us toward a lot of good reading, like this essay on the importance of protecting public grasslands for grazing. Among other points, South Dakota author and rancher Linda Hasselstrom notes the superiority of grass-fed beef to factory-feedlot beef:

E. coli contamination thrives in feedlots, but grass-fed livestock, including beef, pork, chicken, sheep, elk, deer, antelope and other wild meat animals, is free of this dangerous pathogen. Range cattle roam freely, rarely spending more than a day in one spot. They must be branded to prevent theft and vaccinated against disease, but they are herded only briefly into corrals. Since cows live outside in all weather, their wastes are scattered and broken down by elements and insects. Pastured cattle never stand knee-deep in manure, because cows don't like to eat near feces. That's why, in winter, ranchers scatter supplementary feed onto clean grass. Buyers who cram cattle into feedlots for fattening waste resources and in the process make the animals—and those who dine on them—less healthy [Linda Hasselstrom, "Private Stash," Missoula Independent, 2010.11.25].

Mr. Kurtz also directed my attention, via the Goat Blog, to this really cool interactive map that helps you find which states are producing the most unhealthy feedlot beef, dairy, and pork. In 2007, South Dakota ranked 16th nationwide for feedlot livestock units: 8th in cattle, 20th in dairy, 11th in hogs.

Federal Grant Boosts Beginning Farmers

Here's more federal money for John Thune and Kristi Noem to send back to Washington: my friends at Dakota Rural Action just won a $132,200 two-year grant to give new farmers a leg up:

The Farm Beginnings program provides participants the opportunity to learn from local farmers about farm management issues like Whole Farm Planning, Financial Planning, Marketing, Business Planning, and Connecting with Resources. Beyond the formal classes, the course also provides opportunities for networking between beginning and established farmers, the chance to engage in mentorship or apprenticeships if desired, and the chance see sustainable practices being implemented on local farms during the course's farm tours and skills sessions.

...DRA's Farm Beginnings program is funded by the Beginning Farmer and Rancher Development Program of the National Institute of Food and Agriculture, USDA, Grant #2010-03066 ["DRA Gets Grant from Farm Beginnings," Madison Daily Leader, 2010.11.23].

Oh, that darn federal government, spending money to help small farmers and preserve South Dakota's way of life....

Today's Farm Report: Messy, Messy, Messy...

Turning to today's agriculture report, here's the news the ag-industrial complex doesn't like to talk about:

• Remember the salmonella outbreak earlier this year caused by Jack DeCoster and his dirty Wright County Egg operation in Iowa? USDA had found all sorts of violations at the Galt, Iowa, facility prior to the outbreak but failed to report them, because "the conditions at the egg plant packing facilities were routine." Filthy, disease-ridden eggs—perfectly normal. Move along.
• Purple water came pouring from the A. J. Bos mega-dairy near Nora, Illinois, in October. Brown I can explain. But purple? An attorney for Bos says EPA has no authority to intervene.
  
• Bos is also opposing further testing of a site for a proposed dairy site near Galena, Illinois.
  
• Meanwhile, the Illinois Livestock Development Group thinks it shouldn't have to follow any regulations: "If I'm operating the way I'm supposed to, what do I need a permit for and why do you need to know who I am?" says ILDG spokesman Nic Anderson. Gee, I don't know, maybe because a single confined animal feeding operation can generate as much sewage as a small city?

The ag-industrial complex seems to think that producing food entitles them to exemption from the rules of civil society. Sorry, fellas: ag is just another business. Every other citizen has to dispose of waste properly: so do you.

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Related: The Independent Local reports that Senators Tester and Hagan are advancing an amendment to the Food Safety Modernization Act to protect small farms and folks who market directly to consumers in farmers markets from legislation that would check the abuses of the ag-industrial complex. Groups who back local food, like the Western Organization of Resource Councils and Dakota Rural Action, as well as the South Dakota Stockgrowers Association, are backing the Tester-Hagan amendment.

Ag Productivity Tax Risks Revolt

...but GOP Sponsor Opposes Further Study

Remember a couple weeks ago when I asked our District 8 State Senate candidates about the possible farm revolt over the new ag productivity tax (also known as income tax done bass-ackwards)?

Bob Mercer reports in the Pierre Capital Journal on some of the reasons this new tax formula may induce farmers to bring their pitchforks to Pierre. Assessed values on crop land could go up 40% to 90% by 2018. The new tax law limits increases and decreases to 10% a year through 2017, but come 2018, counties could impose much higher increases to catch up with costs, a possibility Mercer says could cause a backlash among landowners. The ag productivity tax formula also assumes that landowners get 35% of the income from cropland they lease out, a figure several members of the legislative task force studying the tax say is unrealistically high.

You know, legislators, instead of guessing how much farmers might make on their land, wouldn't it be easier to simply tax them on the amount they actually make each year?

Senator Jim Peterson (D-4/Revillo) says that before we get our bibbers in a bunch, we need to compare the potential assessment increases with the valuations that would have happened under the old system. I hear from a neighbor that some farm land just east of Madison sold this fall for $6000 an acre. At prices like that, farmers might come out ahead on a tax system based on what the land actually produces rather than the speculative fancies of wealthy city dwellers.

The legislative task force that discussed the ag productivity tax Monday got the state Revenue Department to agree to gather more data on the landowner lease-income percentage to see if the formula needs tweaking. Interestingly, the prime sponsor of the ag productivity tax, Senator Larry Rhoden (R-29/Union Center), argued against any further study:

The task force’s chairman, Sen. Larry Rhoden, R-Union Center, argued against collecting the additional data at this time. He said it’s better to let the system start to work.

Rhoden further warned that the data could merely fuel the arguments of opponents who fought against the new system when it was approved in the 2008 and 2009 sessions of the Legislature [Bob Mercer, "Tax Boost Likely on Ag Land," Pierre Capital Journal, 2010.11.09].

Don't study it, because data might support opponents' arguments? If that's Senator Rhoden's attitude toward studying problems, we should be alarmed about the direction the Legislature will take this year.

If the ag productivity tax is to be fair, it needs to be based on every bit of data we can collect. For the prime sponsor of the tax to advocate closing our eyes to available information puts landowners and taxpayers in danger of being fleeced by a badly designed tax.

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Update 2010.11.12 16:42 CST: Moody County neighbor and rural taxpayer John Walker suffers a rare bout of Madville Times concurrence. Mr. Walker is resting comfortably and is expected to recover fully... in time to lead a pitchfork parade to Pierre in January.

Who Needs Two Parties? GOP Cognitive Dissonance Covers All Philosophical Bases

Dr. Blanchard writes an intelligent critique of political culture in South Dakota. For most of its existence, South Dakota has labored under unhealthy one-party rule. All too often, the state Democratic party has branded itself as imitation Republican. As demonstrated by Tuesday's election results, voters have no reason to buy imitation when they can get the real thing for the same price.

But Dr. Newquist gets me thinking that, if we want a real debate between conflicting ideas, we may not need Democrats. We can just listen to the simultaneously held contradictory positions of South Dakota Republicans:

...for a state that is so predominantly dependent upon federal handouts for its survival, the elimination of those programs would be devastating to the agricultural economy of the state. One comment cast the usual charge of socialist to the post, and I replied that a state that is dependent on so many federal handouts is about as socialist as a state can get.

I have been engaged in reporting on farm programs since I had that responsibility as the farm editor for a newspaper in the early 1960s. There has been a bipartisan concern about the degree to which the farm programs might become a major source of farm income so that it could turn American agriculture into a version of the collectivist system that was such a failure for the Soviet Union. What the commenters cannot grasp is that the matter is not a partisan issue. Both liberal and conservative politicians from urban areas think that budget cutting has to begin with farm programs [David Newquist, "Hey, Democrats...," Northern Valley Beacon, 2010.11.05].

A paltry plurality of South Dakotans (with the assistance of Dem-leaning voters who tended to abstain for lack of choices) just elected to Congress Kristi Noem, a woman who stirs our local Sarah Palin fantasies by promising to cut big government even as she and her family make a living selling federally subsidized crop insurance and collecting more farm subsidies than all but 17 other South Dakota ag operations.

Dang: Maybe Kristi Noem has a first-rate intelligence after all.

But maybe Noem will surprise us and reject the farm socialism that has made her family rich. Maybe she'll bite the bullet and vote for reform of the farm subsidy program that will shift the safety net away from her big-money family and friends and commodity crops and toward the small farms and more diverse healthy foods that really need our support. Voting for continued subsidies didn't protect Congresswoman Stephanie Herseth Sandlin or dozens of other Democrats from electoral defeat:

As of the last count, 46 seats switched from Democrat to Republican in rural districts that rank in the top half in EWG’s farm subsidy database. In every single one of those races, incumbent Democrats who were in office in 2008 supported the last Farm Bill and the generous subsidy structure that brought billions of dollars home to their districts. Yet their support for the traditional subsidy system did not make enough of an impression on voters to shield them on election day [David DeGennaro, "Democrats' Bitter Harvest," Environmental Working Group, 2010.11.03].

EWG notes that Nancy Pelosi caved to big ag interests in the 2008 Farm Bill, thinking her rural members would need the political cover. Oops. Moral of that story: quit thinking about power, special interests, and the next election and just vote for what's right while you have the chance!

In the heart of farm country, voting for big farm subsidies doesn't protect your Congressional seat. So go ahead, Congresswoman-Elect Noem. Surprise us. Assuming you can even formulate a coherent agriculture policy (that would be surprise enough), advocate smaller, better government in agriculture. Get on board with John Boehner, who voted against the 2008 Farm Bill. End corporate socialism by cutting direct payments to the rich folks (like you) who don't need it. Redirect subsidies toward healthy food.

Or just acknowledge that South Dakota is a welfare state and that you, your family, and our whole state rely on socialism, on collective community effort, to survive. Either way, end the cognitive dissonance. After all, we in the loyal opposition can't loyally oppose you if you're occupying both positions at once.

Veblen West Dairy Auction Delayed Two More Weeks

In another sign that the bad guys are winning in South Dakota, the bankruptcy auction of the Veblen West Dairy in northeastern South Dakota has been delayed again. Last week Friday, bankruptcy trustee Forrest C. Allred moved and Judge Charles C. Nail agreed to postpone the auction until November 18. Allred moved on behalf of the contending parties, the Veblen West equity owners and financier AgStar, which apparently "have requested and agreed to further time to discuss possible settlement of the matters in question, and consent to this motion" (says Document 461 in the Veblen West bankruptcy case, Allred's motion filed 2010.10.29).

So the main force behind Veblen West, Richard Millner, may be pulling out a victory after all, cobbling together just enough investors and financial tricks to keep the dairy and thousands of head of cattle in his hands. But that also means there's time for anyother investors interested in acquiring a giant feedlot and a few thousand head of cattle at rock-bottom prices still have a chance to make AgStar and the court an offer.

RCJ Ignores Noem Conflict of Interest on Crop Insurance

The Rapid City Journal is one of the few major newspapers endorsing Republican Kristi Noem over Democratic Congresswoman Stephanie Herseth Sandlin. (Sioux Falls, Aberdeen, and Mitchell papers are backing the incumbent.)

RCJ bases its endorsement on bogus arguments:

1. They grumble that SHS hasn't been visible enough in West River, yet they say nothing about Noem's skipping the KOTA debate, the Rapid City Tea Party rallies, and even a visit from her own national party chair to stay home in East River and shoot birds.
2. They brand the stimulus a Democratic boondoggle, ignoring the good the stimulus is doing in their own backyard.
3. The biggest whopper: the RCJ editorial board chafes at Max Sandlin's lobbying but ignore the Noem family's own blatant conflict of interest:
   

   Some of Herseth Sandlin's decisions have been difficult for the congresswoman, when her personal and/or party's convictions cross with those of her constituents. Noem would have no such conflict [editorial, "Noem in Tune with West River," Rapid City Journal, 2010.10.31].

No such conflict? Bull-roar. In addition to surviving on farm welfare payments, Kristi and Bryon Noem sell crop insurance. Crop insurance has been recognized by Republicans and Democrats as a "textbook example of waste, fraud, and abuse in federal spending." Crop insurance companies have regularly made three to nearly five times the benchmark rate of return on their policies. A 2007 report from the Government Accountability Office found that from 1997 to 2006, 42 cents out of every federal dollar spent on the crop insurance program went to the crop insurance companies, not to farmers.*

In response to this waste and inefficiency, the 2008 Farm Bill includes a new Standard Reinsurance Agreement that cuts six billion dollars from the crop insurance program and applies some of those savings to reducing the deficit. Those savings come in part by capping commissions for crop insurance agents like the Noems.

Those caps don't kick in until next year. Put Kristi Noem in office, and she'll have a chance to repeal those caps before they cut into her family's crop insurance profits. Wouldn't that be a nice little anniversary present for Bryon?

No conflict of interest there, is there, Rapid City Journal? Noem is clearly in tune with West River and South Dakota values of taking every penny we can from Uncle Sam.

Congresswoman Stephanie Herseth Sandlin has explicitly addressed concerns about her potential conflict of interest... in the pages of the Rapid City Journal itself. Kristi Noem has said nothing about her own direct business interest in the federal crop insurance program that she'd like the chance to vote on. In manufacturing its endorsement of Noem, the Rapid City Journal is holding the GOP challenger to a much lower standard than it applies to our incumbent Congresswoman.
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Bonus endorsement ding: RCJ concludes its Noem endorsement by saying "This country needs elected officials with positive, proactive solutions." That's funny: Kristi Noem hasn't offered any positive, proactive solutions. She hasn't even offered a clear agriculture policy.
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*That same 2007 GAO report suggest another possible connection between Noem, crop insurance, and the Farm Service Agency. The GAO found that the Farm Service Agency was not conducting enough inspections to prevent bogus crop loss claims. Crop insurer Kristi Noem served on the state committee of the Farm Service Agency in the 1990s. What government connections might Noem have made then that are now helping her crop insurance business?

Noem on Farm Subsidies: Everybody Else Gets $200K a Year from Uncle Sam, Right?

In an interview with the Rapid City Journal a couple weeks ago, South Dakota's GOP candidate for U.S. House Kristi Noem addressed the question of her family's huge reliance on federal farm subsidies. Watch the video:



Says Noem:

What our family has done is participate in the farm programs. And so the farm programs I think essentially almost every farmer in South Dakota has participated in those, and they haven't been bailouts they have been programs that the United States has put forward for farmers to participate in.

It's all about national security, says Noem, so we don't have to depend on other countries for food. Fear, everyone. Fear.

Noem says every farmer and rancher would prefer more risk management programs to direct payments, a position she's taken in other discussions like the State Fair debate.

Noem concludes by claiming, "We've done what every other farmer and rancher has done by participating in those [programs]."

Actually, no, Kristi. You haven't done what every other farmer and rancher has done. As the invaluable Environmental Working Group notes, the vast majority of farmers get little benefit from farm subsidy programs. 26% of South Dakota farmers get no subsidies. 10% of South Dakota farmers claim 61% of the subsidies sent to our state. The bottom 80% have collected an average of $1,334 per year since 1995. The top 10% have collected an average of $35,077 per year since 1995.

Your family, Kristi, has taken over three million dollars in subsidies over the last 15 years. That's $200,000 per year. That's more federal handouts than all but 17 other farm operations in the entire state have taken over the same period. Three million dollars is six times the amount I've earned in paychecks since 1995.

On farm subsidies, Kristi Noem again demonstrates her inability to square the anti-government, free-market principles she spouts for her Tea Party supporters with her family's dependence on federal handouts for fiscal viability.

Germany, Corn, Catangui, Monsanto... Mercenaries?

This is my black helicopter post for the week. Consider it just a reminder for the file cabinet rather than an official brief for the court.

Some Twitter-wandering informs me that Germany banned MON 810, Monsanto's genetically modified Bt corn, in April, 2009. As I understand it, this is the same corn that Dr. Mike Catangui's research connects with pest replacement, specifically the recent spread of western bean cutworm and corn leaf aphids. Dr. Catangui was fired this year by SDSU, which is run by a Monsanto executive board member, for using his research as the basis for his advice to farmers.

The German ban has caught heck from various boards and researchers. Germany's own Central Commission for Biological Safety said the Germany's MON 810 ban is not scientifically grounded. Three French researchers published a pretty hefty meta-study in 2009 coming to the same conclusion. But I see no mention of Catangui's research in either of those critiques.

Would Monsanto squelch research that demonstrates negative impacts from its products? Would they go so far as to persuade a university to violate academic freedom to do so?

Well, remember: we're talking about Monsanto, a corporation that hires Blackwater/Xe to spy on activists who oppose its GM products. Monsanto enlisted operatives from the mercenary company to infiltrate activist groups for the purpose of "protecting the Monsanto name."

I'll keep looking for puzzle pieces....

Veblen West Trustee Skewers Bogus Lease Plan, Calls for Nov. 1 Sale

Trustee Forrest C. Allred lost his bid to liquidate the Veblen West Dairy last week, but he's not done fighting the tricky owners of that polluting dairy. Attorneys for financier AgStar*, which has a big stake in the dairies, filed a blistering brief last week that confirms what readers here have heard: the Veblen West owners' plan to lease their bankrupt dairy back to themselves and their objections to last week's sale are a sham intended to delay court action until Rick Millner can talk enough investors into floating him the capital necessary to keep the "hopelessly insolvent" dairy in his hands.

Extra kudos to attorneys Damgaard and Morehead for banging out this damning 18-page assessment of Millner et al.'s hoodwinkery in less than 24 hours. You guys should blog!

Some highlights from the brief [In Re: Veblen West Dairy, "Brief In Response To Objections Of Certain Equity Owners Of Veblen West Dairy Llp And Hill Grain Farms, Inc., To Trustee’s Motion For Authority To Sell All Or Substantially All Assets Of The Bankruptcy Estate By In Court Auction," U.S. Bankruptcy Court, District of South Dakota, Case 10-10071, Document 441]:

Some of the Equity Owners were apparently able to obtain financing for, and successfully bid at the Veblen East 363 sale. The Veblen East sale featured notice and bidding procedures that were materially-indistinguishable from Trustee Allred’s. In fact, the 363 Motions in East and West are nearly identical in that regard. This begs the question: why are the Equity Owners objecting now, when some of them purchased Veblen East under identical conditions? Clearly, the Equity Owners were unable to secure the necessary financing to purchase Veblen West. They are objecting to buy more time. The plan the Equity Owners have proposed is so deficient in so many ways, that it must be an effort to delay the proceedings [p. 9].

The evidence will show that Vantage Cattle, one of the Debtor’s related insider entities, and a source of replacement heifers for debtor, did not have a claim against the Debtor as of the date of filing. Indeed, Vantage Cattle is not one of the creditors in Debtor’s case. However, the evidence, including Debtor’s aged accounts payable reports, will show that, in August and September 2010, the Debtor purchased approximately 450 head of fresh replacement heifers at a cost of over $680,000. But the Debtor never paid for them.

This evidence will highlight the Debtor’s efforts to show a positive cash flow, while keeping cattle numbers up artificially. During June and July 2010, the Debtor’s cattle herd numbers dropped significantly. (Doc. 253 at 8-22.) The Debtor was then faced with a choice. It could spend the money on cattle and show a negative cash flow, or it could continue to experience a drop in cattle numbers and a drop in milk production. Either result would have been damaging to Debtor’s claim that it could successfully reorganize. The Debtor avoided these two alternatives in part by obtaining hundreds of additional cattle from its insider-owned sister entity, Vantage Cattle. But Debtor but did not pay Vantage for the livestock. If it had, it could not have shown a positive cash flow. In other words, Debtor has covered up its negative cash-flow by playing a shell-game with an insider related entity. It is this type of insider transaction that led to a Trustee being appointed in this case [emphasis mine; pp. 13–14].

The Equity Owner’s plan also comes with projections purporting 8 to support their claim that the plan is feasible. (Doc. 412 at 127 – 156.) However, when even a few of the assumptions made in those projections are tested, it is clear they are simply too optimistic to be believed. The Equity Owners rely on a “pounds of milk given, per cow, per day” assumption starting at 77 lbs/cow/day, quickly escalating to 81/cow/day. During the case Debtor has never achieved that target, and has at times been under 70 lbs/cow/day.

The Equity Owners also assume a combined cull and death loss for the cattle of 2.62% monthly or 31.44% on an annualized basis. Through Sept, 2010, the Debtor’s herd has an annualized cull and death rate of 60.5% and that, during the same period, the Veblen East lactating unit has an annualized rate of 64.8%, showing that the 2010 results West has achieved are not artificially poor by comparison. In other words, the Equity Owners’ projections assume a much lower expense for herd replacement–one of the largest expenses in the projections [footnote, p. 14].

Trustee Forrest C. Allred filed a new motion yesterday requesting a sale free and clear of liens on November 1. The motion notes that certain members of the Veblen West ownership have asserted that the dairy will be in full compliance with the environmental clean-up ordered by DENR of the dairy's manure lagoons. DENR has not confirmed but will be inspecting on Friday, the deadline for compliance. Interested parties have until October 29 to file objections.

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correction: I originally incorrectly attributed the brief to bankruptcy trustee Forrest C. Allred. The brief actually came from attorney Roger Damgaard and Sander Moorhead, representing AgStar. I regret the error.

Frerichs: Noem Offers No Clear Agriculture Policy

While the conservative commentariat drools over process stories and reaffirms that negative ads are only bad when they're about your own candidate, Rep. Jason Frerichs points out an ironic gap in Kristi Noem's online talking points:

I was looking at the websites for the major South Dakota candidates, and noticed that Scott Heidepriem, Dennis Daugaard, and Stephanie Herseth Sandlin all think enough of agriculture and rural folks to note where they stand but, to my astonishment, Kristi is the only candidate who doesn’t. She lists things like “Medicare fraud” and “Immigration”–which she apparently feels are important enough to mention–but not ag or rural issues?

As a South Dakota farmer and rancher I find it appalling that the Republican candidate for Congress has left us in the dark.... The lack of relevant policy details on Kristi Noem’s website concerning South Dakota agriculture indicates a disconnect between her campaign and everyday farmers and ranchers [Jason Frerichs, "Press Release: Frerichs Asks Noem to Show Her Ag Issues," JasonFrerichs.com, 2010.10.12].

Disconnect indeed. Nearly every ad Noem sends out shows her on the farm with her horsey. But after eight months of campaigning, she hasn't bothered to put a statement about South Dakota's number-one industry on her website? Maybe talking about farm subsidies is just too hard.

Noem is another glittering example of image over substance. Given Noem's eagerness to run as the cutest little farm girl this side of the Missouri, her inability to articulate clear agricultural policy is particularly egregious.
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Bonus Noem Policy Blind Spot: Families USA says 63,000 South Dakotans will qualify for a big middle-class tax cut in 2014, thanks to this year's health care reform law. But Noem just cries Obamacare! like all the other Republicans and vows to repeal it. Noem wants her farm subsidies, but she sure doesn't want you getting a tax break.

Republican Farmer and Candidate Could Do Without Subsidies!

An eager reader sent me a note about District 19 House candidate Edward Van Gerpen from Avon asking when Van Gerpen had served in the Legislature. I check the historical index (neat-o!) and find he served four terms in the House, from 1985 to 1988 and from 1993 to 1996.

I also find a transcript from the Farm Bill Forum at the 2005 State Fair which includes Van Gerpen's rejection of farm subsidies. Mr. Van Gerpen is addressing USDA Undersecretary Tom Dorr and a question posed by moderator Michelle Rook: "[H]ow should farm policy be designed to effectively and fairly distribute assistance to producers?"

Mr. Secretary and Michele, I am Ed Van Gerpen from Avon which is about 100 miles south here, Avon, South Dakota, Bon Homme County. I farm with my two sons. I’ve been farming for about 50 years. As I look back we’ve had about every imaginable farm program you could have. So I guess I’m not overly optimistic that you are going to come up with the ultimate Farm Bill.

I find that as I talk to people more and more that they say the only thing we haven’t tried is no Farm Bill. And I personally would be one vote in favor of no Farm Bill as far as subsidies is concerned. But I think we need to be involved in the disaster part of it.

I would also like to center on question number three as far as payments. Yesterday I was in northwest Iowa and I know Mr. Secretary, you are familiar with that area, they raise excellent crops there in Sioux County. And this dairyman had just finished cutting silage and he says, one field he went and got his LDP, and he got 40 cents a bushel and the corn made 200, so he got $80 an acre subsidy on that excellent crop.

Where I live, we are in the dry area this year and our corn will maybe make 30, 40 bushel. If I would get that same LDP payment, I would get $16. Now, he was actually making fun of it. He says, “I don’t need that $80.” He says, “I’m getting a really good crop this year.” And I think that just shows some of the inconsistencies of the Farm Bill. The higher crops you raise, it seems like the more money you make when it’s just reversed. So I think the government should be involved with the disaster end of it, but not the subsidy part of it.

And I guess another reason I’m so against the subsidy part of it, I have a list here of the payments from 1995 to 2003. And that’s available on the Internet. But the tenth, number ten, nationwide was Ducks Unlimited in Cordova, California. They received $20,391,000. Now, how can that possibly happen in a Farm Bill, Ducks Unlimited receives that kind of money?

Thank you, Mr. Secretary [Edward Van Gerpen, Transcript of the South Dakota Farm Bill Forum with Under Secretary for Rural Development Tom Dorr and Moderator Michele Rook of WNAX, South Dakota State Fair Huron, South Dakota, 2005.09.07].

And thank you, Mr. Van Gerpen, for you forthrightness on one of the biggest examples of big government interference in South Dakota's free market.

Now tell me again, why haven't we heard similar forthrightness on this issue from our Republican candidate for U.S. House? (I can think of 3,058,152 reasons.)

America Feeds the World: Thank Immigrant Labor!

Troy Hadrick cites this AP article finding Americans won't take low-wage farm jobs and offers this sanctimonious conclusion:

Regardless of your position on immigration, the bigger story here is that many people don’t want to work even when jobs are available. Unfortunately, many people don’t develop a work ethic and would rather rely on the government for an unemployment check. It’s a rather sad commentary on our society [Troy Hadrick, "Americans Don't Want Farm Jobs," Advocates for Agriculture, 2010.09.29].

Leave it to a professional propagandist for the ag industry to offer pompous distractions from practical policy issues. Hadrick pops off with arrogant, manly-man horsepuckey about how the rest of society obviously isn't as industrious or independent as he is. He deliberately spins away from the bigger story, which is that your cheap groceries come thanks immigrant labor, much of it driven here by our own predatory trade practices, and the immorally low wages the ag-industrialists pay their workers.

Hadrick's agriculture industry likes to repeat the mantra Tell Your Story. The immigrant workers who ensure our food supply would like to have time to tell their story, too, but they're too busy doing our work and feeding America.

So the next time the ag-industrial complex tells you to Thank a Farmer®, maybe you should walk over to the Mexican part of town and say gracias to an immigrant.

Newquist Knocks Noem (and Farm Subsidies, Monsanto, Media, Bloggers...)

The good Dr. Newquist is blogging a relative blue streak lately, doing determined battle with boorish KELO commenters and related forces of intellectual and cultural decline. His Monday post on farm subsidies and Kristi Noem runs to 2300 words, without any lengthy blockquotes from other source. It's all Newquist... another reason I like his blog.

The post encompasses much—less polite or patient reviewers might say it rambles. But rambling is good for the intellect. Dr. Newquist begins with his ambivalence toward farm subsidies, then connects his concerns about the decline of journalism and democracy, the "yammering" of the blogosphere, and finally, the unreadiness of Kristi Noem for Congress. He assesses Noem's performance on farm issues and other questions at the Corn Palace and State Fair debates and concludes Noem doesn't have answers on farm subsidies or anything else:

In my lifetime, journalists who did not prepare for assignments got fired. Students got failed. Noem did not prepare....

The Republican tactic of performing an Orwellian portrayal of Nancy Pelosi as an enemy and then mounting an entire congressional campaign on their cheap ad hominem attempt to hide the real issues under a smear is put to work by Noem in South Dakota.

It is not a question of whose ideas are better for agriculture. It is a matter of who has informed themselves about what the issues are and how they affect the state. As she did with the traffic tickets, Noem has chosen to blow those issues off, too. She does not present herself as one who knows what is taking place in agriculture or who really cares [David Newquist, "The End of Farming and What Kristi Noem Proposes," Northern Valley Beacon, 2010.09.13].

Read Newquist's full post here. It's worth your time.

Bankruptcy Trustee Asks to Liquidate Veblen East Dairy

The environmental atrocity known as Veblen East Dairy may be headed for the auction block. In motions filed in South Dakota's federal bankruptcy court last Friday, Chapter 11 Lee Ann Pierce requests authority to put the whole kit and kaboodle up for sale. Pierce's motion describes the property to be liquidated as follows:

Veblen East Dairy is located at 10530 448th Avenue in Veblen, South Dakota. The dairy was constructed during 2007 and 2008 with a capacity for approximately 8,100 cows consisting of both milking cows and transition facilities (calving/freshening) for its own operations and transition capacity for affiliate dairies, which could continue to be used in that manner or be converted into free stall space. It began operation in early 2008. There are two main barns, each with 2528 stalls and 3181 lockups/spaces. The barns are 16 row barns with cross ventilation, cool cells, and sand bedding. There is a milk center that houses two parlors, each parlor a double 30 parallel parlor. This building houses a water system room with filtration and softeners, chemical room, equipment room, milk room, and a milk load out room. The load out room can accommodate six semi tanker trucks in six bays, (three on each side of the building), with three 12X14 overhead doors on each end of the building for drive through capabilities. Attached to the milk center is a 740 stall barn. The fourth barn is a 6 row barn with 657 stalls. In between Barn 2 and Barn 4 is the hospital barn with a double 10 milking parlor (exception parlor) with calf pens, sick pens and birthing pens, and loadout facilities. The manure system includes two sand separating and pumping buildings, manure flumes and reception pits. It utilizes eight earthen manure lagoons, each with a capacity between 14 million gallons to 16 million gallons. Debtor is situated on 200 acres of real property, and there are approximately one million square feet under roof. The herd consists of the following breeds/crossbreeds with approximate percentages as follows: Holstein (2%), Jersey (8%), Montbéliarde (10%), Scandinavian Red (20%) and Holstein-Jersey (“Hojo’s”)(60%). Debtor’s current herd consists of approximately 3,100 lactating cows, 1,300 dry cows, and 600 fresh cows. The dairy employs approximately 74 people [In Re: Veblen East Dairy Limited Partnership, Motion for Order Authorizing Sale..., Case 10-10146, Document 186, United States Bankruptcy Court, District of South Dakota, filed 2010.09.03].

Pierce now pegs Veblen East's debt to AgStar Financial at $42,236,160 and says liquidation of all collateral will bring "substantially less" than that amount.

What exactly would Pierce sell? Everything:

1. all real estate owned by the Debtor and as legally described in this motion. The sale of the real estate includes all land, buildings, land improvements (including, without limitation, any parking lot pavement, parking stops, traffic signs, sidewalks, driveways, fences, gates, exterior lights, tanks, alarm systems and signage structures owned by Debtor), and any and all beneficial easements, rights and licenses which are appurtenant to such real estate.
2. all furniture, fixtures, equipment, machinery, computers, hardware and software, telephones, vehicles, trailers and other tangible personal property owned by the Debtor including but not limited to those items of personal property set forth on Exhibit A. Any assets in which a creditor holds a purchase money security interest will not be sold as part of this transaction. A list of the assets of which the Trustee is aware that there is an issue with a purchase money security interest is included in paragraph 14 of this motion.
3. all milk cows, dry cows, calves and heifers. The Trustee estimates that approximately 5,000 cows will be available to be sold as part of this transaction.
4. all inventory, raw materials and supplies of the dairy, including feed, drugs and hay including any rights the Debtor has to silage located at New Horizon Dairy or Five Star Dairy. Any milk inventory located at the dairy on the date of closing will be included in the sale to the Buyer.
5. all rights of the Debtor under any warranty or guarantee by any manufacturer, supplier or other transferor of the purchased assets of the Debtor.
6. Debtor’s intellectual property rights to technology, licenses, construction or plans, drawings, memos, blueprints, and other work product of consultants or architects, telephone numbers, telecopy numbers and e-mail addresses and listings relating to the dairy.
7. to the extent legally transferable, all permits, licenses and approvals received from any governmental entity for the Debtor;
8. all leasehold improvements, signage and prepaid deposits;
9. all rights, claims and causes of action of Debtor against third parties relative to the purchased assets and the proceeds thereof, excluding avoidance claims, tort claims against Veblen East Dairy Limited Partnership’s current and former officers and directors, partners, and claims giving rise to Debtor’s rights of set off with respect to its creditors. Avoidance claims means any and all claims or causes of action under Chapter 5 of the Bankruptcy Code. The right to prosecute avoidance claims will be retained by the Trustee [Document 186, 2010.09.03].

The motion sets initial bid for the property at $16 million and initial bids for cattle at $800 per cow.

Now if you're just itching to bid on some big manure lagoons, keep in mind that this CAFO has a history of environmental violations. If you buy the dairy, you also buy liability for complying with all environmental clean-up. According to a previous filing in this case, it will be nearly impossible to clean up that mess and satisfy the May 3 Complaince Agreement with the Department of Environment and Natural Resources without shutting down the dairy and removing the cattle from the premises.

As an added bonus, the buyer will have to satisfy the terms of a lawsuit settled by Rick Millner and company with Sunflour Railroad. Apparently when Veblen East took dirt and fill from Sunflour's railbed to build its sewage lagoons and encroached on the railroad's right-of-way. The debtor will still pay the $175,000 settlement to Sunflour, but if you buy the dairy, you will have the pleasure of reworking the lagoons to restore Sunflour's right-of-way, removing contamination from Sunflour's right-of-way, and build and maintain three new manure pipe crossings under the railbed.

Wow—the Sunflour settlement is just more evidence that Rick Millner can't do business without crapping on his neighbors.

Note also that the Veblen East property is subject to more liens than there letters in the alphabet. These liens include unpaid 2009 (due 2010) property taxes of $115,517.34. That doesn't sound like the kind of business venture I'd touch with a ten-foot lawyer. Millner essentially has driven this big dairy dream into the dirt.

Again, the debtor has until noon Monday to file objections. After that, we may see one fast, massive ag auction in bankruptcy court.

Catangui Research Shows Monsanto Corn Helps Spread Pests

South Dakota State University's firing of entomologist Mike Catangui has struck me as odd from the beginning. The Extension Service advocates a regional standard for spraying soybeans for aphids. Dr. Catangui declines to advocate that standard, pointing to his research that suggests South Dakota farmers should follow a different standard. SDSU and the Board of Regents decline to continue Dr. Catangui's employment.

Monsanto executive board member and SDSU president David Chicoine has provided no explanation for Catangui's firing or for the university's apparent violation of due process that could get the university in hot water again with the American Association of University Professors.

A professor is fired for expressing views based on his peer-reviewed, published research. It just doesn't add up. That's why I've kept wondering if this case is revealing the fruits of Monsanto's corporate control over our land-grant university. Is there some way in which Catangui's research could be damaging to Monsanto?

Stop right there. I rail against other conspiracy theorists for seeing plots and cabals (and liberal media monsters) where there are none. But we all see what we want. I may be looking for a grand design where there is none. Cantangui's dismissal could well be just what the university said it was: "performance deficiencies" and insubordination. For all we know, Catangui may have mooned the boss.

So let me be clear: I have no documents to prove that Monsanto ordered Catangui's dismissal. I only have some casual Googling and reading well out of my field that establish that Catangui's research includes some findings relevant to a Monsanto product. I have pieces, but no finished puzzle... and not even evidence that there is a puzzle to finish.

But there are pieces. It's a lot of science, so I'll boil it down and then provide you with the bibliography.

Dr. Catangui has done research on the spread of western bean cutworm. This pest used to be no big deal. But since the introduction and widespread planting of Monsanto's genetically engineered Bt corn, western bean cutworm has been cropping up in higher numbers and in new places. Bt corn also appears to be an inviting home for corn leaf aphids. The western bean cutworms and corn leaf aphids appear to be benefiting from pest replacement: the toxins in Bt corn wipe out targeted competitor species, allowing previously minor pests to pig out and flourish. Monsanto and other corporations then trap farmers on a treadmill of new pesticides and seeds engineered to tackle the new pests... and all the while we dine on a revolving smorgasbord of tasty toxins.

Now Catangui isn't the only guy saying these things, so one could argue that Monsanto wouldn't benefit by targeting one professor in South Dakota. But Monsanto does have a history of going after small operators, and corporations do profit by maximizing every marginal percentage. When Monsanto wants 100% control and zero competition, even one less set of critical scientific eyes on their products may be worth the effort. And hey, you don't buy control of a major land-grant university for nothing.
-----------------------------------------
Read more:

• Catangui, M.A., and Berg, R.K. (2006). "Western Bean Cutworm, Striacosta albicosta (Smith (Lepidoptera: Noctuidae), as a Potential Pest of Transgenic Cry1Ab Bacillus thuringiensis Corn Hybrids in South Dakota," Environmental Entomology, 35(5): 1439–1452.
• Collins, S. (2003 Aug 3). "Bt Doesn't Control Me," Corn & Soybean Digest.
• Faria, C.A., Wäckers, F.L., Pritchard, J., Barrett, D.A., Turlings, T.C. (2007) "High Susceptibility of Bt Maize to Aphids Enhances the Performance of Parasitoids of Lepidopteran Pests," PLoS ONE, 2(7): e600. doi:10.1371/journal.pone.0000600
• Schafer, S. (2010 Mar 27). "Insect Outlook," Farm Journal:AgWeb.
• SDSU (2008 Jul 21). "Corn Producers Now Should Scout for Leaf Aphids," Plant Management Network: Plant Health Progress.
• Then, C. (2010 Mar). "New Plant Pest Caused by Genetically Engineered Corn," TestBiotech report.
• Tonneson, L. (2009 Feb). "Corn Leaf Aphids Threaten Corn," DakotaFarmer.com.

Herseth Sandlin vs. Noem: Helping Farmers Get Loans

Part 3 of the Madville Times' South Dakota State Fair Congressional Debate analysis

Question #2 in Sunday's Congressional debate: What do you plan to do to help the current ag lending situation? Had I faced this question, I'd have been left hemming, hawing, and deferring to our Congresswoman just as B-Thom did. I'll see if I can get right what the ladies in the race had to say:

Stephanie Herseth Sandlin said she discussed this very issue with dairy producers on Saturday and called for changes in the Commodity Credit Corporation. She said farmers should be allowed to count silage in collateral value. The Congresswoman said we need to make sure Farmer Mac and cooperative lending institutions don't get caught in regulatory burdens that should properly be aimed at the Wall Street fatcats who swamped the economy. She said she worked with House colleagues to make sure this summer's Wall Street reform act carried such exemptions. Herseth Sandlin mentioned her work on expanding financing opportunities for young farmers and ranchers (I didn't catch mention of a specific bill; Herseth Sandlin did sponsor the Beginning Farmer and Rancher Opporunity Act of 2007, though that didn't make it out of committee).

Herseth Sandlin then branched a bit with some indirect solutions. She noted that she has supported renewable energy, ethanol, wind power, and community wind projects (hey! she said community wind! Whoo-hoo!). Expand those programs, and you expand the ability of farmers to diversify their portfolio, which in turn expands their potential for cash flow and ability to get loans from the bank.

Kristi Noem started her answer by recycling an earlier talking point about the need for permanent disaster relief. Noem said disaster payments need to come the year of the disaster, not later, so farmers can get the cash flow they need to get loans for the next planting cycle. She said we shouldn't limit producer abilities to look at forward contracts and get premiums for the product they produce.

Noem then turned to foreign trade. She said the House has had three opportunities to approve trade agreements with other countries but has failed to take action.* Noem said we must open up trade to get good markets for our crops, which boost cash flow, which make it easier to get financing. She then started to say something about the Wall Street reform bill, but her answer ran over the time limit.

Assessment: Both candidates offered some Rube-Goldberg economics. Help farmers make money in other ways, and they'll have more collateral to get more loans? I guess that makes sense, although I would speculate the questioner was thinking more about the complications the farmer faces with paperwork, interest rates, tax rules, etc., the aspects of the lending process that Congress can change directly. On that line, Herseth Sandlin provided more direct solutions. Advantage Herseth Sandlin on substance.

*In response to a later question on unemployment, Herseth Sandlin pointed out that Noem was blowing smoke on these trade agreements. Herseth Sandlin says the three agreements Noem references (apparently with South Korea, Colombia, and Panama) have not yet been transmitted by the President to the Congress, meaning Congress has never had a chance to vote on them. President Obama wants these deals done, but the agreements, negotiated by the Bush Administration in 2007, have been stalled by Democratic opposition in Congress.

Herseth Sandlin vs. Noem: Where to Cut Farm Bill?

Part 2 of South Dakota State Fair Congressional Debate analysis

The first question at Sunday's ag-focused debate asked what cuts the candidates would propose for the farm bill.

Kristi Noem went first. She said that farmers are looking more for risk management assistance than direct payments. She said the 2008 Farm Bill moved in that direction. Noem then lamented that only 18% of South Dakota farmers participate in the ACRE program.

Noem took a moment here to mention that we need someone in Congress who understands farms (the implication being that she's a better choice since she has lived on a ranch while managing her hunting lodge, a never-mentioned insurance business, and her mom's Watertown café than her opponent who grew up on a farm, then went away to college and Congress).

Noem proceeded to say that South Dakota needs permanent disaster relief. She pointed to $75 million in disaster payments the state has received but complained that the U.S. House missed an opportunity to make those payments permanent.

Ultimately, said Noem, we need to simplify programs like ACRE to make it easier for farmers to take advantage of federal assistance (as her family has, to the tune of $3,058,152 in farm subsidies from 1995 to 2009, a haul establishes the Noems has the 18th biggest recipient of farm subsidies in South Dakota over the last 15 years).

Now read all that again. The question was about making cuts in the farm bill. Noem hinted at cutting direct payments in her first sentence, but the rest of her answer focused on making more assistance available to farmers.

Herseth Sandlin listened and called Noem out. She said the question was about cuts and said Noem doesn't offer specific solutions but just tells you what's already in the bill.

Herseth Sandlin said direct payments will take more cuts, simply because they are harder and harder to justify to taxpayers. She said cuts to conservation programs in the 2008 Farm Bill were a prelude to future hard decisions (I'm not sure I like that answer—we're going to cut more from conservation?!—but she's telling us where the cuts will happen).

That said, Herseth Sandlin did go farther afield, saying that the cuts already made by her House Ag Committee are the kinds of responsible cuts every committee should be making. She said her committee found $6 billion in savings in the 2008 Farm Bill, redirected $2 billion to support necessary programs, and put $4 billion toward deficit reduction. Herseth Sandlin said that while ag programs can take some cuts, she will demand fiscal responsibility like that from all areas and not let the farm bill be the lone whipping boy.

Assessment: Talking cuts is unpleasant. Talking cuts to ag spending at the State Fair is downright risky. Both candidates do some dodging, but Herseth Sandlin gives the more direct answer and takes a hard shot at her opponent. Advantage Herseth Sandlin on substance and elbows.