Wisconsin Lawyer: What's the Buzz? 2018 Farm Bill :

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  • Wisconsin Lawyer
    June
    12
    2019

    What's the Buzz? 2018 Farm Bill

    Thomas J. McClure

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    The 2018 Farm Bill's reforms, technology investments, and rural-to-urban diversification provisions will stir up new business for strapped farmers and emerging entrepreneurs. It also presents opportunity for Wisconsin lawyers who represent such clients.
    hemp plant

    On Dec. 20, 2018, President Donald Trump signed the Agricultural Improvement Act of 2018 (hereinafter the Farm Bill or the bill). The next day, on Dec. 21, 2018, the Milwaukee Business Journal ran a remarkable story. The article revealed the Milwaukee County Parks Department was taking steps to grow hemp in the Mitchell Park Domes greenhouses for revenue.1 Hemp is derived from the cannabis plant, as is marijuana. Under prior law such activity at the Domes might be criminal. Such a story would not be business news, but instead, scandal. So what changed Wisconsin culture recently? The answer is the evolutionary Farm Bill.

    The Farm Bill breaks new ground, culturally and agriculturally. Beyond improving U.S. agriculture with subsidies, technology, insurance, and loan reforms, the 2018 Farm Bill makes possible and promotes urban farming. But most significantly, the bill expands a recently legalized product field – cannabis “crops” – with extraordinary financial potential.

    The 2014 Farm Bill first legalized pilot projects in hemp farming. But the 2018 Farm Bill, along with 2017 Wis. Act 100, and a May 10, 2018, supportive Wisconsin Attorney General opinion, have created a revolutionary new agribusiness with many profitable possibilities.

    Attorneys with their ears to the ground are picking up on the “buzz” about the bill. This article surveys the bill generally, its progressive highlights, and its relevance for lawyers. All Wisconsin counsel should take stock of this law.

    What Is the Farm Bill?

    The Farm Bill is the latest in a series of federal farm bills, which expire and are reenacted, with changes, approximately every five years. This 1,008-page $867 billion dollar legislation is an omnibus bill, in which Congress has combined farming support, public nutrition, and conservation legislation.

    Thomas J. McClurecom tmcclure2 yahoo Thomas J. McClure, Marquette 1980, is a trial attorney and solo general practitioner with McClure Law Offices, Delafield.

    The bill’s titles encompass pillars of the American agricultural economy: commodities, conservation, trade, nutrition, credit, rural development, research, forestry, horticulture, and crop insurance. In 2018, for the first time, Congress included an additional (11th ) title in the Farm Bill. This “miscellaneous” title covers farmer outreach for people new to farming, socially disadvantaged individuals, and veterans. The bill passed with strong bipartisan support (Senate 113-87, House 369-47).

    The U.S. Department of Agriculture (USDA) administers Farm Bill programs. The original Farm Bill was enacted during the Depression and Dust Bowl era, as the Agricultural Adjustment Act of 1933.2 The bill’s purpose was to create an agricultural safety net: a perpetual commitment to America’s farms and national food security. But the 2018 version appears to steer its policies in new, groundbreaking, directions.

    Why the Farm Bill Matters

    Only 2.1 million out of 327 million U.S. citizens are farmers but they, and Congress, end up deciding how one-half of U.S. land is managed and food is produced.3 Farm Bill subsidies and other provisions ensure the stability of American food producers and the food industry and safeguard against climate, trade war, and tariff challenges. Farm support comprises only 25 percent of the bill’s expenditures. Direct subsidies to farmers are only the second largest expense in the Farm Bill.4 The Farm Bill’s major focus is access to nutrition. The bill contains the national food stamp program now known as SNAP – the Supplemental Nutrition Assistance Program.5 More than 75 percent of Farm Bill funds (about $664 billion) are allocated to the nutrition title.6

    Traditionally some called the Farm Bill the Food Bill.7 But this 2018 Farm Bill might be called the cannabis bill. The bill allows for a whole new field: previously outlawed cannabis products. These new laws are expected to spin off new businesses, for both edible and nonedible cannabis products.

    Many uses of hemp

    Criticisms and Controversies

    There is criticism of the bill’s fiscal largesse.8 Some argue the bill is mostly a powerful tool of special interest lobbies.9 Others argue only “small and midsize producers” should receive funding; they say the bill should be about “saving the farm,” not the top 10 percent of farm corporations.10 Others criticize the bill’s discretionary funding as unfocused and excessive,11 and say it is time for the “romance” uniting a farm bill and a food (stamp) bill to be declared dead; the programs should be “divorced” for transparency reasons.12

    One redeeming fact for some observers is the 2018 bill’s expense is within budget projections and does not increase the federal deficit.13

    More than 75 percent of Farm Bill funds (about $664 billion) are allocated to the nutrition title.

    The bill also sprouted social controversies. School lunch guidelines and welfare work requirements were the topics of early debates.14 Some commentators allege there are unabated “structural” issues preventing minority access to business ownership and say there is a need for racial and social equity for farm workers.15 Tribal nations’ demands for parity with state governments’ autonomy and benefits eventually were accommodated.16 High-visibility cannabis provisions quickly popped up as headlines. Even the animal rights lobby shepherded through provisions regarding animal treatment, such as outlawing sales of dog and cat meat, animal sport fighting, and “retaliation against pets arising from domestic abuse disputes.”17 All of these controversies seem a bit at odds with the bill’s traditional “farm support” purpose. But the bill is progressively changing.

    Hot Topics In the 2018 Farm Bill

    At enactment, the U.S. Secretary of Agriculture commented that this Farm Bill is more “evolutionary than revolutionary.”18 But it does contain some novel concepts. Five initiatives stand out in this context:

    • a provision giving a $125,000 subsidy to any farmer relative ($250,000 if they are married) as a recruiting tool;

    • a landmark hemp decriminalization and regulatory scheme;

    • CBD oil legislation;

    • increased conservation and agricultural technology funding; and

    • urban farming supports.19

    After much debate, the issue of work requirements for SNAP recipients died on the vine and were not added to the bill.20

    Subsidies to Nonfarming Farmer Relatives. The bill creates financial benefits for nonfarming farmer relatives, including nieces, nephews, and first cousins. The “Field of Dreams” premise is “if you pay them, they’ll pitch in.” Not surprisingly, one commentator has alleged the 2018 Farm Bill has a “creeping socialism” trend.21

    Hemp Is Legal Again. Hemp historically was grown for rope and canvas,22 but it can be cultivated for myriad uses. Hemp is generally cultivatable for fiber, grain, and oil yields. The amount of possible products that can be created out of hemp is astounding. (See “The Many Uses of Hemp.”)

    But hemp came under suppressive governmental regulation in the 20th century, under the Marihuana Tax Act of 1937, which required tax stamps for sales and criminal penalties for violations of the Act.23 Hemp use was further restricted under the 1970 Controlled Substances Act when it was classified as a Schedule 1 drug, with criminal penalties if that Act was violated.24

    The 2014 Farm Bill was the first step in reviving hemp farming, partially legalizing it for hemp research and pilot grow projects with registration through the Drug Enforcement Administration (DEA) or state department of agriculture regulatory programs. Each state could adopt the federal law or create its own for its agricultural department to administer. It was not long before the Wisconsin Legislature made its choice.

    In 2017 the Wisconsin Legislature unanimously passed 2017 Wis. Act 100. That Act enabled hemp farming commerce “to the greatest extent under federal law” but subject to Wisconsin Department of Agriculture, Trade and Commerce Protection (DATCP)-promulgated rules. Those rules include background checks, registration and licensing, scrupulous record keeping, crop testing, annual reporting, and enforcement.25 In characterizing the impact of 2017 Wis. Act 100, the U.W. Extension stated, “it’s a new and dynamic area for both Wisconsin farmers and the legal system.”26 But as 2018 dawned, hemp farming was still at a distinct business disadvantage; it was not considered a regular agricultural crop eligible for financing and insurance. The 2018 Farm Bill would soon change that.

    The Hemp Farming Act of 2018,27 which was a congressional House bill, eventually was incorporated into the final 2018 Farm Bill. Those provisions legalized hemp as a regular agriculture “crop.” The 2018 Farm Bill also amended the Controlled Substances Act to make hemp farming legal under certain conditions.28 Hemp was now eligible for federal grants, research funds, bank credit, and crop insurance, all staples of farm viability.29 With such resources now available, the bill provides a huge boost to hemp farmers financially. But further regulatory rulemaking will be needed in the future for clarity.30

    The “gateway” restriction for saleable hemp is that it cannot contain more than 0.3 percent of tetrahydrocannibinols (THC), the psychoactive substance that gives a person a marijuana high. Content is critical. The DATCP warns growers to use only certified non-THC hemp seed31or risk mandatory crop destruction as well as enforcement prosecution.

    Clearly, hemp farming remains subject to stringent regulation. There are felony penalties for violations.32 These will bring new work for criminal law attorneys.

    One final note: Wisconsin’s law does not allow anyone with a felony drug conviction to grow hemp.33

    CBD Products May Now Be Legal. CBD oil is a popular ingredient for medical and edible products and global beverage markets.34 CBD is a nonintoxicating compound found in cannabis. It generally remains an illegal drug – a Schedule I controlled substance – under federal law. The 2018 Farm Bill cracked open the CBD products legalization door, but with limiting exceptions, to prevent illegal THC grows. Any cannabinoid (compounds found in the cannabis plant) will be legal if it is produced consistent with current Farm Bill provisions or associated state regulations like Wisconsin’s DATCP program, or if it is a pharmaceutical-grade CBD product approved by the Food and Drug Administration (FDA). There is only one FDA-approved cannabis extract CBD medical product thus far: GW Pharmaceutical’s Epidolex,35 which contains more than minimal THC and is for severe epilepsy.36

    The FDA currently prohibits CBD generally in food sold in interstate commerce.37 But in a May 10, 2018, news release Wisconsin’s then-Attorney General Brad Schimel announced that retailers could sell non-food CBD produced products created per DATCP requirements, in state.38 (In comparison, non-THC and non-food CBD from hemp – hulled hemp seeds, hemp seed protein, and hemp seed oil –can be sold in food between states as long as the packaging does not make disease-prevention claims.)39 CBD is anecdotally promising for pain and mood relief but the research is nascent. Whether CBD oil is more about help, or just hype, is debatable.40 CBD entrepreneurs call the Farm Bill’s CBD legalization “a game changer.”41 The Milwaukee Journal Sentinel referred to it as the “CBD Gold Rush.”42 Wisconsin is well poised for both hemp and future CBD food and beverage opportunities and the intellectual property counsel work that will branch off from them, such as CBD product trademark applications.43

    Conservation and Rural Technology Are Moved Forward. Conservationists are excited about funding for USDA database centralization. $25 million was also allotted for on-farm conservation innovation trials. These experiments should help farmers better weather droughts, floods, fires, and freezes.44 Rural high-speed internet received a funding increase, from $25 million to $350 million per year.45

    Urban Farming Growing. The bill also seeds urban agriculture. Provisions for community gardens, local farmers’ markets, rooftop, hydroponic, aquaponic, and indoor farms, along with organic research, received increased funding.46 In Wisconsin, the DATCP administers hemp grows for chemical content, registration and licensing compliance, evidence of sales, and site approval (with homes usually being disapproved).47 The DATCP has reportedly been surprised in the first year by the number of applicants for urban greenhouse sites48 and their age spread: from teenagers to retirees. These new “grow” sites will no doubt create municipal ordinance and zoning questions, which will require attorneys to resolve them.

    Conclusion

    The 2018 Farm Bill promises green not only for farmers but also for lawyers. It plows through conventional thinking to improve farming in cutting-edge ways. The bill’s reforms, technology investments, and rural-to-urban diversification provisions will stir up new business for strapped farmers and “grow” entrepreneurs.

    Though the bill advances traditional farming, its bell cow is its cannabis legalization. Hemp, CBD, and their derivative multifaceted products are ripe for market. It is a new day for Wisconsin farmers. The bill is not just for people in blue jeans; it is an almanac for change. Lawyers should keep abreast of this law.

    Learn More About Hemp & CBD Oil

    Join the faculty of “Hemp & CBD Oil in Wisconsin: The New Green Gold” as they plow through legal questions about hemp and CBD oil. At this State Bar of Wisconsin seminar, you will gain a thorough understanding of what is and isn’t legal, and learn how your clients can get started in the industry.

    What: “Hemp & CBD Oil in Wisconsin: The New Green Gold”
    When: Live seminar and live webcast, Wednesday, June 19, 2019; webcast replays through July
    Where: State Bar Center, Madison
    Credits: 4.5 CLE credits

    Register now

    Meet Our Contributors

    Where or when do you get your best ideas?

    Thomas J. McClureAs a trial attorney I am always seeking better approaches to problem solving and communicating. I daily read historical books and current articles on societal controversies (from multi-viewpoint sources such as RealClearPolitics.com, featuring two opposing articles on the same topic).

    I want to improve my abilities to objectively analyze problems, create solutions, and communicate positively. My best ideas, when they infrequently occur, come mainly from these activities (though a great movie now and then can also spark one).

    com tmcclure2 yahoo Thomas J. McClure, McClure Law Offices, Delafield.

    Become a contributor! Are you working on an interesting case? Have a practice tip to share? There are several ways to contribute to Wisconsin Lawyer. To discuss a topic idea, contact Managing Editor Karlé Lester at (800) 444-9404, ext. 6127, or email org klester wisbar wisbar klester org. Check out our writing and submission guidelines.

    Endnotes

    1 Patrick Leary, Mitchell Park Domes Considers Growing Hemp As Revenue Source, Milwaukee Bus. J. (Dec. 21, 2018).

    2 Pub. L. No. 73-10.

    3 How Does The Farm Bill Affect Everyday Americans? Union Of Concerned Scientists: Ask A Scientist (March 2018).

    4 Tracy C. Miller, The Farm Bill: Discretionary Spending We Can Do Without, The Fiscal Times (Jan. 4, 2019).

    5 The Wisconsin state program is known as FoodShare Wisconsin. Beneficiaries use electronic benefit cards for food purchases rather than the former food stamp paper-coupon program.

    6 Id.

    7 How The Farm Bill Affects You, Washington’s Grains 2012.

    8 Top Ten Worst Provisions In The Farm Bill, Taxpayers For Common Sense (Dec. 11, 2018).

    9 Miller, supra note 4.

    10 Gracy Olmstead, The Farm Bill Ignores the Real Troubles of U.S. Agriculture, N.Y. Times (Dec. 14, 2018).

    11 Id.          

    12 Ryan Alexander, The Farm Bill and Federal Food Stamp Program Romance Is Dead. Time For a Clean Divorce, USA Today (Oct. 14, 2018).

    13 Jeff Stein, Massive $867 Billion Farm Bill Has Subsidies For Farmers’ Relatives, Lacks Food Stamp Cuts. It Also Legalizes Hemp, Washington Post (Dec. 11, 2018).

    14 Caitlin Dewey, 6 Things To Watch For In The Farm Bill, Washington Post (May 18, 2018).

    15 Racial Equity In The Farm Bill: Recommendations and Opportunities, National Sustainable Agriculture Coalition Blog (Jan. 31, 2018).

    16 Dan Gundersen, Native Americans Tribes Win Big In the New Farm Bill, MPR News (Dec. 26, 2018).

    17 Kelsey Piper, Dog and Cat Meat Are Now, Finally, Illegal, Vox (Dec. 20, 2018).

    18 Statement of U.S. Secretary of Agriculture Sonny Perdue On President Trump’s Signing Of The Farm Bill, Dec. 20, 2018.

    19 Carol Spaeth-Bauer, 10 Highlights From the 2018 Farm Bill, Wisconsin State Farmer (April 12, 2018).

    20 Braakton Booker & Grant Gerlock, Farm Bill Compromise Reached With SNAP Changes Out, Industrial Hemp In, NPR (Dec. 11, 2018).

    21 Subsidies For All! – The Farm Bill’s Creeping Socialism, Investors Business Daily (Dec. 13, 2108).

    22 Jordan Waldrep, How Cannabis Just Took A Step Towards Legalization In the U.S. Farm Bill, Forbes (Jan. 3, 2019).

    23 Pub. L. No. 75-238.

    24 Pub. L. No. 91-513.

    25 David A. Crass & Taylor T. Fritsch, Wisconsin DATCP Poised To Release Industrial Hemp Rules, Michael Best Client Alert (Feb. 21, 2018).

    26 Hemp First Steps Planned, Agri-View UW Extension Cooperative (Dec.29, 2017).

    27 H.R. 5485 (2017-2018).

    28 Sec. 12619 CONFORMING CHANGES TO THE CONTROLLED SUBSTANCES ACT.

    29 Sec. 10113 HEMP PRODUCTION amending The Agricultural Marketing Act of 1946 § 297B STATE AND TRIBAL.

    30 Ryan McCrimmon, Washington Has Work To Do On CBD, Hemp, Politico (Feb. 27, 2019).

    31 Wisconsin DATCP Poised To Release Industrial Hemp Rules, supra note 25.

    32 Sec. 10113 HEMP PRODUCTION amending The Agricultural Marketing Act of 1946 § 297B STATE AND TRIBAL.

    33 Bill Novak, Growers Hopping On the Hemp Farm Wagon, Applications Up 600 Percent, Madison Wis. Bus. News (March 4, 2019).

    34 CBD Beverage Market and the 2018 Farm Bill Speculation: American Premium Water Corporation, Kona Gold Solutions, New Age Beverage Corporation, Canopy Growth Corporation, Investor Ideas.com (Nov. 27, 2018).

    35 John Hudak, The Farm Bill, Hemp Legalization and the Status of CBD: An Explainer, Brookings (Dec. 14, 2018).

    36 FDA Approves First Drug Comprised of an Active Ingredient Derived From Marijuana To Treat Rare, Severe Forms of Epilepsy, FDA News Release (June 25, 2018).

    37 FDA Statement from FDA Commissioner Scott Gottlieb M.D. Dec. 20, 2018.

    38 Zachary P. Bemis, Wisconsin Industrial Hemp, the 2018 Farm Bill, and CBD, Godfrey & Kahn Regulatory Update (Feb. 2019).

    39 FDA Statement, supra note 37.

    40 Mikaela Conley, CBD Oil: Miracle Cure Or Junk Science?, Yahoo News 360 (Feb. 23, 2019).

    41 Chris Chafin, CBD Poised For Boom After Farm Bill, Rolling Stone (Dec. 19, 2018).

    42 Rick Romell, CBD ‘Gold Rush’ Could Mean Big Business For Wisconsin’s Hemp Industry, Milwaukee Journal Sentinel (Nov. 12, 2018).

    43 Christopher Shattuck, What’s Hot, What’s Not Wisconsin Practice Trends 2019, Wisconsin Lawyer (Feb. 2019).

    44 David Festa, The 2018 Farm Bill Breaks New Ground For Conservation and Resilience, Environmental Defense Fund (Dec. 21, 2018).

    45 Maea Leniei Buhre & Patty Gorena Morales, Hemp, High Speed Internet and Other Highlights From the New Farm Bill, PBS News Hour (Dec. 13, 2018).

    46 Id.

    47 Wisconsin Industrial Hemp Pilot Research Program FAQ’s, DATCP, Updated Oct. 23, 2018, pp. 1-9.

    48 Marisa Wojcik, Fast Facts: Hemp In Wisconsin, Wisconsin Public Radio (Dec. 27, 2018).




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