Walnut Rise

Growin' it in the ground

Impeach Secretary Zinke

Our Secretary of the Interior, Ryan Zinke, should be fired, impeached or otherwise removed from office. Why? The list is long:

Disregard for science and scientists

Opening up territorial continental shelf to off-shore oil drilling

Reducing size of national refuges

Increasing price of admission to national parks

Putting interests of oil and gas companies above public on federal lands

Not speaking up about climate change to President

 

Secretary Zinke, you are not a conservationist in the mold of Teddy Roosevelt. Leave your position before you become the next Ann Gorsuch (Justice Neil Gorsuch’s mother, who was forced out as Interior Secretary by President Ronald Reagan)!

Capital Press editorial on new tax law

The Capital Press published an editorial this week endorsing the new federal tax bill. I agree with the editorial board that some items in the tax bill do seem to help lower taxes on certain farm businesses.

However, the editorial board has a perspective that includes promoting the largest, most debt-burdened, most soil-intensive agricultural enterprises at the expense of smaller farms, rural communities and taxpayers in general.

Take the section 179 depreciation/expensing change. Most farms use lines of credit or dealership-based loans to “purchase” new pieces of equipment, so they will not be using the depreciation schedule anyway; they would be using the interest on debt deduction on the schedule F. Those that can afford to drop $1 million on a new tractor with cash are very large enterprises that really stretch the everyday definition of farms. For a smaller farm, the depreciation/expensing schedule acts as a tax “bank account,” since we get to take a percentage of the deduction every year for ten or more years. The tax laws seem to promote the carrying of large, never-paid-off debt, which I would argue is unhealthy for farm businesses and rural communities.

The estate tax point the board makes is based on the idea that these very large farms (I can think of a handful in Yamhill County who would meet this criteria) are already taxed on all these assets that they have accumulated through hard work. This misses the point that most farm businesses in Oregon primarily carry land as their largest asset; as you know, land increases in value over time, but if it is not sold, the value simply accrues without any capital gains or income tax applied to it. If 1000 acres are purchased in 1950 at $100/acre (a pretty standard number then), as the land value increases, very little is paid in property taxes (and until now, that was deductible on federal returns) due to our land use laws. But, essentially, upon death of the owner (but most big farms are not sole proprietors, but rather family trusts or privately held corporations), the land is transferred to a new generation or sold (most farmers are shrewd and know that giving heirs land is not a helpful thing). The land is then shown at its true market value of $2500/acre, for a gain of $2400/acre or a total taxable increase of $2.4 million. This is income that I believe our county taxpayers should be receiving, but is now saved by the small number of large landowners. Image how much more a retired school teacher or mechanic has to pay, to cover the farm family’s savings.

The editorial board does not mention a big tax hit that will affect farm businesses in Oregon: the large reduction in the deduction for state and local taxes. We pay about $8000 in state taxes, plus $3000-ish in property taxes, and we only own 48 acres. For a big farm (owning over 1000 acres and grossing over $1 million), the property taxes alone are well above the $10,000 cap on all SALT taxes that are deductible. As all tax laws are aimed at influencing behavior, this change will likely influence farms in one way: they will increase their rented acreage while divesting of more owned lands, a trend we’ve been seeing for years. What they get with renting is that all expenses are totally deductible, thus decreasing their adjusted gross income. I can think of many negatives for our county in having more land rented than farmer-owned, but I’ll save those thoughts for a different note.

I could continue refuting the editorial point by point, but I simply wanted to observe that the editorial board is essentially endorsing an agriculture that is bigger and more debt-financed at the expense of local communities and poorer taxpayers. And we haven’t even delved into the labor and immigration issues!

 

Casey

Over-production: the real US farm problem

Politicians love to tell us the problems facing farms in America. It’s land-use laws. Or it is over-regulation. Or it is unfair trade practices. Or it is animal-rights activists. Or it is the coastal, urban elites. Or the aging farmer population.

You know what it really is? We farmers are too successful at growing the stuff we grow.

Take an example from Oregon: last year, we had a great year of growing legal weed, with newly-licensed stores buying from newly-licensed growers. Good prices, plenty of product. This year, wholesale or farm-gate prices plummeted; I haven’t heard the stats, but I’m guessing many producers will leave the market, unable to make an adequate income or pay back investors. Why? Too much product; the farmers who last year produced maybe 150 lbs of weed learned the issues of scaling-up and yielded 1500 to 3000 pounds of weed. Way-over-saturation of the market!

In Iowa, corn producers demand a federal subsidy for ethanol production, and soybean producers call for plastics and other synthetic, soy-based materials production funded by the feds. Why? They are way too good at growing their crops, and existing markets can only respond to over-yielding by plummeting prices. Free-trade agreements are a prime example of over-production: we grow way more product than we can possibly eat, so we need to export to other countries, preferably at an advantage to us.

You could ask: but, we all need to eat, right? We shouldn’t and couldn’t grow less, could we? First, dairy producers already do this…dairy associations purchase herds and slaughter them, to keep milk production down. And so much of what the US grows is not actually food, anyway.

 

New York Times article on farmers and regulation

Today’s New York Times included an article by Steve Eder (“One Apple Orchard and 5,000 Government Rules”), with a lot of help from the libertarian think tank Mercatus Center, on the burden of regulation for US farmers. The article is a fundamentally flawed inquiry into farming, entrepreneurship and the regulatory environment. But, after reading the deeply-biased and thesis-based NYT article about our cannabis farmer neighbors, the Wagners, I sense a pattern at the Times, which is that the reporters and editors have an obvious “angle,” and use the farmer interviewed or featured as their foil; they come to the issue with a thesis, a perspective, and a desire to tell their story, not the farmer’s.

In this case, I find several points problematic, and the foundation of the article flawed. The farmer interviewed, Peter Ten Eyck, is presented as an apple orchardist. In reality, Ten Eyck is an entrepreneur with businesses producing apple cider and applesauce, running a cafe, operating a U-pick apple orchard, and is marketing apples through the largest supermarket chains in the US. He is also using the H2A visa program to hire guest workers from Jamaica. He farms 300 acres. If he is making anywhere near the direct market average per acre, he is taking in at least three million dollars in gross revenue. This is awesome. Great diversification and risk management! Let us cheer his willingness to take risks.

But, let us also acknowledge that Ten Eyck has chosen to take on many different industries and products, with multiple ways of selling, hiring, producing. He has voluntarily taken up the challenges of each of this separate industries. Again, he is a champion. I would not want to take on, start up and run all these different businesses. But, he knows that these industries all have their regulations, and still he has sought success in all of them.

Eder, the author, interviews a libertarian expert who claims that many of the rules and regulations are redundant or just plain silly. His solution: get rid of regulations. Really? Each of the regulations that exist are on the books for a reason, usually either to promote public or worker safety, or to promote economic fairness and transparency, or some other public good. Occasionally, the health of the environment is the goal. Often, the rule exists because of many specific examples of problems that need to be solved. Yes, it does cost more to follow the rules. Yes, it is more costly (not always) for smaller farms or businesses than larger farms, per dollar of revenue. But, the rules still exist to promote public goods, right? So, rather than eliminate the rule, can we cut the expense of following the rules for smaller businesses? In certified organic agriculture, the USDA runs the Cost-share Reimbursement Program, which reimburses farmers for up to $750 of their annual organic certification costs (our farm spends, initially, $1400 per year on certification). Document your costs and get partial reimbursement? Why not propose this, rather than attacking regulations and regulators?

A whole section addresses the ladders used in picking, and the regulations regarding ladders. I have a simple solution: stop using ladders. In Oregon, farm workers refuse to use ladders; they will not pick cherries, for example, if the trees require laddering. They know that using ladders is dangerous (and they cannot afford to get injured), and slow. Getting paid by the pound and using ladders is a great way to make a lot less money. What about the trees? What happens to the upper fruit? My solution: take the top right off with your chain saw; if I cannot reach the branches in our orchard, I simply lop off that branch in the winter pruning (which I will start next week). The reality: there are many solutions that do not require ladders; the hardest thing is simply realizing that you don’t need them. And if your employees come from your community, it might be easier for them to assert themselves with respect to such problems. Also, ladders and civilian/inexperienced U-pickers are a volatile mix. Indian Ladder Farm probably pays a lot for their liability insurance, to cover visitor pickers. I know that our farm insurance premiums would be 50% higher if we wanted our agent to cover visitors on ladders paying money for our products; hold-harmless forms only go so far, when insurance claims are involved. Ditch the ladders.

With a deep respect for and understanding of the challenges farmers face, it is not my intention to pick on Ten Eyck. It is the journalist, Eder, and the libertarian lawyer Baylen Linnekin whose arguments do not pass the sniff test, straight-face test or whatever. Take the graphic included in the article regarding EPA rules to regulate pesticide applicators: the author presents this 10,400 words as a problem. Too many words, too complicated, too many definitions, says and implies the author. But, this is the EPA laying out rules for applying pesticides on food-production farms. Pesticides are poisons, right? Most states have programs that an applicator-farmer attends to get certified; one class and you get the highlights that your state feels are the take-home lessons. But, let’s remember that farm operators are usually not the poison-applicators; the generally-white, generally-male, generally-educated farmer tasks a generally-not-white, less-educated with the daily or regular task of actually handling the poison and applying it. Exposure is the reality for the worker (chronic and acute).

Linnekin’s contributions are no less biased and misleading. He says, “So many of the farmers I’ve spoken with tell me that stricter and stricter regulations have put many of their neighbors and friends out of business, and in doing so cost them their homes, land and livelihoods…For many farmers, rolling back regulations is the only way they can survive.” Horse-shit. First, how many farmers does this libertarian-lawyer talk with? And they are telling him about their neighbors! This is one of the classic ways to ascribe your solution to the targeted population; “my sources tell me their sources tell them X.” Oh, we should definitely listen to these unnamed experts you cite, right? And how many of these “farmers” share Linnekin’s initial political-economic perspective? All of them, no doubt.

You know what farmers do get, besides all of these regulations? Subsidies. Our farm, which does not qualify for conservation or crop-price subsidies or crop insurance, receives subsidies on our vehicle registration, our property taxes, our organic certification costs, even our fuel (we don’t pay the fuel tax). While farmers can acquire permission to appropriate state waters (that is, we get to use public water to irrigate), we do not pay anything for the water. We can pump and spread water up to the maximum we’re allowed without paying a penny for the water itself. Seriously.

In Oregon, a high-tax and high-regulation state, a direct-market farmer can rent a piece of land, work it up, plant a crop, harvest and sell it without any permission, certifications, permits. Nothing. No regulations affect this farmer. Crazy, huh? You would never know this is possible, if you took the author of this piece at face-value. And the Food Safety Modernization Act? It does not apply to farms grossing less than $250,000 annually, so this start-up farmer would be exempt.

Growin’ it in the ground!

 

 

Christie v. National Collegiate Athletic Association

Christie v. NCAA is currently being considered at the Supreme Court. New Jersey repealed the state prohibition on sports gambling, which PASPA, the Professional and Amateur Sports Protection Act, forbids. New Jersey, and its lame-duck governor Chris Christie, argue that federal prohibition of repealing bans on sports gambling amounts to commandeering, in which states are forced to do the work of the federal government, and infringes on state sovereignty.
From Christie v. NCAA petition for writ of certiorari: “If Congress can freeze in place existing state laws by prohibiting contrary state-law “authorizations,” then the federal government can effectively force States to enact federal policies and thus will have greatly aggrandized its own power while foisting accountability for those policies entirely onto the States. Future efforts by States to legalize private conduct currently prohibited by state law—anything from recreational use of marijuana, to carrying concealed firearms, to working on Sundays—can be thwarted not just by a direct federally enforced prohibition of that conduct, but now also by a federal ban on state legislation that “authorizes” such conduct (emphasis mine). This is not a minor intrusion on state sovereignty. It is a sea change to our system of federalism. This Court should grant the petition to protect the Constitution’s carefully calibrated federal-state design and restore the balance between state and federal power that the Third Circuit’s decision has so thoroughly upended.”
Why is this important to weed growers? The federal government is requiring states to do its work, and Chris Christie may succeed in forcing the feds out of his state’s business. Just like sanctuary laws, where the feds want states to do their immigration enforcement work, and the “Justice” department has threatened to cut funding from states that do not comply. Weed businesses and users should watch this case carefully; it seems likely to win, as this is a conservative court and a conservative issue. If Christie does win, we need to immediately present our own case, from Oregon. We can argue that we have repealed laws regarding marijuana, and that therefore the feds should recognize that (rather than just say that they won’t prosecute us, for now).
Growin’ it in the ground!
Casey

Books, a backlog of reviews.

 

When we flew back from Arizona recently, I was out of titles, having finished off a biography of David Douglas and “Democracy” by Condoleeza Rice. So, I searched the magazine kiosk at Sky Harbor Airport, not really thinking I would find anything interesting (I’m not really into Sports Illustrated or Car and Driver). And behold, I discovered “Foreign Affairs” magazine, published by the Council on Foreign Relations! The most recent issue was focused on “America’s forgotten wars” in honor of Veteran’s Day. Articles were authored by folks like Stanley McCrystal, the former commander of forces in Iraq. The editor of Lawfare, a blog on national security law, also authored an article. What a trove of valuable writing by experienced diplomats and warriors!

After finishing Foreign Affairs, I got sucked into “Upstream” by Langdon Cook. Cook writes, these days, about wild food in the Northwest, and this is his most recent entry in the category. Wild salmon are lovingly written about, fished for, and eaten by friends and family in this beautiful book. As a person whose soul yearns for Celilo Falls, I cried reading his description of the First Food ceremony at Celilo Village and the flooding of the Falls. Oh, and his book includes artwork by Frank Boyden, whose wife was my high school math teacher!

At the recommendation of Jodie Hansen and Abraham Hanson, I then dove into Unfair by Drexel Law professor Adam Benforado. Awesome. Uplifting. Hopeful. Damning. Benforado lays out the inequality and unfairness in our criminal justice system, explaining that the US has set up a system designed to promote equality before the law, but that the biases that we do not even know exist keep this system completing hobbled. He shares countless studies that show bias and unfair practices in each step of the criminal in-justice system, and he provides remedies. So great. So timely. So necessary. Next up in this category is Blindspot: hidden biases of good people, by Mahzarin Banaji.

I am currently reading On the Road to Kandahar by Jason Burke, who takes on conflicts in Islamic countries, and tries to provide a broad spectrum of Islamic societies and peoples and practices, all while dodging bullets and IEDs.

Back at Green Ridge Apothecary in Mac!

Heather at Green Ridge Apothecary just took delivery of our Jesus OG and Pennywise, so friends can find our product in town, now! The Jesus OG is 24% (a knock-down potent bud), and Pennywise is 8.5% THC, 8.5% CBD for a good evening wind-down and sleep and pain-aid.

Hooray for local weed!

Riverbend and persistence

For the past eleven years, Waste Management Inc, a Texas-based garbage company, has been trying to expand their dump, Riverbend, just outside of McMinnville. And for the past eleven years, Ramsey McPhillips and the Stop the Dump Coalition have been working to stop the expansion. Through all those years, our local land-use decision-makers (Yamhill County Planning Department) have consistently given Waste Management the go-ahead to expand.

The courts of review, including the Land Use Board of Appeals and the Court of Appeals, have gone back and forth in remanding, reversing and sometimes upholding county decisions. The stop-dumpers are incredibly persistent, fighting year after year to stop the expansion. In the court of public opinion, Ramsey and his partners have won; in Yamhill County, sentiment has shifted completely. Ten years ago, people thought it unfair to oppose such nice people who just wanted to keep their landfill going, for the good of our community. Now, the county and the city of McMinnville are strongly considering moving their garbage to Washington or the Columbia River Gorge’s Arlington dump, and people are tired of the ugly, stinky eye-sore mound of garbage in their beautiful valley, beside their beautiful river.

And now, after agreeing to review the conflict, this morning, the Oregon Supreme Court heard oral arguments. I attended, and sat between the Capital Press’ Mateusz Perkowski (who wrote the article in May about our cannabis farm) and the News-Register’s Nicole Montesano (former veggie customer). Across the chamber sat most of Yamhill County’s planning staff (in front of them sat Todd Sadlo, the former attorney for Baker Rock and now the assistant county counsel), and beyond them were Ilsa Perse, Sid Friedman, Ramsey McPhillips, Susan Meredith, Lilian Frease, and Susan Watkins. I have known all of them at least ten years; most of them we met in 2006, the year we moved to Yamhill County and started the veggie farm.

At issue is the application to expand the dump onto exclusive farm use zoned land. Since depositing and storing solid waste is considered a non-farm use, just like a quarry or a house, land use laws say that the proposed use cannot significantly affect existing farming practices and cannot significantly increase the cost of those practices on the surrounding parcels. Waste Management (and the county) decided that they could mitigate the problems by forcing conditions of approval on the neighboring farms. If they pick up the trash before Ramsey cuts hay, or purchase all of Lilian Frease’s berries at retail prices, then the problem goes away, right? Today, the justices get to decide if the law allows for forced mitigation of a problem, or whether these mitigation measures actually constitute a significant change in farming practices and in the costs of farming.

Justices Landau, Walters and Balmer were especially active in questioning the attorneys. When they issue their opinion, it has the potential to completely change how planners decide non-farm use applications in farm-zoned areas. With 27 officially-acknowledged non-farm activities that can be allowed, with permission, on EFU land (exclusive farm use), returning to a standard where the applicant must defend their request, rather than forcing farmers to provide evidence of possible harm, will completely shift the decision-making process. It will be harder to justify non-farm use of EFU land, and applicants will have to mitigate on their land, rather than forcing farmers to show damage and accept outside mitigation on them.

Stay tuned!

Pennywise and TrainWreck potency

Green Leaf sent the latest round of potency results yesterday! Pennywise is testing at 8.5% THC, 8.5% CBD, while TrainWreck is 18.7% THC. Not too bad, though the numbers could certainly be higher.

I am bucking the final round of Pennywise, as it is more modest than the TrainWreck, Lucy’s Lion or Jesus OG harvests. The buds smell great, nice and dense, and have many orange trichomes. Very mature.

In a sign of the maturation of this industry, I received a civil subpoena yesterday, demanding email and METRC records related to another producer who is in the middle of a lawsuit. This is a positive development: imagine how ludicrous it would have been for a lawsuit back in the prohibition days!

Oh, and I am starting law school next August at Willamette! The college has a part-time program, which will allow me to continue farming while in school.

Speak out and act up against sexual harassment in the State Capitol

My email:

Senator Boquist,

Please speak out in condemning sexual harassment in the State Capitol. I expect to hear a response from your office.

Thank you, Casey Kulla, farmer, Dayton

 

Their reply:

Dear Casey Kulla:

Thank you for your note. Our office works hard to address issues of harassment, to include all forms of abuse.

Again, thank you for your email.

Peggy Boquist
Legislative Assistant to
State Senator Brian Boquist
Oregon Senate District 12

The email correspondence above says so much in such little space. Like, what’s minimum effort needed to answer a constituent’s request? Or, how can I not say anything but still reply? In Oregon’s State Capitol, sexual harassment complaints have revealed a culture and atmosphere of “don’t tell” and “look away.” It is shameful to have our elected representatives not speaking out and decrying the harassment that appears to be prevalent in the Capitol.

Governor Kate Brown and Speaker of the House Tina Kotek have spoken out and proposed solutions. But the silence of men in elected positions leaves them complicit in the abuses (I’m talking to you, Senator Boquist). Years of abuse need to stop, and an institutional fix needs to be implemented, including a process for preventing situations that promote abuse and for reporting incidents.

 

Casey

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