Friday, May 21, 2010

Minnesota Farms Fight Protectionist Nitwitery

According to the Institute for Justice (a national public interest law firm that has filed a federal lawsuit in U.S. District Court challenging Lake Elmo’s trade ban as a violation of fundamental constitutional rights): "Lake Elmo, Minn., forbids farmers from selling agricultural products from their own land unless the products are grown within the city limits. If a Lake Elmo farmer grows some of his crops in another town or another state, he cannot sell them from his Lake Elmo farm. Products grown in town are allowed; products from elsewhere are not."

Why stop there? Why not apply this same trade ban to grocery stores, gas stations, restaurants, car dealers, clothing stores, and movie theaters in Lake Elmo?  That is, if self-sufficiency for agricultural products is good for Lake Elmo, wouldn't self-sufficiency for all products be even better? 

And if self-sufficiency for the entire community is good, wouldn't self-sufficiency for neighborhoods within Lake Elmo be even better?  Why should residents of the west side of Lake Elmo patronize businesses, restaurants and farms on the east side of Lake Elmo by buying their agricultural products, food and other items - doesn't that take away jobs from the west side and export them to the east side of the city? 

But then why not self-sufficiency at the household level, wouldn't that be even better?  Why should you export your family's jobs to your neighbors across the street by buying their tomatoes?  Why buy any "out-of-household" goods or services - doesn't that just  take away jobs from your own household? 

This kind of protectionist self-sufficiency at the city level simply doesn't make any economic sense - it will impoverish the Lake Elmo residents, not make them better off, just like self-sufficiency doesn't make sense at the national level, household level, or any level.  
HT: Veronique de Rugy


At 5/21/2010 3:32 PM, Anonymous DrTorch said...

WTF? This is incredibly stupid.
Are there really farms in Lake Elmo that grow everything that local consumers want?

How can they possibly grow citrus fruit in Minn?

And flowers?

Answer is, no way.

Seems like some local pumpkin and/or Christmass tree farmers got tired of competition so they set up this stupid law...likely directed at one successful business.


At 5/21/2010 4:02 PM, Anonymous gettingrational said...

This is probably a local family feud situation that got taken to several next levels. There can't be but a couple of farms within the city limits of St. Elmo. If it comes down to only pumpkins then I suggest every resident of the city grow their own just like myself.

At 5/21/2010 4:07 PM, Anonymous Anonymous said...

while it looks weird can see where this might have come maybe the hardware store down the street that sells xmas trees or the grocery store that sells pumpkins...both those businesses pay commercial property taxes to the town while this "farm" probably does not. Pushed to the limit somebody could grow a few potatoes out back to qualify as a "farm" and haul in produce by the semi-trailer loads to sell just like the grocery store down the street that has to pay commercial property taxes and be subject to a whole lot of other regulations/ordinances that the "farm" does not. Tough call.

At 5/21/2010 4:53 PM, Blogger sethstorm said...

Sounds like an out-of-hand agricultural issue more than anything.

At 5/21/2010 6:33 PM, Blogger Ron H. said...

>"Sounds like an out-of-hand agricultural issue more than anything."

No, sethstorm, this is a serious unemployment problem, that you should be very interested in. By buying produce from out of town growers, these farmers are outsourcing jobs to third world...I mean other towns, and even other states, thereby causing serious unemployment amongst local townspeople.

You should consider this protectionist law a good one. This is exactly what you are recommending when you say "Make it impossible to hire other than citizens."

At 5/21/2010 7:06 PM, Blogger Craig Howard said...

This is the only logical outcome of the buy-local movement. Next up -- can't eat anything that wasn't grown in your front yard.

At 5/21/2010 7:23 PM, Blogger Ron H. said...

>"This is the only logical outcome of the buy-local movement. Next up -- can't eat anything that wasn't grown in your front yard.

This is good news for those living in condos, as they will at last reach their target weight.

At 5/21/2010 8:37 PM, Blogger juandos said...

How do so many clueless moonbats get elected to local offices in Minnesota?

Is there something in the water up there?

At 5/21/2010 10:07 PM, Blogger Marko said...

This is a pretty clear violation of the negative commerce clause. State or local governments cannot burden interstate commerce. Period. I legislated a few cases like this (but involving taxi and town car legislation) and they are a pretty easy case for the plaintiff to make once it is explained clearly. I haven't read the ordinance, but from what is said here it is probably unconstitutional.

At 5/22/2010 7:44 AM, Blogger bob wright said...

As the old Texan I know once said, "This is stupidity gone to seed."

At 5/22/2010 2:17 PM, Anonymous Anonymous said...

It is not just Minnesota. This "Save the Farms" mentality is going to save us to death.

In King County (Washington?) 85% of your property is required to be left in natural vegetation, and a similar rule applies in New South Wales, Australia. Try running YOUR business using only 15% of its assets.

I have a hay farm, but I can't give hay rides on weekends because that is considered "commercial". Other activites such as corn mazes, horse shows, etc. also have severe permitting restrictions.

One farm in the area has set itself up as an educational facility, with school visits and other activities, but it took them four years to get through the permitting process.

Wineries in some places are prohibited or limited from having events like wine tastings or weddings.

In order to have a (group) Farmers Market in my county you are required to have over 100 acres, live on the land, be located on a main raod, and provide county approved restrooms. There is only one such facility in the county, and these rules pretty much guarantee that (politically connected) family a monopoly.

A simple farm stand to sell only your own products is possible under easier rules, but a multifarmer market is required to sell only producs grown in this county. Naturally the larger venues draw bigger crowds.

Inspection rules make it difficult to sell beef chicken, milk or cheese outside the commercial venues. In New York small farmers got together and intervened to prevent a rule that would have prevented them from selling ungraded lumber, milled on their own farms. (A farm sawmill is mostly illegal in my county, an effort to "Save our Trees".)

Our area is hilly and cool but only a short distance south you are in a different microclimate where strawberries and other produce are availaable three weeks earlier. Farmers that specialize in selling through farmers markets will lease land down there to extend their season, but those goods cannot be sold in this county.

At 5/22/2010 2:18 PM, Anonymous Anonymous said...

Conservation easements are advertised as a way to save the farms. A conservation easement allows you to sell or give away your building rights and get cash or a big tax credit for the "gift".

In some areas the county buys development rights (currently for $20,000 in one area I know of). Having bought those rights the county then extinguishes them by giving them to a conservation society. Ordinarily, surplus county property is required to be auctioned off, but in this case county property (development rights paid for with taxpayer dollars) are simply given away.

The county claims to make money on this because by their accounting they lose $2700 a year in costs for services over and above whatthe average home pays in taxes. By eliminating homes, they save money.

They claim this is good for the farmer because he can use the (one time) payment to buy machinery or make other farm improvements. How this one-time bump in cash flow is supposed to help farmers with marginal to negative cash flow over the long run is besides me.

Once your property has a conservation easement, its land use status changes permanently, so yoy get the lower "land use" tax rate that farmers also get. Except, farmers have to actuallly produce and sell something to get the lower rate: if you have a conservation easement youcan stop farming and be ahead of the game.

Excewpt you can't ever use the land for anything. Assuming it was zoned agricultural to begin with, youcould not us it for anything but ag anyway (no hay rides), and the "Save the Farm" sentiment means it is unlikely to ever change.

Therefore the conservation easement "gift" costs you nothing. In my areas most conservation easements are "given" by folks of advanced age, whose children have no interest in the farm.

Aside from the purported losses due to development, county officials claim they want to "Save the Farms" because they pay twice in much in taxes as they use in services. I have pointed out to them that if they really want to help save the farms, they could just tax us what (they claim) we cost them.

Neighboring counties have entirely different policies. In the county to the north pretty much any business activity is allowed on a farm, so long as you can tie itto the land somehow.

The county to the south operates a huge and popular farmers market, which is held at dedicated facilities near the county courthouse.

Maryland operates a loan fund which will lend money and offer other assistence in establishing farmers markets, with the result that they have many excellent and well run markets.

I don't mind paying the extra agricultural taxes (over and above my residential real estate taxes), but I'd like to see some agricultural services for them instead of watching the money subsidise those in the more residential areas.

Before Juandos has apoplexy, I'll just say that there are things the county can do for the farmers, with money paid by the farmers, that the individual farmers cannot do. Co-ops, of course could do some of the same things, but Co-ops have organizationa and management issues of their own, and that overhead is has to be supported in addition to the county overhead.

At 5/22/2010 4:52 PM, Blogger Ron H. said...

>"Before Juandos has apoplexy..."

It's not just juandos, I'm just glad I took my blood pressure med this morning.

I don't see how limiting what you can do with your own property is helping to "save the farm"?

I guess if you know who benefits from such insanity, then it makes sense. As you mentioned, politically connected folk, and most likely large conglomerates.

Thanks for the informative comments.

At 5/22/2010 5:26 PM, Anonymous Anonymous said...

I don't see how limiting what you can do with your own property is helping to "save the farm"?

Me either, obviously. And I have made that argument in toe to toe nose to nose confrontations with the local government.

At one time, this area was zoned for one house per three acres. I have been downzoned six times, and now I have no development rights left. I could apply for rezoning, but the process of application would cost me over $100,000, and I would inevitably be turned down.

Even if I never used any of the rights, the possibility would have been worth millions, which affects my ability to borrow, among other things.

If I chose to "develop" I could go on a part of the farmthat is rocky and hilly, not used for anything anyway, and put in a modest home for a state trooper or teacher, give them a stable and riding privileges, and it would be a dreamscape for them.

The rental would make as much money in a month as the farm makes in a year. Maybe five years.

If I do not farm the property, then it will be taxed at residential rates, even though I could not convert it to residential.

Basically, I am a serf, forced to work for the county, even though I could do more valuable work (which I beleive would benefit the county more).

The difference in tax is hard to guess, but it could easily be $8000 a year, and maybe ten times that.

Therefore, the name of the game is to operate the farm and lose less than you would be taxed otherwise. I do better than that, but most farms don't. If you look up the AG school budgets, you can see why: the gross profit on an acre of soybeans is around $25.

I could sell out, but this is home, and has been for almost 200 years. Besides, who would buy?

Only someone so wealthy they don't care how much they lose. This has been set up as a give away for rich people, who will buy it at a fraction of its true worth, which is still higher than regular people can afford.

In fact, a county official once had the gall to tell me to my face "My plan for your property is to have someone wealthy buy it so they can afford to put it in conservation easement."

My response to him was that I would give it away to Habitat for Humanity first.

I have previously written to Institute for Justice, but they consider my county to be a lost cause.

Just to make it clear, this place is located directly adjacent to an interstate, between two exits. Sixty acres of the farm was taken under eminent domain to build the highway. It would make a great truck stop. If it was anyplace else in the state, it would be zoned light industrial.

But the county figures it is better off if this place earns $50 an acre, so that we can "Save the Farms"

At 5/22/2010 5:37 PM, Anonymous Anonymous said...

I once went to a presentation given by some conservation easement agency. The lady speaking gave an eloquent address and described how may hunds of thousands of acres had been preserved. She was selling the advantages of conservation easements.

During the question and answer session I asked her how they would know when they had preserved enough land.

You would have thought I had slapped her in the face.

"Well, I don't think we have preserved nearly enough."

"Yes, but don't you see that eventually this will raise the price of homes? Obviously that is great for those that already own, but what about their children?"

Silence. She had never considered such a thing.


Aside from the tax fraud investigations associated with highly inflated property values for giving up land for conservation easemnt that is of dubious value, there is a famous story of abuse.

Afellow in PA had a farm that he operated part time for decades. It was under conservation easement with the stipulation that only farm related structures could be built.

When he retired, he wanted to move to the farm and he applied to build a farm house, which the conservation agency denied.

He sued, and the court allowed as how a farmhouse could be a farm related structure, so he built his home.

The conservation agenciy appealed, and won. Then they bulldozed his home. He was by then in his 80's.

At 5/22/2010 5:45 PM, Anonymous Anonymous said...

I've got about a hundred acres of forest. I'm thinking I should clear cut it now and take the money.

Then when cap and trade is passed I can replant it and appply for carbon sequestration credits.

But if I have existing forest, i won't be eligible.

I tell anyone who will listen that the best way to sequester forest carbon is to make a Stradivarius out of it.

I am an environmental scientist by training, but these conservation folks are nuts, by and large.

At 5/22/2010 5:50 PM, Anonymous Anonymous said...

At one time I wanted to add a rec room to the farm cottage I rent.

County authorities told me it would "count" as a bedroom and therfore I needed to add on to the septic field.

When I made application to do that I was told I did not have enough land for drainfield, and it did not drain well enough.

By the time they got through with me a $15,000 project was going to cost $45,000, so it never happened.

The same day I applied at another county agency to dredge out an old pond that had filled in, near the cottage.

I was told that the area would not hold water because the soil drained too fast. I'd have to put in a clay liner at a cost of $30,000.

At 5/22/2010 5:52 PM, Anonymous Anonymous said...

Then ther is the story of the Lady in King county who bought an old place. There were a buch of old appliances that had been dumped in the back yard, which she cleaned up.

Unfortunately, the appliances had been overgrown with brush, and she wound up being fined $15,000 for "removing native vegetation".

At 5/22/2010 5:58 PM, Anonymous Anonymous said...

Then there was the lady who put her place in conservation easement. It was the only such property in that area and over time the surrounding properties were developed.

Eventually, she died without heirs, or heirs who didn't want the porperty, it not being useful for anything.

Predictably, her conservation site became an unauthorized dumping ground. The conservation agency holding the easement did not want to spend to clean it up. (They don't own the property, just the development rights to it.)

The eventual owners approached the conservation agency with a deal. Sell us back the development rights to this property, and we will provide a conservation easement on another (less valuable) property farther west.

No deal.

Last I heard the case was still in court.

At 5/22/2010 9:47 PM, Anonymous Anonymous said...

One more story.

This was the young rancher out west that inherited his family place, with conservation easement intact. It never bothered him because all he wanted to do was ranch as his ancestors had.

Eventually the board of directors of the conservation agency died off and a new baord was installed.

Eventuyally they came to inspect the property to make sure the terms of the easement were complied with.

They were shocked - apalled to learn that the younger rancher used 4 wheel ATV's to heard the stock. Just as his father had.

You can guess what happens next......

At 5/23/2010 1:35 AM, Blogger Ron H. said...

>I've got about a hundred acres of forest. I'm thinking I should clear cut it now and take the money.

Then when cap and trade is passed I can replant it and appply for carbon sequestration credits.

That's probably the best plan. You never know when spotted owls might decide to nest there, then you're screwed.


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