Author: Andrew Branan

The recent H.R. 1 budget reconciliation bill signed into law on July 3, 2025 made a number of changes to farm programs and qualifications that would normally be addressed in a five year farm bill. One of these is payment limitations on federal programs (e.g. conservation, crop insurance subsidies, disaster payments, etc.) imposed on farms organized as S corporations (S corps) or limited liability companies (LLCs). The need for this change was highlighted in a previous Southern Ag Today article that called attention to the disparate treatment of certain entities. As noted in the article, modern-day payment limitations trace their origins to the 1970 Farm Bill.. Since that time, larger farms – those with multiple owners actively engaged in operations – often have required specialized structuring to allow their operating or landholding entity to capture more than one payment limitation to contribute to the overall operation.

Since the 2008 Farm Bill, LLCs and S corps have been treated as “individuals” and limited to one payment limit, regardless of the number of members or shareholders in the entity. This was the case even though for federal income tax purposes, these entities are considered “pass through” entities where the individual equity owners pay or take their pro-rata share of tax liability (or loss). Partnerships and joint ventures on the other hand were explicitly exempt from the payment limit, so each partner could receive payments up to their individual limitation and apply to the business of the partnership or joint venture (i.e. the farm operation). One distinction is that such arrangements are not considered entities in that they do not require registration and formation under state law. As such, partnership arrangements are not considered legal individuals, and they do not shield the equity owners from individual liability for actions of the partnership or other partners.Such lack of liability protection made operating as a partnership risky to the individual partners, perhaps not worth the risk simply to attain multiple payment limitations. A workaround legal arrangement came into practice, whereby the farm firm would operate as a partnership, but the individual partners would organize single member limited liability companies or S corps and assign their interest to their LLC or corporation, such that the LLC or corporation became the partner, rather than them in their personal capacity. This had the theoretical effect of shielding their personal assets from any tort litigation liabilities of the partnership. The arrangement looked like this:

In this arrangement, instead of the farm being limited to one payment of $125,000, each individual LLC would qualify for a payment, so the farm operation could benefit from $375,000 in federal benefits (3 x $125,000).

The HB1 provision now places LLCs and S corps alongside partnerships and joint-ventures as pass-through entities for payment limitation purposes. Now, the farm may bypass the step of forming a partnership and organizing individual “partner entities,” and go straight to organizing the farm firm as one LLCs or S Corp. Each individual partner or shareholder who is “actively engaged in farming” will have their own payment limitation, so the farm firm benefits from the individual limitation multiplied by the number of members (LLC) or shareholders (S Corp). The limitation itself – previously set at $125,000 per individual – has also been raised to $155,000 per individual. The Secretary of Agriculture is authorized to increase this amount yearly with inflation. The simplified arrangement – along with the increased payment limit – may be formed as:

Whether farm firms will reorganize may be a matter of cost priority. The higher costs of the arrangement under the old rules came in the form of tax accounting for both the partnership and each individual partner entity, annual filing fees with the secretary of state, plus increased paperwork with the county Farm Service Agency office. For brand new operations, reduced legal fees and state filing fees should offer savings.

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Branan, Andrew. “New Federal Law Simplifies Payment Limitations.” Southern Ag Today 5(32.5). August 8, 2025. Permalink

Johnson County, Texas, recently requested federal disaster relief over PFAS contamination from biosolid applications on farmland, adding perhaps another theory of redress for such contamination of soils and water. PFAS, which stands for per- and polyfluoroalkyl substances, are man-made chemicals applied in various consumer and industrial uses. PFAS do not easily degrade in the environment and are often referred to as “forever chemicals.” While scientists are early in understanding PFAS’ full range of health and environmental effects, studies indicate links to adverse health outcomes, including cancer and liver and thyroid functioning. PFAS have been released across the county in the air, into water, and onto land. The federal disaster request supplements Johnson County residents’ 2024 federal environmental lawsuitagainst the Environmental Protection Agency (EPA) and state tort claim against a fertilizer manufacturer.
 
Biosolid applications – the disposal of the solid-waste remnants of treated wastewater – have been regulated since 1987 under the Clean Water Act §405(d) (CWA), whereby states may permit application and dispersal in a manner that is “a local determination.”  The majority of states have biosolid application permitting programs, though Maine banned biosolid applications statewide due to concerns over PFAS contamination. In the South, Texas has introduced PFAS standards for biosolids, whereas Oklahoma and Mississippi have introduced legislation to ban biosolid applications outright. 
 
The Texas farmers’ federal lawsuit alleges EPA’s failure to identify and regulate various PFAS compounds under authority and mandate of the CWA and the Administrative Procedures Act. They complain the EPA failed to add PFAS as toxic substances in the biennial review mandated in the 1987 amendments. The EPA responds that listing of toxic pollutants is discretionary. The CWA requires the EPA to make toxic listings “on the basis of available information,” and plaintiffs cite a sizable body of research in their complaint. In the months before the federal lawsuit, the EPA listed PFAS as toxic substances under other federal statutes, including the Safe Drinking Water Act, the Comprehensive Environmental Response Cleanup and Liability Act, and the Toxic Substances Control Act. 
 
The state tort case – Farmer v. Synagro – seeks compensation from the manufacturer of a biosolid-based fertilizer that plaintiffs claim damaged their properties and farm operations. Such common law actions normally couple federal citizen suits. The legal theories in Farmer v. Synagro are strict liability (for producing and marketing an “unreasonably dangerous” product), negligence (foreseeable harm from unreasonable risk), and private nuisance (for unreasonable interference with use and enjoyment of their land). Death of farm animals and diminution in property value are among plaintiffs’ allegations of damages. Defenses to liability in these cases vary by state and may emerge relative to risk assumption and presumptions against negligence that applicators might invoke, considering the applications were regulated and permitted. Legal theories concerning recovery for damage from biosolid applications are also being tested in litigation in Maine, Massachusetts, Wisconsin, and elsewhere.

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Brannon, Andrew. “Addressing PFAS Biosolid Contamination on Farmland.” Southern Ag Today 5(9.5). February 28, 2025. Permalink

The emerging conflict between utility-scale solar development and farmland loss has generated growing interest in proving the economic viability of continued agricultural production on landscapes leased for solar use, introducing the neologism agrivoltaics. Rural community resistance to solar development is expressed at the focal point of county zoning approval, with citizen testimony raising concerns over negative environmental and property value impacts on the surrounding community. Though such protestations without supporting research often fail to rebut a case for rezoning (depending on state law standards), the friction with agricultural producers remains of greater economic concern due to perceived loss of output and farmland “loss.” The reduced costs of solar development on working farmland – no tree removal, existing drainage infrastructure, road access – are well understood, and the numerous efforts by state and local governments to deter such development vary in success. 

The body of research on the projected aggregate agricultural economic impact of state renewable energy targets is in its infancy. However, the immediate impact to individual producers losing leased fields to solar development is easily measured in lost production acres, and such individuals often retain significant voice and goodwill in the community. The growing body of policy work on decommissioning of solar facilities – i.e. the promise that one day the land may be farmed – fails to address short term concerns.

One principal area of addressing such friction is the exploration of a compromise in farmland loss and resulting economic impact. Given the present economic limitations between prevalent low-to-ground technology and panel spacing, continued agricultural production options – and ag economic output – remain limited. According to the National Renewable Energy Laboratory’s OpenEI Agrivoltaics Map, there are 517 dual-use solar facilities covering 61,477 acres and generating 9844 megawatts of electricity. (The author is aware of dual use facilities not appearing on the map.) The vast majority of these sites are devoted to pollinator habitat production – with its tenuous economic impact – with the next predominant agricultural use of sheep grazing. Some sites support active research, including blueberry production (Maine). Limited U.S. markets for sheep meat and wool may serve as a bottleneck to wider implementation of agrivoltaic grazing regimes. Site opportunities for grazing contracts may be misaligned with available grazing services, local producers and processing. The national leader in solar grazing efforts – American Solar Grazing Association – maintains its own map of agrivoltaic grazing sites.

The US Department of Energy has stepped up research funding into this area, and there are numerous active research projects underway across the country. One recent agrivoltaic grazing research grant application by NC State University illustrates possible research approaches: 1) incorporating diversified livestock grazing into vegetation management regimes – that would otherwise rely on equipment and chemical applications – to measure the impact of grazing on soil health, water quality and carbon sequestration; 2) an enhanced understanding of resource and site design requirements (e.g. panel spacing, height); and 3) exploration of socio-economic impacts in the local community to better understand long-term acceptance of agrivoltaic systems, economic viability to producer, landowner and producer, and scalability of such systems. 

The exploration of the third item may have a direct impact on reducing zoning hearing friction. At least one study^[1] finds that “81.8% of respondents [to a survey] would more likely support solar development in their community if it integrated agricultural production” and other social responses are revealed on the figure below.  As noted, academic research into statewide and community agricultural economic impacts is needed, and as are the likely economic compromises and policy incentives required for scalable and high-value agricultural output to address concerns over farmland loss. 

Image reproduced from article Pascaris, A.S. et al, Do agrivoltaics improve public support for solar? A survey on perceptions, preferences, and priorities, Department of Social Sciences, Michigan Technological University, 1400 Townsend Drive, Houghton, MI 49931, USA

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^[1]  Pascaris, A.S., Schelly, C., Rouleau, M. et al. Do agrivoltaics improve public support for solar? A survey on perceptions, preferences, and priorities. GRN TECH RES SUSTAIN 2, 8 (2022)

The recent U.S. Supreme Court ruling in Sackett v. EPA appears to settle the question of where water ends and land begins under Section 404 of the federal Clean Water Act (CWA). The ruling that the CWA only covers wetlands with a continuous surface connection to a traditionally navigable waterway has been heralded by farming interests for providing clarity to farmers, presumably on decisions whether to alter wetland features on their lands. However, farmers and landowners should be reminded that wetlands conversion still may carry risks under state and other federal law, and that Sackett should not be taken as an indication that other wetlands protections will not be enforced on wetlands no longer covered by the CWA.

Importantly, the Sackett surface connection rule does not change the federal government’s wetlands policy and regulation authority under the Swampbuster provision of the 1985 Farm Bill. Swampbuster denies eligibility for federal subsidy programs to farmers and landowners who convert wetlands, carving out an exception for wetlands converted prior to 1986. Though the Natural Resources Conservation Service (NCRS) may refer to the Army Corps of Engineers’ Wetlands Delineation Manual (the guidance document on CWA 404 determinations)  in its own determinations, the Sackett decision does not restrict NRCS to the “surface connection rule’ when identifying wetlands for purposes of Swampbuster benefit determinations.

NRCS wetlands authority under Swampbuster was recently addressed by the 9th Circuit in Foster v. USDA. The case supports the policy that farmers can apply for reconsideration of wetlands designation, which obligates NRCS to make a new determination.

Additionally, non-CWA wetlands may still benefit from state protections. Most southern states have laws protecting isolated wetlands, though North Carolina recently aligned state wetlands definitions with the new post-Sackett rules (Tennessee has introduced a similar measure). In short, though Sackett will likely result in fewer determinations of wetlands for purposes of CWA 404 permits, the decision should not be taken by farmers as an invitation to self-determine wetland status and the resulting consequences of draining or filling habitually wet areas on their farms.

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Brannon, Robert Andrew. “Wetlands Protection under Swampbuster.” Southern Ag Today 3(43.5). October 27, 2023. Permalink

There is understandable concern within the livestock production community and processing industry that footage of production practices may be used to build public opinion against the accepted practices of their trade. One known purpose of so-called “ag gag” laws is to prevent animal rights organizations from directing an individual to infiltrate an animal agriculture operation as an employee of that operation – usually a swine, poultry, or dairy farm – to secretly record activities, which may then be used to publicize perceived animal cruelty and the like. Such laws variously impose criminal or civil penalties on farm employees who clandestinely gather imagery and may also hold accountable a third party (i.e., an animal rights organization) directing such activity. Ag gag laws have generally been challenged in federal courts as violations of free speech.

Early iterations of ag gag laws focused squarely on agricultural protection – such as Alabama’s 2002 Farm Animal, Crop, and Research Facilities Protection Act – in an era of bioterrorism fears. More recent laws – such as those passed in Arkansas and North Carolina – do not specifically target agricultural protection. Though initially dismissed, the challenge to Arkansas’ statute was revived in 2022 by the 8th Circuit Court of Appeals and remains under review.

North Carolina’s “ag gag” law – The Property Protection Act (N.C.G.S. 99A-1)[1]  – was recently tested before the U.S. Court of Appeals for the 4th Circuit, which limited the application of the statute but did not invalidate it. The NC Property Protection Act creates a right of action on behalf of employers against employees who, without permission, collect information by various means, including unattended recording devices, offering employers recoverable damages up to $5,000 per day, plus attorney’s fees. The Act also holds accountable those who intentionally direct, assist, compensate, or induce another person to trespass (i.e., animal rights organizations).

The 4th Circuit Court’s opinion, North Carolina v. PETA, illustrates how language in an ag gag statute can run afoul of U.S. constitutional protections on newsgathering and free speech, and declined to apply principles of common law trespass or an employee’s “duty of loyalty” to supersede free speech protections of employees and their newsgathering efforts. Because the NC law has not been tested, the Court limited the bar of its application only to the parties in the case (i.e., PETA and others), and declined to invalidate the law, adopting a wait and see approach to how it might be used in the future.

A more in-depth look at the Court’s opinion can be found in this article.

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Branan, Robert Andrew. “What is an “Ag-Gag” Law?” Southern Ag Today 3(13.5). March 31, 2023. Permalink

Photo by CQF-Avocat: https://www.pexels.com/photo/scrabble-tiles-613508/