Item One: On Dec. 15 the Federal District Court for the District of Nebraska ruled the nation’s toughest anticorporate farming law, Nebraska’s Initiative 300, unconstitutional because it violated the “dormant commerce clause” of the U.S. Constitution and the Americans with Disabilities Act.

The ruling, which will be appealed by the state, now leaves just nine states with varying levels of anticorporate farming laws.

It also cracks the door for the Big Packer Boys to declare open season on independent livestock producers in the Cornhusker State, the nation’s largest red meat producer (despite 20-year-old claims that I-300 would kill beef and pork production there), and one of the last bastions of cash cattle and hog markets.

More darkly, however, the ruling gives agbiz three legal wins in a row over state anticorporate farming laws - South Dakota, Iowa and now Nebraska.

All pivoted on one, crucial hinge: smart lawyering that led a more business-pliant federal judiciary to an ever looser interpretation of the federal dormant commerce clause that forbids states from enacting “discriminatory” laws to impede interstate business.

That pliancy is now hardening into case law, notes Roger McEowen, an associate professor of ag law at Iowa State University, in a Jan. 6, 2006 Agricultural Law Digest article co-authored with ISU colleague Neil Harl, because none of the three courts examined “the actual impact” of the anticorporate farming laws before tossing them out.

While the Nebraska “opinion appears to be seriously flawed,” McEowen holds little hope for reversal through appeal.

Instead, Congress should “address the anti-competitive effects of concentrated agricultural markets and vertically integrated production supply chains” these court-approved assaults continue to bless.

A second, important hinge to these cases is that agbiz found farmers to front the corporate court challenges. In short, farmers loaded the gun; agbiz pulled the trigger.

Item Two: Just days before Christmas Congressional Scrooges agreed to cut nearly $3 billion in ag spending over the next five years. The path was greased by opinion makers like the Washington Post which, on Oct. 19, used the upcoming budget fight to note:

“...As with Hollywood Mafiosi, the farmers’ lobbying muscle is based on a combination of charm, thuggery and bribery. They exploit urban sentimentality about the pastoral idyll... When sentiment and charm don’t work, farmers get their way with other tactics... The American farm lobby... makes slightly more than $50 million worth of political donations in each election cycle.”

Item Three: Despite all the D.C. sanctimony over federal farm subsidies, 31 percent of 805 farms in a statewide University of Illinois study pocketed less than $20,000 in income in 2005.

Additionally, noted the U of I study released in December, in three of the last five years net income on the Illinois’ farms surveyed was less than the government payments received. Indeed, without government payments 40 percent of the farms in the survey would have logged negative incomes in the last six consecutive years.

Items Four and Five: If the already put-in-place 2009 federal estate tax exemption of $3.5 million was the law in 2000, only 65 farms nationwide would have paid any estate taxes that year, according to the non-partisan Congressional Budget Office. Using the same 2000 IRS data for 2006, when the exception rises to $2 million, only 124 farm estates across the country would have paid taxes.

According to an Aug. 31 survey by the Illinois Society of Professional Farm Managers and Rural Appraisers, 56 percent of all land buyers in the state during the first six months of 2005 used 1031 Tax-Deferred Exchanges to avoid federal capital gains taxes while pushing land prices to over $5,000 an acre in many prime farmland areas.

As such, why aren’t farm groups - and their expensive lobbyists - fighting for tax changes to drain the 1031 price pressure that affects every working farmer and rancher as hard as they are for estate tax changes that affects only a handful?

Published in the January 11, 2006 issue of Farm World.