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VOLUME 17, NUMBER 11, WHOLE NUMBER 204 OCTOBER 2000

hree
T hr GAO
ee GA re
O r port
eports
The United States General Accounting Office (GAO) recently issued three analyses
warranting attention in the agricultural law community: U.S. Gen. Accounting Office,
Packers and Stockyards Programs: Actions Needed to Improve Investigations of Com-
petitive Practices (GAO/RCED-00-242, Sept. 2000); U.S. Gen. Accounting Office, Sugar
Program: Supporting Sugar Prices Has Increased Users’ Costs While Benefiting Pro-
ducers (GAO/RCED-00-126, June 2000); and U.S. Gen. Accounting Office, Farm
Programs: Observations on Market Loss Assistant Payments (GAO/RCED-00-177R,
Correspondence to the Hon. Dan Glickman, June 30, 2000). These and other reports

INSIDE relating to agriculture and food can be found at www.gao.gov.


In the first of these analyses, the GAO examined the ability of the USDA Grain
Inspection, Packers and Stockyards Administration (GIPSA) to monitor and remedy
unfair and anticompetitive practices in the livestock industry under the Packers and
• District Court rules Stockyards Act. Its resulting report follows by nearly a decade an earlier report
criticizing the USDA for its enforcement shortcomings. See U.S. Gen. Accounting
non-point sources Office, Packers and Stockyards Administration: Oversight of Livestock Market Com-
are included in listing petitiveness Needs To Be Enhanced (GAO/RCED-92-36, Oct. 1991). It follows numerous
of impaired requests for more vigorous enforcement from private citizens, see, e.g., 62 Fed. Reg.
waterways, 1845 (1997) (petition for rulemaking on packer livestock procurement practices), and
the failure of GIPSA to successfully prosecute its unfair practices claim against IBP,
calculation of total an effort that ended in a total victory for IBP. See In re IBP, Inc., P & S Docket No. D-
maximum daily loads 95-0049 (1998); IBP, Inc. v. Glickman, 187 F.3d 974 (8th Cir. 1999).
In its September, 2000 report, the GAO concluded that “[t]wo principal factors
detract from GIPSA’s ability to investigate concerns about anticompetitive practices
in the cattle and hog markets.” Packers and Stockyards Programs at 5. The first is the
absence of formal involvement between GIPSA economists and Office of General
Counsel (OGC) attorneys in the planning and conducting of GIPSA investigations.
This absence is compounded by a decrease in the number of OGC attorneys assigned
to GIPSA cases from eight to five since 1998 because of budget restraints and the
limited experience of the GIPSA economists. Second, the GAO found that “GIPSA’s
investigative methods were not designed for addressing complex anticompetitive
Solicitation of articles: All AALA practice concerns–they were designed for the trade practice and financial issues that
members are invited to submit the agency has emphasized for years.” Id. at 6. The GAO recommended that GIPSA
articles to the Update. Please in- consult with the Department of Justice and Federal Trade Commission on the design
clude copies of decisions and leg- of investigative program improvements, and it noted that the USDA concurred with its
islation with the article. To avoid report in this respect. In addition to its discussion of these deficiencies, the report
duplication of effort, please no- discusses the authority given to the USDA under the Packers and Stockyards Act to act
tify the Editor of your proposed against anticompetitive practices in the livestock industry, and it also reviews recent
GIPSA investigations into possible anticompetitive practices in the industry.
article. In its report on the sugar program, the GAO concluded that the sugar program
resulted in net losses to the national economy of about $700 million in 1996 and about
$900 million in 1998. See Sugar Program at 22. The sugar program supports the price

IN FUTURE of domestic sugar through loans and tariff-rate import quotas that restrict the supply
Continued on page 2

I SSUES ennsylvania’
P ennsylv
conserv
conser
ania’s
ania’ seexper
xperiences
xperiences with
vation easements
This is the second of a two-part article that examines Pennsylvania’s experience with its
• New water quality Purchase of Agricultural Conservation Easements (PACE) program, the Commonwealth’s
regulations raise most visible farmland preservation program, placing the PACE program in the context
of other farmland preservation methods before looking at some lessons from Pennsylvania’s
questions about EPA experience and future program directions.
influence over
agricultural practices Farmland preservation techniques
Purchase of conservation easements for farmland preservation is sometimes referred
to as a third generation preservation technique. Zoning is a first generation technique.
Continued on page 2
GAO/CONTINUED FROM PAGE 1

of imported sugar that can be imported at Bruce Ingersoll, U.S. Offers to Give Gov- vided a 100% “supplement” to PFC pay-
a low tariff rate. As a result, domestic ernment Sugar To Farmers Who Destroy ments. In other words, in fiscal years 1999
sugar in 1998 was priced at more than 10 Part of Crop, Wall St. J., Aug. 3, 2000 at and 2000, a farm that received $40,000 in
cents per pound higher than the world A6; FSA Notices SU-60 and SU-61. PFC payments also received $40,000 in
price. In 1998, the program produced wel- In its report on market loss assistance MLA payments.
fare gains to sugar beet and sugar cane (MLA) payments, the GAO found that To receive PFC payments, however, an
producers and processors in excess of one farmers were both “over-paid” and “un- eligible person does not have to produce
billion dollars. However, losses to sweet- der-paid,” depending on whether they ac- wheat, feed grains, cotton, or rice. In fact,
ener users and to the national economy tually produced the commodities for which no commerical crop need be planted on
resulting from production and consump- the payments were made. Since 1998, PFC acreage. See, e.g., 7 C.F.R. §
tion inefficiencies and transfers to foreign Congress has authorized MLA payments 1412.401(c). Nonetheless, MLA payments
countries approached two billion dollars. for wheat, feed grains, cotton, and rice. See for wheat, feed grains, cotton, and rice
Thus, the sugar program, while benefit- Omnibus Consolidated and Emergency were directed to the farms owned or oper-
ting only from 8,000 to 12,000 sugar cane Supplemental Appropriations Act of 1999, ated by these persons irrespective of their
and sugar beet farmers, cost the national Pub. L. No. 105-277, tit. XI, § 1111, 112 actual plantings. As a result, according to
economy about $900 million in 1998. More- Stat. 2681, 2681-44-2681-45; Agriculture, the GAO, in 1999 “about 27 percent of the
over, it contributed to an over-supply of Rural Development, Food and Drug Ad- $4.5 billion in ad hoc MLA payments in-
domestic sugar this year. Id. at 6-22. As a ministration, and Related Agencies Ap- cluded in our analyses went to farms that
result, the USDA spent $54 million in propriations Act, 2000, Pub. L. No. 106- would not have received this assistance if
June 2000 to purchase sugar in an effort to 78, tit. VIII, § 802, 113 Stat. 1135, 1176; the payments had been based on current-
prop up the domestic sugar price. Because Agricultural Risk Protection Act of 2000, year plantings.” Observations on Market
these purchases failed to markedly im- Pub. L. No. 106-224, tit. II, § 201(b), 114 Loss Assistance Payments at 2. Specifi-
prove prices, the USDA is now implement- Stat. 358, 398. These payments were os- cally, the GAO found that “about 893,000
ing a sugar payment-in-kind program that tensibly intended to help offset the de- farms received about $1.22 billion more
is paying sugar beet producers up to clines in market prices for these commodi- than they would have received” had MLA
$20,000 per person to forego harvesting ties. The MLA payments, however, “fol- payments been based on current-year
their sugar beet acreage. See generally lowed” production flexibility contract plantings. Id. On the other hand, in the
(PFC) payments. In other words, MLA same year “about 400,000 farms adversely
payments were paid only to persons who affected by falling prices would have re-
received PFC payments, and the MLA ceived about an additional $300 million in
payments were paid in proportion to the MLA plantings if the payments had been
PFC payments a farm received. In fiscal based on that year’s plantings.” Id.
year 1998, MLA payments “supplemented” —Christopher R. Kelley, Asst. Prof. of
PFC payments by about 50%. In fiscal Law, University of Arkansas, Of Counsel,
years 1999 and 2000, MLA payments pro- Vann Law Firm, Camilla, GA
VOL. 17, NO. 11, WHOLE NO. 204 October 2000

AALA Editor..........................Linda Grim McCormick


Rt. 2, Box 292A, 2816 C.R. 163 PENNSYLVANIA/Cont. from p. 1 preserving agriculture. Compared to the pre-
Alvin, TX 77511 It treats agriculture as a community land viously described preservation techniques,
Phone: (281) 388-0155
FAX: (281) 388-0155 use and controls disruption of farming by these are long term and permanent ways of
E-mail: lgmccormick@teacher.esc4.com non-farm development. preserving agricultural land.
A special type of zoning, referred to as Pennsylvania has a full array of first,
Contributing Editors: Christopher R. Kelley, University
of Arkansas, Fayetteville, AR; Timothy W. Kelsey, The agricultural protection zoning, can be very second, and third generation agricultural
Pennsylvania State University; Stanford M. Lembeck, effective at preserving agricultural land. preservation techniques. Each technique does
The Pennsylvania State University; Anne Hazlett, something different and operates at a differ-
Agricultural Law Program, University of Arkansas,
Agricultural protection zoning views agri-
Fayetteville, AR; Barclay R. Rogers, Agricultural Law culture as a fully developed use, so its intent ent government level. For example, agricul-
Program, University of Arkansas, Fayetteville, AR. is to protect productive agricultural land tural zoning is a municipal activity, as is the
For AALA membership information, contact from further development. Zoning is a rela- creation of agricultural security areas. Pref-
William P. Babione, Office of the Executive Director, tively low cost preservation technique (from erential tax assessment occurs at the county
Robert A. Leflar Law Center, University of Arkansas, a local government perspective) because the level. The purchase of conservation ease-
Fayetteville, AR 72701.
major costs are in preparing and administer- ment program is a joint county-state, and
Agricultural Law Update is published by the ing the ordinance. sometimes municipal, effort. Municipalities
American Agricultural Law Association, Publication have recently been authorized to participate
office: Maynard Printing, Inc., 219 New York Ave., Des
Second generation preservation tech-
Moines, IA 50313. All rights reserved. First class niques include preferential taxation of farm- financially in the program and be an owner
postage paid at Des Moines, IA 50313. land, agricultural districting, and right-to- of the easement in proportion to the funds
This publication is designed to provide accurate and
farm laws. Preferential taxation generally they supply. Most important to remember,
authoritative information in regard to the subject taxes agricultural land at its use value (in- however, is that the conservation easement
matter covered. It is sold with the understanding that stead of higher market value) to provide a purchase program is voluntary. While there
the publisher is not engaged in rendering legal,
accounting, or other professional service. If legal advice tax incentive to encourage farmers to stay in is much productive farmland in strategically
or other expert assistance is required, the services of farming. Agricultural Security Areas (Act 43 important locations, only farmland that is
a competent professional should be sought. of 1981) confer special benefits to farm land- voluntarily offered can be purchased. In many
Views expressed herein are those of the individual
authors and should not be interpreted as statements of owners, and also makes them eligible to respects this is a program strength, but
policy by the American Agricultural Law Association. participate in PACE. The right-to-farm law ultimately the success of PACE is controlled
Letters and editorial contributions are welcome and
(Act 133 of 1982) helps farmers in nuisance by landowner decisions whether or not to
should be directed to Linda Grim McCormick, Editor, conflicts. participate.
Rt. 2, Box 292A, 2816 C.R. 163, Alvin, TX 77511. Purchase of conservation easements—
Copyright 2000 by American Agricultural Law sometimes called purchase of development Lessons from Pennsylvania
Association. No part of this newsletter may be rights—and transfer of development rights As of March 23, 2000, Pennsylvania’s pro-
reproduced or transmitted in any form or by any means, (TDR), are third generation preservation gram had purchased conservation easements
electronic or mechanical, including photocopying,
recording, or by any information storage or retrieval techniques. They involve the transfer of a on 1,260 farms, for a total of 156,289 acres.
system, without permission in writing from the valuable property right, and substantial sums Purchases have been made in 42 of the 50
publisher. counties with approved programs, at a total
of money. Purchase of conservation ease-
ments is a public investment strategy for Cont. on p.3

2 AGRICULTURAL LAW UPDATE OCTOBER 2000


cost of $303,179,889 (average price of as the measure of farm productivity was essary to do this, however, is unclear, but
$1,939.85 per acre). The acreage saved con- eliminated, and in its stead a more flexible research efforts to determine this are cur-
stitutes about 4.8% of farmland in agricul- set of criteria was created, which each county rently on-going.
tural security areas (the area eligible for could adjust to effectively deal with its par- It obviously takes time for a sufficient
purchases), and 2.2% of Pennsylvania’s total ticular preservation issues. number of farmers selling easements in a
agricultural land. Currently, each farm receives a priority geographic area to create such a critical
With the depletion of the original $100 ranking for purchase, using a two-part scor- mass, but it is happening in many counties.
million voter-approved 1987 bond issue, the ing procedures: land evaluation of the soils For example, East Donegal Township in
program in recent years has been funded on the farm and site assessment of key Lancaster County has had 58 farm ease-
annually with $20-22 million from cigarette features affecting the farm parcel. The flex- ments purchased on a total 4,800 acres,
taxes. For the 2000 program year, the thresh- ibility comes in the site assessment, which which is 44% of the total 10,900 acres in the
old funding amount is increased significantly must include three considerations: agricultural security area; Franklin and Mt.
to $45 million, well above the $28 million (1) Development potential-factors that Pleasant townships in Adams County each
threshold for 1999. State funding is supple- identify the extent to which development have over 1,000 eased farm acres; there is
mented with participating counties’ funds, pressures are likely to cause conversion of significant clustering in Lynn, Lower Milford,
amounts that have been quite variable. In agricultural land to non-agricultual uses; Heidelberg and Weisenberg townships in
1999, county appropriations for easement (2) Farmland potential-factors that mea- Lehigh County. Time being the critical ele-
purchases were $9.5 million; for 2000 the sure the potential agricultural productivity ment in clustering, counties that have par-
county allocations total $24 million. This or farming practices on the farm; ticipated in the PACE program since its
year’s funding level will allow a significant (3) Clustering potential-factors that mea- inception lead in clustering, but over time
increase in easement purchases. sure the importance of preserving blocks of others will show comparable clustering re-
Pennsylvania farmers continue to show a farmland that support commercial agricul- sults. Adams, Berks, Chester, Lancaster,
very strong interest in participating in the ture and help shield farming against con- Lehigh and York counties have preserved
program. Lancaster County currently has flicts with incompatible land uses. from 10,000 to over 20,000 acres of farmland.
150 approved farms awaiting sale, with hun- Using criteria such as these, a county can
dreds more in the pipeline. Lehigh County place different degrees of importance on each Is PACE directed to where it will do the most
has 65 parcels in process, 13 of which are of the site assessment factors. This allows “good”?
ready for state action and 6 awaiting land- local agricultural preservation priorities to A related concern is which masses of farm-
owner approval of the purchase price. Adams be addressed in the selection of key farm land are necessary to keep agriculture viable
County’s 1998 round of applications includes parcels for easement purchase. The improved in Pennsylvania, and thus most need protec-
107 farms with 13,000 acres. However, only scoring criteria makes the program more tion. Eight of Penn-sylvania’s top ten agri-
20% of these applications, totaling 2,500 sensitive to local preservation needs. cultural counties are located in the south-
acres, can be funded with its available alloca- eastern and south central area of the state,
tion of funds. Other counties are in similar Does Pennsylvania’s program really protect where much of the state’s development is
circumstances. agriculture? occurring. In the first three years of
High demand for the program makes it PACE protects farmland, but the most Pennsylvania’s program, 75% of the ease-
easier for counties to negotiate less-than- important question is whether it preserves ment purchases were made in these coun-
market-value deals, known as “bargain farming in Pennsylvania, which is an im- ties. Now, with over forty other counties
sales,” but it may also increase farmer frus- plied goal of the program. There has always participating in the state program, funding
tration with the program. Lack of available been a concern that buying conservation is spread over more counties, so the percent
funding sometimes makes purchasing seri- easements would merely encourage farmers of purchases in these eight leading agricul-
ously threatened farms difficult. to leave farming. This does not seem to be the tural counties has dropped to only about 50%
The conservation easement program is case, however. We learned in both the 1994 of the total.
growing — it is expected to soon pass and 1998 surveys that, for the most part,
Maryland’s development rights purchase participating farmers were just as active in Future program needs
program that began in 1977— and will be- the farm after the sale as before. We also PACE deals with one farm at a time, not
come the nation’s leader for this type of found that easement sellers were putting an entire community, area, or industry. It
farmland preservation. Although PACE sale proceeds back into the farm operation to demands constant attention and refinement
containues to receive strong farmer, citizen, make them more viable. In both survey years if it is to achieve its purpose.
and political support, and is widely regarded the major (40% or more) uses of proceeds
as being highly successful, attention must be were quite consistent. After first taking care Program Funding
given to several critical policy issues of family financial planning, major uses of The backlog of farmers wanting to sell
proceeds went to reducing mortgage debt easements far exceeds the amount of money
Is the “best” farmland being bought? and operating loans, buying another farm or available to purchase easements. The com-
The PACE program is based on two funda- more land, machinery and so forth. Rather paratively slow pace of purchases (compared
mental premises. First, its primary interest than being a “buy-out,” conservation ease- to the number of interested sellers) creates
is in buying the best farmland in terms of soil ment sales appear to be a strengthening the possibility that farmer, local govern-
productivity. In this context, “best” can be force supporting agriculture. ment, and community enthusiasm and in-
determined objectively and scientifically, terest in the program will wane. Selling for
whereas other indicators are more subjec- Is a critical mass of farmland being pur- non-farm development provides immediate
tive. Second, since soil quality varies consid- chased to keep agriculture viable? financial gains.
erably throughout the Commonwealth, the Isolated preserved parcels of land sur- To have a strong program, a stable, grow-
“best” farmland is relative to each county in rounded by urban or suburban development ing, dedicated funding source is vital. Nei-
the program. This second premise is what do not sustain viable agriculture and do little ther current committed funds nor cigarette
allows PACE to be a statewide program. to maintain the Common-wealth’s farmland taxes may be enough, or provide sufficient
The base criteria for purchase established base. A sufficient number of farms must revenue growth, to be satisfactory in the long
in 1989 when the program began is still used, remain in a community to keep farm input run. Alternative revenue sources, or differ-
namely that 50% or more of the farmland suppliers, shippers, processors, and other ent funding approaches, must be looked to as
offered for sale must be in soil capability farm-related business services available to ways to keep purchases moving through the
classes I through IV and, further, that 50% farms in that vicinity. Clustering easements system at an accelerated pace. The urgency
or more of the land must be in cropland, has the potential to create the critical mass is to preserve as much farmland now, before
grazing, or pastureland. Several years ago, of farms necessary to keep such firms in development occurs and the cost of purchas-
the standard statewide dollar amount used business. The amount of protected land nec-
Cont. on page 7

OCTOBER 2000 AGRICULTURAL LAW UPDATE 3


District
District Courtr
Court rules
ules non-point sources arare included
e included in listing
impaired
of impaired wwaterw
aterwa
aterw ys,
a ys maximum
, calculation of total maxim daily
um dail y loads
By Anne Hazlett and Barclay R. Rogers
For some time, agriculture has been la- EPA identified “all” pollutants as suitable are nonpoint sources such as timber-har-
beled as the leading source of water qual- for inclusion in the TMDL process. 43 Fed. vest and agricultural runoff. Id. at 1338.
ity impairment in the nation’s rivers and Reg. 60662 (Dec. 28, 1978). A TMDL is Also joining their action were the
streams. EPA, Nonpoint Source Pollution defined in 7 C.F.R. § 130.3(i) as: “The sum Mendocino County Farm Bureau, the
Fact Sheet, (1999), at http:// www.epa.gov/ of the individual [waste load allocations] California Farm Bureau Federation, and
OWOW/NPS/facts/point1.htm. Neverthe- for point sources and [load allocation] for the American Farm Bureau Federation.
less, regulators at both the state and fed- nonpoint sources and natural back- Both parties filed motions for summary
eral levels have been operating under great ground.”1 In laymen’s terms, a TMDL is judgment. In their motion, the plaintiffs
uncertainty with respect to the limits of the total amount of a pollutant that may argued specifically that the Garcia River
the federal government’s authority to con- be discharged into a waterbody and have should not have been listed as impaired
trolling agricultural practices. A recent the water still maintain water quality because § 303(d) did not provide authority
decision by the Northern District of Cali- standards. Once this amount is deter- to list a waterbody where the water was
fornia in Pronsolino v. Marcus , 91 mined, the TMDL process contemplates polluted only by nonpoint sources and,
F.Supp.2d 1337 (N.D. Cal. 2000), may an allocation of this load to individual therefore, no TMDL should have been
provide some answers to these looming contributors. prepared. Id. at 1346. In contrast, EPA
questions. contended that it was entitled to judg-
In a case of first impression, Judge Wil- Guido and Betty Pronsolino ment as a matter of law because its inter-
liam Alsup determined that EPA has the Plaintiffs Guido and Betty Pronsolino pretation of § 303(d) was reasonable and
authority under § 303(d) to determine “to- own forested land on the Garcia River, therefore lawful under Chevron Inc. v.
tal maximum daily loads” (“TMDLs”) for which runs along the Northern California Natural Resources Defense Council, 467
rivers and waters that are polluted by coast in Mendocino County. 91 F.Supp.2d U.S. 387 (1984). Def.’s Reply Brief at 1. On
logging and agricultural runoff or other at 1338. They harvest timber from this March 30, 2000, the court granted sum-
nonpoint sources. Specifically, the court property. Id. When they applied for a per- mary judgment in favor of the agency.
held that pollution from nonpoint sources mit to harvest timber, the California De-
such as timber and farming operations is partment of Forestry (“CDF”) imposed sev- The court’s analysis
relevant in developing the substandard eral restrictions that were designed to In finding for the agency, the court first
waters list required by § 303(d) and that a reduce soil erosion into the Garcia.2 Id. analyzed the general question of whether
river or stream polluted only by such For example, the Pronsolinos were re- Congress intended the TMDL process to
sources could be listed and a TMDL subse- quired to leave certain large conifer trees include control of nonpoint sources of pol-
quently prepared. At present, this matter standing.3 Id. The Pronsolinos’ forester lution. Having determined that it did, the
is on appeal to the Ninth Circuit. If af- estimated that compliance with such re- court then addressed the more specific
firmed, the decision could have a far-reach- strictions would cost upwards of $750,000. issue of the extent to which states are to
ing impact on the federal government’s Id. at 1340. In light of this burden, the consider nonpoint sources in assembling
ability to control nonpoint source pollu- Pronsolinos sought to challenge these re- the § 303(d) list.
tion from agriculture and, hence, affect strictions. In so doing, they argued that
land management practices on the farm. CDF was imposing these restrictions to Whether the TMDL process includes
implement a TMDL set by EPA for the nonpoint sources
Statutory and regulatory Garcia River. Id. at 1338. The court found that Congress intended
background Since 1992, the Garcia River has been the TMDL process to include nonpoint
Section 303 of the Clean Water Act re- listed on California’s § 303(d) list as im- sources based on the language, structure,
quires each state to develop a “continuing paired for sediment. Id. at 1339. This im- and purpose of § 303(d) as enacted in the
planning process” to protect all waters pairment is significant because excessive 1972 legislation, now known, together with
within its boundaries, a process that is sedimentation has caused a reduction in its subsequent amendments, as the Clean
subject to EPA approval. 33 U.S.C. § the quality and amount of instream habi- Water Act. Before turning to § 303, the
1313(e). As a part of this process, states tat for cold-water fish such as coho salmon court first reviewed the history of events
must identify those waters within its and steelhead trout. Id. When the state that led up the enactment of the 1972
boundaries for which effluent limitations failed to develop a TMDL for the Garcia as statute. The court wrote that under the
on point sources are not stringent enough well as sixteen other North Coast waters, 1965 Water Quality Act, which preceded
to implement a particular water quality a group of fisherman and environmental the 1972 Act, the primary responsibility
standard. 33 U.S.C. § 1313(d)(1)(A). Each interests brought suit against EPA. Id. for control of water pollution rested with
state then has to establish a priority rank- That case ended in a consent decree in the states. 91 F.Supp.2d at 1340. The
ing of such waters that takes into account March of 1997 requiring that TMDLs be 1965 Act required each state to develop
the severity of the pollution and the wa- promulgated by the state, or by EPA if the comprehensive water quality standards
ters’ designated uses. Id. state failed to complete the TMDL, for all for interstate waters that stated a desir-
Once the prioritization is complete, the of these waterways. Id. California subse- able condition of the water. Id. at 1341.
states are required to calculate a TMDL quently missed the deadline for complet- Reasonable discharges were inherently
for each pollutant that the agency deems ing the TMDL, and EPA took over the permitted under these standards. Id. How-
suitable for such a calculation. 33 U.S.C. § process. Id. ever, in 1966, the Supreme Court held in
1313(d)(1)(C). After § 303(d) was enacted, When the Pronsolinos believed that CDF United States v. Standard Oil Co., 384
was putting restrictions on their timber U.S. 224 (1966), that under the Refuge Act
harvest permit in order to implement the of 1899, 30 Stat. 1152, all discharges of
Anne Hazlett is a graduate student in the TMDL established by EPA, they sued EPA foreign substances and pollutants were
Agricultural Law LL.M. program at the under the federal Administrative Proce- illegal without a permit. 91 F.Supp.2d at
University of Arkansas. dure Act, 5 U.S.C. § 701, contending that 1341. It was this conflict between the
Barclay R. Rogers is a graduate studentin the agency did not have the authority to absolute prohibition and reasonable dis-
the Agricultural Law LL.M. program at impose a TMDL on a waterbody like the charge approaches that led to the develop-
the University of Arkansas. Garcia where the only causes of pollution ment of the 1972 legislation. Id.

4 AGRICULTURAL LAW UPDATE OCTOBER 2000


In addition to the history of water pollu- ter quality standard applicable to such ning process” required by § 303(e). Id.
tion control prior to 1972, the court further waters. The State shall establish a pri- And, since the “continuing planning pro-
prefaced its examination of § 303 with a ority ranking for such waters, taking cess” was the nonpoint source “side of the
discussion regarding the comprehensive into account the severity of the pollu- equation,” the court concluded that TMDLs
nature of the legislation. There, the court tion and the uses to be made of such naturally fit within the generally accepted
began with the premise that the Supreme waters. approach to nonpoint source pollution con-
Court has consistently referred to the 1972 From this provision, the court concluded trol. Id. Additionally, the court noted that
Act as intended “to establish an all-en- that the structure of § 303(d) was as fol- TMDLs were required to be calculated at
compassing program of water pollution lows: The states were required to assess levels sufficient to “implement” water qual-
regulation” and “to establish a compre- the expected beneficial impact of the im- ity standards. Thus, nonpoint sources must
hensive long-range policy for the elimina- position of the best effluent reduction that be included in the TMDL process because
tion of water pollution.” Id. It then stated technology could supply. Id. If those re- “[i]t would seem impossible to [implement
that the 1972 Act envisioned a “partner- ductions alone would bring a water into water quality standards] without taking
ship” between the states and the federal compliance with the applicable water qual- any nonpoint sources into account.” Id.
government and that such an arrange- ity standards, then that was the end of the Second, the court found that the plain-
ment would be fueled by a shared objec- matter. Id. If not, however, then § 303(d)(1) tiffs’ interpretation was inconsistent with
tive “to restore and maintain the chemi- required the waterway to “join the list of the general structure and logic of § 303.
cal, physical and biological integrity of the unfinished business.” Id. That list had to Specifically, the court stated that § 303
Nation’s waters.” Id. (quoting Arkansas v. be prioritized by the states. Id. The states requires the state to set water quality
Oklahoma, 503 U.S. 91, 101 (1992)). To were then required under § 303(d)(1)(D) to standards for all navigable waters and §
carry out this partnership, the 1972 Act calculate a TMDL for each listed water. 303(d) requires the state to list all waters
created the National Pollution Discharge Id. Such calculations had to be included in for which effluent limitations would not
Elimination System (“NPDES”), which the state’s continuing planning process be sufficient to meet these standards. Id.
imposed effluent limitations on all point required by § 303(e). Id. at 1345. at 1347. It then explained that excluding
sources under a technology-based strat- Third, the court concluded that the pur- nonpoint sources from the listing process
egy. 91 F.Supp.2d at 1341. It also carried pose of § 303(d) was to serve as an “inter- would contradict this approach:
forward the preexisting regime of water- section” between the old water-quality Since all rivers and waters regardless of
quality standards and even extended that standards approach and the new technol- pollution sources were included in the
regime to all navigable waters in the ogy-based strategy, which was the main universe for which water-quality stan-
United States. Id. at 1341-42. innovation of the 1972 Act. Id. at 1343. dards were required, all of them–again
Taking this background, the court Given these factors, the court held that regardless of source of pollution–were
turned to an in-depth analysis of § 303 as TMDLs were required for “all listed rivers included in the universe for which list-
well as various other provisions in the and waters.” Id. at 1344. Stated differ- ing and TMDLs were required–save and
1972 Act that related to the control of ently, no river or water was immune from excluding only those for which effluent
nonpoint source pollution including § the process. limitations would be sufficient to achieve
102(a), § 104(n) and (p), § 201, § 208, § 304 compliance with standards [footnote
and § 305. Id. at 1342-46. With respect to Whether states are required to con- omitted].
§ 303, the court first stated that subsec- sider nonpoint sources in assembling Id.
tion (a) required the states to adopt water- the § 303(d) list Third, the court determined that the
quality standards and to carry forth those After considering the general construc- fact that § 303(d) lacked any specific refer-
already adopted. Id. at 1343. Under the tion of the 1972 Act relating to nonpoint ences to nonpoint sources was insignifi-
statute, standards were to be set for all source pollution, the court addressed the cant because such references would be
navigable waters including interstate and particular issue presented by the case: unnecessary in light of the comprehensive
intrastate waters. Id. Further, the court “the extent to which nonpoint sources of nature of the 1972 legislation. Id. In the
noted that the Supreme Court has said pollution were to count in assembling the court’s words, the “reason seems obvious.”
that water-quality standards were meant substandard-waters list required by Sec- Id. The court characterized the §303(d)
by Congress to be “comprehensive.” Id. tion 303(d) and in preparing the corre- list as a “list of unfinished business” that
(citing PUD No. 1 of Jefferson County v. sponding TMDLs.” Id. at 1346. On this would follow the implementation of the
Washington Dep’t of Ecology, 511 U.S. 700, point, the plaintiffs argued that the § 303(d) effluent limitation approach for point
704 (1994)). In reviewing subsection (a), list and corresponding TMDL process was sources. Id. It then stated that the exclu-
the court found it significant that in the limited under the language of the statute sion of nonpoint sources from the TMDL
process of setting standards Congress did to waters affected by point sources and did process would have left a “chasm in the
not exempt any rivers or waters. 91 not include waters impaired solely by otherwise ‘comprehensive’ statutory
F.Supp.2d at 1343. Nor did it draw any nonpoint sources. Id. Therefore, EPA’s scheme” and that doing so would have
distinction between point and nonpoint listing of the Garcia River was unlawful. “crippled” the continuing planning pro-
sources. Id. Rather, the standards-setting Id. cess under § 303(e). Id. The TMDL pro-
process of § 303 plainly applied to waters In addressing this argument, the court vided the necessary “intermediate step” in
polluted by point sources as well as first turned to the text of § 303(d)(1)(A). It that it produced “engineering data” that
nonpoint sources. Id. “The goal was to set then rejected the plaintiffs’ contention for the states could use to “allocate the bur-
standards for all navigable waterways in four primary reasons. First, the court rea- den of cleanup between point and nonpoint
America, balanced and tailored to accom- soned that the plaintiffs’ interpretation of contributions of the same pollutant.” Id.
modate the various needs of each, includ- the statute would render the listing provi- Fourth, the court concluded that case
ing, explicitly, the need for protection of sion inconsistent with the statutorily-de- law from the Ninth Circuit supports the
fish and wildlife.” Id. fined role of a TMDL. Id. While acknowl- inclusion of nonpoint sources in the listing
Second, the court set forth the language edging that the TMDL process could be process. Citing Trustees for Alaska v. En-
of § 303(d)(1)(A) which provided: used to address only point source contri- vironmental Protection Agency, 749 F.2d
Each state shall identify those waters butions, the court stated that it was not so 549 (9th Cir.1984), and Oregon Natural
within its boundaries for which the ef- limited by the statute. Id. Under the Resources Council v. United States Forest
fluent limitations required by Section statute, the expressly contemplated use of Service, 834 F.2d 842 (9th Cir.1987), the
301(b)(1)(A) and 301(b)(1)(B) are not a TMDL determination was its “incorpo- court considered Ninth Circuit precedent
stringent enough to implement any wa- ration” into each state’s “continuing plan- that distinguishes between point and
Continued on p. 6

OCTOBER 2000 AGRICULTURAL LAW UPDATE 5


TMDLS/Continued from page 5 through subsequent amendments. Id. Circuit caselaw that supports the view
nonpoint source control approaches In sum, the court held that § 303(d) that § 303(d)(1) does not apply to waters
within the Clean Water Act. 91 F.Supp.2d includes waterways that are impaired by impaired solely by nonpoint source pollu-
at 1348. It then turned to the Ninth nonpoint source pollution. More precisely, tion. Id. at 51-53 (citing Oregon Natural
Circuit’s decisions in Alaska Center for the the court concluded that rivers and streams Desert Ass’n v. Dombeck, 172 F.3d 1092
Environment v. Browner, 20 F.3d 981 (9th that are impaired solely by nonpoint (9th Cir. 1998); Natural Resources Defense
Cir.1994), and Dioxin/Organochlorine sources such as agricultural runoff could Council v. EPA, 915 F.2d 1314 (9th Cir.
Center v. Clarke , 57 F.3d 1517 (9th be listed on a state’s substandard waters 1990); Oregon Natural Resources Council
Cir.1995). The court interpreted these list and subsequently subjected to a TMDL v. USFS, 834 F.2d 842 (9th Cir. 1987)).
opinions as holding that waterbodies af- calculation. Accordingly, EPA’s listing of And, finally the plaintiffs contend that the
fected by nonpoint sources are included in the Garcia River in this case was not plain meaning of § 303(d)(1) comports with
the TMDL process. 91 F.Supp.2d at 1348- unlawful. the Clean Water Act’s comprehensive pur-
49. In so doing, it noted that while these pose. Id. at 55. They maintain that while
cases did not concern waters affected ex- Open questions Congress sought a comprehensive solu-
clusively by nonpoint sources, the Ninth The precise effect of Judge Alsup’s deci- tion in 1972 to water pollution problems,
Circuit has not indicated that this should sion on agricultural practices is uncertain it chose to use separate tools to address
affect the analysis. Id. for two reasons. First, as stated previ- different problems: federal control of point
After discussing the language of the ously, the plaintiffs have appealed the source pollution through the NPDES pro-
statute and caselaw relating to this ques- court’s decision to the Ninth Circuit. Sec- gram and state control of nonpoint source
tion, the court examined the legislative ond, while Judge Alsup clearly believes pollution through § 208 waste manage-
history of § 303(d). On this point, the that nonpoint source pollution is included ment plans and § 319 grants. Id. at 57.
plaintiffs argued that a House committee in the § 303(d) process, it remains unclear
report contained multiple references to what exactly EPA can force a state to do Federal regulation of land use
effluent limitations in the context of with a TMDL once it is calculated. practices
TMDLs and that, despite its reference to Even if the district court’s decision is
the significant contribution of nonpoint Appeal affirmed on appeal, perhaps an even more
source pollution to water quality prob- On September 25, 2000, the plaintiffs critical question remains: once a water is
lems, it did not indicate that nonpoint filed their opening brief with the Court of listed as impaired and the TMDL is calcu-
sources were to be included in the TMDL Appeals. While a discussion of the merits lated, what measures can EPA employ to
process. Id. at 1349-50 (quoting H.R.Rep. of the appeal is somewhat premature be- ensure that such allocations are in fact
No. 92-911, at 105-06 (1972)). Contrary to cause EPA has yet to respond to the plain- implemented? The impact of a TMDL will
the plaintiffs’ interpretation, the court tiffs’ contentions, the arguments are pre- be felt on the farm not through a water
stated that Congress’ discussion of sented to provide insight into the district quality calculation but by its actual imple-
nonpoint sources as a “major contribu- court’s decision. In their brief, the plain- mentation. Thus, arguably the key issue
tion” to water quality impairments indi- tiffs argue that the district court’s ruling is for agriculture in this debate is not limited
cated that Congress “recognize[d] that erroneous on several grounds. First, the to whether nonpoint source pollution is
mitigation of nonpoint-source pollution plaintiffs contend that the text and struc- included in the TMDL process. It encom-
would also be required to meet [water ture of the Clean Water Act demonstrate passes the additional question of the ex-
quality] standards.” 91 F.Supp.2d at 1350. that § 303(d)(1) does not apply to waters tent to which, if nonpoint sources are in-
Finally, the court addressed plaintiffs’ impaired solely by nonpoint sources. Pl.’s cluded, EPA can leverage the states into
argument that § 319, which was enacted App. Brief at 17. Specifically, they main- actually mandating the use of specific land
after § 303(d) and is expressly concerned tain that § 303(d)(1)(A) plainly states that use practices designed to achieve the
with the control of nonpoint source pollu- the listing process is applicable only to a TMDL calculation.
tion through statewide nonpoint source limited class of substandard waters, On this question, Judge Alsup took the
management plans, would have been su- namely those that are receiving discharges position that Congress did not authorize
perfluous if nonpoint sources were included controlled by effluent limitations. Id. at EPA to regulate state land use practices.
in § 303(d). While acknowledging that § 18-20, 23-34. In addition, Congress’ use of 91 F.Supp.2d at 1355. With the agency
319 and § 303(d) “covered some of the §§ 303(d)(3), 208 and 319 to control conceding this point, the court stated that
same general ground,” the court rejected nonpoint source pollution makes it clear unlike EPA’s authority to revise individual
the notion that the enactment of § 319 that § 303(d)(1) does not apply to rivers NPDES permits issued by states for point
evidences that Congress did not intend and streams where the exclusive source of sources, EPA has no authority to review
the § 303(d) process to apply to nonpoint impairment is nonpoint sources. Id. at 26. land-use restrictions placed on timber
sources for three reasons. Id. at 1352-53. Second, the plaintiffs assert that the harvest permits by CDF or other agricul-
First, although both § 303(d) and § legislative and administrative histories of tural practices that are permitted. Id. In
319(a)(1) require states to list waters fail- § 303(d)(1) confirm that neither Congress the court’s opinion, the role of a TMDL is
ing to meet water quality standards, the nor the agency intended this provision to to assist the states in gathering informa-
court concluded that, while these reports apply to waters impaired solely by tion by identifying the load necessary to
“may partially overlap,” they are not du- nonpoint sources. Id. at 34-50. The Con- implement the water-quality standards.
plicative lists. Id. at 1352. While nonpoint gressional reports and debates make no Id. In this capacity, a TMDL is limited to
source control may be found generally suggestion that § 303(d)(1) would apply to an engineering calculation. Id. On this
under § 319, TMDLs were an “important nonpoint sources and Congress has subse- point, Judge Alsup explained:
ingredient” for both the § 319 and § 303(e) quently amended the Clean Water Act Under the Act, California must ‘incor-
plans. Id. at 1353. Second, the court without indicating that TMDLs were to be porate’ the TMDL in its planning. Noth-
pointed out that–contrary to the plaintiffs used as a means of nonpoint source pollu- ing, however requires that the TMDL
assertions–the 1972 Act did contemplate tion control. Id. at 34-35, 39-40. Further, be uncritically and mechanically passed
nonpoint source control. Id. Thus, charac- EPA did not apply or seek to apply § through to every relevant parcel of land.
terizing § 319 as a first step towards 303(d)(1) to waterways impaired by California is free to select whatever, if
nonpoint source pollution control is inac- nonpoint source pollution for nearly two any, land-management practices it feels
curate. Id. Third, on previous occasions, decades after § 303 was enacted. Id. at 41. will achieve the load reductions called
the Ninth Circuit has rejected a similar Third, the plaintiffs argue that the hold- for by the TMDL. California is also free
attempt to infer congressional intent ing of the district court conflicts with Ninth to moderate or to modify the TMDL

6 AGRICULTURAL LAW UPDATE OCTOBER 2000


TMDLS/Continued from page 5 concessions that it lacks the authority to members Larry Mailliard and Bill Barr. 91 F.Supp.2d. at
reductions, or even refuse to implement regulate land use practices, an open ques- 1340. They estimate their compliance costs at
them, in light of countervailing state tion remains as to how far EPA can go $10,602,000 and $962,000 respectively. Id.
3
interests. Although such steps might through its new rules to force a state to The conditions required that the Pronsolinos: (a)
provoke EPA to withhold federal envi- actually implement a TMDL calculation inventory controllable sediment sources from all roads,
ronmental grant money, California is in its water quality planning process. Next landings,skidtrailsandagriculturalfacilitiesbyJune1,
free to run the risk. month, these authors will examine the 2002; (b) mitigate 90% of controllable sediment volume
Id. On one hand, this language may be new TMDL regulations. The article will at “road related” inventoried sites by June 1, 2012; (c)
heralded as a victory for proponents of focus specifically on EPA’s ability to influ- prevent sediment loading caused by road construction;
state control over land use decisions. On ence certain land management practices (d) retain five conifer trees greater than 32 inches in
within agriculture. diameteratbreastheight(“dbh”)per100feetofallClass
the other hand, however, this discussion
IandClassIIwatercourses(ifthesitelacksenoughtrees
is arguably dicta in that the central argu-
1
Under the new TMDL regulations which were not in to comply, the five largest trees per 100 feet must be
ment before the court was whether the
effect at the time Pronsolino was decided, a TMDL is retained); (e) harvest only during dry, rainless periods
listing of the Garcia River was unlawful, betweenMay1andOctober15;(f)refrainfromconstruct-
not whether EPA was forcing CDF to defined as a “written quantitative plan and analysis for
attaining and maintaining water quality standards in all ingorusingskidtrailsonslopesgreaterthan40%within
implement the calculation through the 200feetofawatercourse;and(g)forbearremovingtrees
Pronsolinos’ harvest permit. seasonsforaspecificwaterbodyandpollutant.” 65Fed.
Reg. 43662 (July 13, 2000). from certain unstable areas which have a potential to
Since the district court’s decision, EPA 2 deliver sediment to a watercourse. Id. at1338,n.2.
has amended the TMDL regulations. CDF imposed similar requirements on land use
Notwithstanding the agency’s previous permits obtained by Mendocino County Farm Bureau

PENNSYLVANIA/Continued from page 3 IPA has several potential advantages for must aggressively deal with protecting this
the funds to purchase a conservation ease- the program. For the same amount of annual region. To merely amass large quantities of
ment are committed at the time of purchase; authorized funding, the amount of farmland eased farm acres, but not protect the valu-
the full dollar amount of the easement is that could be eased would be greatly in- able farm region in southeastern Pennsylva-
encumbered up-front. Once a county’s an- creased. The long-term income stream po- nia, will be an empty victory.
nual allocation is committed, it must wait for tential may help attract younger farmers to To some extent the state formula for dis-
the next funding cycle to buy more ease- PACE. Paying for easements over time, in- tributing program funds addresses this need
ments. The longer interested farmers must stead of up front, should make limited pro- since it uses, in part, real estate activity as a
wait for PACE, the greater the likelihood gram dollars go farther and reduce the frus- factor. Even so, consideration should be given
they will accept alternative opportunities to tration of farmers who must wait their turn to strengthening the targeting of funds to the
sell. to sell easements. How farmers will accept Commonwealth’s most vulnerable farm-
One way limited funds have been stretched this new arrangement is unclear, but county lands.
is by placing a cap on the per- acre maximum program scoring could be adjusted to reward
dollar amount of an easement. This is insti- farmers who take advantage of it. The agricultural industry
tuted at the state level, and many counties PACE protects the land from develop-
have followed suit by instituting their own, Protecting eased farmland ment but does nothing to help the farm
usually lower, caps. In order for farmers to Even though farm easements are pur- business itself survive. More direct attention
participate in the program and sell their chased, the value of the easements can be to the participating farm operations them-
easements, a relatively high percentage of destroyed if they are not protected from selves is important in the long run, if only to
recent sales are so-called “bargain sales;” nearby non-farm development. Neighboring insure that the farms themselves remain
that is, the seller accepted less than 100% of eased farmland is desired by residential economically viable. Some suggest directly
the easement value. Some of this loss may be development because it provides permanent linking program participation with farm
returned to farmers in the form of a tax open space and buffering to homes. The management assistance as a way of helping
benefit. citizens of the Commonwealth create this farm operations on the preserved land stay
Another way of stretching limited funds amenity through their tax dollars, but homes in business. Protected land must be part of
will soon be possible. In 1999, Act 15 autho- that benefit from it may, at some time, begin an integrated approach to farm and farm-
rized long term installment purchase agree- complaining about farm noises, odors, and land preservation, complemented by other
ments (IPA) as an alternative payoff method traffic, thereby causing distress and incon- business assistance and preservation
to acquiring conservation easements. Long venience to farming operations. In extreme techniques.Purchase of conservation ease-
term installment purchases can “leverage” situations farms may be forced to cease op- ments must be part of a balanced, compre-
annual program funds by deferring the prin- erations, thereby defeating the purpose of hensive program of preservation, not a stand
cipal payout until the end of the contract purchasing the farm easements. alone program. Other preservation tech-
period. During the installment contract pe- Effective agricultural zoning should be an niques, such as zoning and agricultural se-
riod the seller would receive an annual in- important part of an overall agricultural curity areas, complement PACE by helping
come stream, and taxes on the outstanding land preservation program. Such zoning farms remain viable.
principal are deferred. The IPA contract helps protect the public investment when
could be sold or liquidated before the end of easements are purchased. However, zoning Though Pennsylvania’s program has been
the term, and it could be transferred to heirs. is not a required program element at the active since 1989, it is an evolving one. Sig-
In effect, such long term installment con- state level, and effective agricultural zoning nificant refinements, particularly in evalu-
tracts may net the seller more than a cash is not in place in most localities. Protecting ating eligible farm parcels, have been made
sale. the public’s investment through effective since the program’s inception. The scale of
This financing method uses general obli- agricultural zoning should be a state and participation and the speed at which the
gation bonds, which are relatively inexpen- county requirement for participation in the program is operating is beyond the expecta-
sive to purchase at the time of easement sale easement purchase program. tions of the originators of PACE. While by
and cost a fraction of the face value of the most measures PACE can be judged a suc-
easement. The easement seller receives an- Concentrating purchases cess, it is still too early to tell whether the
nual interest payments, and then gets a The Commonwealth’s most valuable farm- land saved in Pennsylvania will translate
lump sum when the bond matures. Basi- land is in the southeast and south central into preserving agriculture in the Common-
cally, IPA shifts the financing burden from regions, which is the area most severely wealth.
the “front end,” when the sale is made, to the threatened by urban development. For the — Timothy W. Kelsey and Stanford M.
lifetime of the installment contract. PACE program to really be successful, it Lembeck, The Pennsylvania State Univ.

OCTOBER 2000 AGRICULTURAL LAW UPDATE 7


Distinguished Service A w ar
Service d
ard
“The AALA has honored me greatly by giving me the Distinguished Service Award for the year 2000. Each
member of the AALA has honored my immensely by their friendship and their caring about agricultural law.
I am grateful to the AALA and its members for the Award and for allowing me to participate so fully and
joyfully in agricultural law.
—Drew L. Kershen, Earl Sneed Centennial Professor of Law, University of Oklahoma College of Law,
Norman, Oklahoma

8 AGRICULTURAL LAW UPDATE OCTOBER 2000

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