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VOLUME 24, NUMBER 11, WHOLE NUMBER 288 NOVEMBER 2007

Synthetic materials and organic foods
Arthur Harvey, an organic blueberry grower and USDA certified organic product inspector,
filed a civil action pro se on October 23, 2002 against then Secretary of Agriculture Ann
Veneman, alleging certain regulatory rules violated the Organic Food Production Act of
1990 (OFPA), 7 U.S.C §§ 6501-6522.
In Harvey v. Veneman (Harvey I)1, petitioner listed nine federal rulings that undermined the
integrity of the OFPA and questioned the validity of the procedures the Secretary used to
implement such rules.

INSIDE Responding to the court’s rulings in Harvey I, Congress immediately revised the Secretary’s
duty to enter notice and comment rulemaking and passed amendments to the OFPA in 2005,
which Harvey then appealed in Harvey v. Johanns (Harvey II)2 in 2006,with the final ruling
being entered July 24, 2007.

Background to the OFPA
Recognizing the growing popular demand for organic products, Congress enacted the
• Wind farms: windfall OFPA to form a coherent system of standards to manage the processing, handling, labeling,
or wipeout? and marketing of organic products. The act would also promote interstate commerce in fresh
and processed organic products. Finally, the act would establish a certification program for
• Federal roundup both producers and handlers of such organic products.
Furthermore, the OFPA establishes a National List of synthetic ingredients that may be
added to organic food at any point during the product’s life stage and still allow the product
• State roundup to be produced, labeled, marketed, and sold as an organic product. The National List consists
of five non-organic ingredients that may be used in agricultural products to be labeled and
marketed as organic products whether or not the ingredient may be obtained in organic
form, including, cornstarch, gums-water extracted only (arabic, guar, locust bean, carob
bean), kelp (if used only for a dietary supplement or thickener), Lecithin-unbleached, and
high-methoxy pectin. 3
According to the OFPA, in order for a product to be considered “organic”, the product
must not contain any synthetic chemicals, except those provided for by the National List or
those approved by the Secretary based on guidelines within the act, yet not contained within
the National List. With the exception for livestock, the product may also not be treated with
any prohibited materials or synthetic chemicals for three years prior to the harvest of the
product, and must be produced and handled in accordance with an organic plan originating
with the producer and handler, approved by a certifying agent.4
Solicitation of articles: All AALA In order for a product to be labeled “100% organic”, it must be a raw or processed product
members are invited to submit ar- that contains one hundred percent organically produced ingredients by total weight,
ticles to the Update. Please include excluding water and salt.5
copies of decisions and legislation To be labeled and marketed as an “organic” product, the product must not have any
with the article. To avoid duplica- synthetic ingredients unless otherwise provided for on the National List, added in the
processing or post-harvest life stage of the product. The producer also may not add any
tion of effort, please notify the Editor
ingredients that are not organically produced, unless on the National List, and not contain
of your proposed article.
more than five percent of the total weight of the finished product, not including water and
salt.6
For a product to the bear the label “made with organic (specific products or food groups)”,
the product may contain seventy to ninety-five percent of its total weight in organically
produced ingredients excluding water and salt.
IN FUTURE ISSUES: However, in §6510, the act gives the Secretary discretion to allow the word “organic” to
be used on the main display panel of products containing at least fifty percent of the
• Land application product’s total weight excluding water and salt if also approved by the National Organic
of biosolids Standards Board and the Secretary of Health and Human Services. Products containing less
than fifty percent their total weight of organic ingredients by weight may also use the word
“organic” if approved by the NOSB and the Secretary of Health and Human Services, but
only on the ingredient list on the label panel.
The main contention within Harvey I and II lies in the use of synthetic ingredients or
processing aids, outside those allowed by the National List, within the final processing and
handling of the organic food products. The secondary issue is the rotation of previously non-
organic crops and livestock onto an organic regimen and whether they may be rotated into
Cont. on page 2

NOVEMBER 2007 AGRICULTURAL LAW UPDATE 1
ORGANIC FOODS/ CONTINUED FROM PAGE 1

and out of organic standards, while main- 7 C.F.R §205.236. This regulation allows a percent organic products to bear both the
taining their organic integrity. one-time exception for conversion of an en- USDA certified seal and private certifier seal,
tire dairy cow herd to organic production which could mislead consumers. The circuit
Harvey I - nine counts with 7 U.S.C §6509, which provides express court, however, agreed with the district court
Filed in October 23, 2002, Harvey I con- instructions on how to convert and certify a that because of the limitations placed on the
tained nine counts alleging violations of the dairy herd for organic production. Further- use of the USDA organic seal and the silence
OFPA by regulatory rulings made by Secre- more, he asserts the exception was promul- of the act as to certification of products,
tary Veneman. Harvey I began with a magis- gated in the 1997 proposed rule, but was Congress intended to give deference and
trate hearing to recommend courses of action removed and unavailable for comment dur- discretion to the Secretary.11
in regards to cross motions for summary ing the notice and comment period in 2000. Count three addresses the regulations
judgment. Regulatory rulings made through The exception then reappeared in the final pertaining to nonagricultural, non-organic
informal rulemaking are afforded Chevron rule issued without public commentary. The substances used as processing aids. Section
deference and are thus only reviewed under Secretary argued that the OFPA is at best 205.605 lists thirty-six substances that may
the arbitrary and capricious standard, and ambiguous as to the feeding of cows being be used as processing aids in “organic” and
may be set aside only if they are found to be converted to organic production within the “made with organic” products. Harvey con-
not rational or not based on a consideration year time frame allowed by the statute. While tends that this list violates the core values of
of relevant factors.7 the magistrate does not wholeheartedly ac- the OFPA, which prohibits the use of syn-
Before the counts may be discussed, the cept Secretary Veneman’s justification, be- thetic ingredients unless otherwise provided
issue of Arthur Harvey’s standing must be cause Harvey’s explanation of how the pro- by the act to be used in the processing or post-
addressed. The magistrate determined cedures were violated was inadequate and harvesting handling of the product. While
Harvey had standing, because he showed his only injury was based on his claim as a the Secretary agreed with Harvey in that
certain injury would occur as an organic milk consumer, he was denied standing to there is a “general prohibition” on synthetic
consumer actively involved in the formal assert that particular claim. 8 additives, the OFPA admits exemptions, such
rulemaking process, an organic grower, and As to the other eight claims, the magistrate as those included on the National List. The
a USDA certified inspector, with one excep- ruled in favor of the secretary in all but count circuit court minced few words in their con-
tion. nine of the complaint. Harvey appealed the clusion that the regulation addressed in
The magistrate denied standing as to count magistrate’s decision to the district court in a Count III is clearly contrary to the OFPA and
seven, which challenged the compatibility of timely fashion. The district court reversed that the Secretary has exceeded his author-
the magistrate’s decision with respect to count ity.12
nine to rule in favor of the Secretary. Harvey Count five asserts that the 7 C.F.R. §205.101
then appealed seven of the nine original exclusion of wholesalers and distributors
counts to the First Circuit Court of Appeals, breaches the application to handlers and
which entered its final decision in January those included in the handling process. The
2005. First Circuit interpreted the statute to in-
The First Circuit immediately reversed clude only sealed package products and their
VOL. 24, NO. 11 WHOLE NO. 288 NOVEMBER 2007
the magistrate’s opinion on Harvey’s stand- handlers, thus demonstrating Congress’
AALA Editor..........................Linda Grim McCormick
ing to challenge the conversion of a dairy knowledge of their exclusion of final retail-
2816 C.R. 163, Alvin, TX 77511
herd to organic milk production. The court ers without exempting wholesalers and han-
Phone: (281) 388-0155
E-mail: lindamccormick@gotsky.com relied on Harvey’s assertion that not only is dlers from the act. Thus the court affirmed
he a milk consumer but his commercial deal- the district court’s grant of summary judg-
Contributing Editors: Amanda M. Thomas, University of
ings with organic dairies more than satisfies ment and defers to the reasonable interpre-
Arkansas; L. Leon Geyer, Virginia Tech; Jesse J. Richardson,
Virginia Tech; Sara Breakiron, Virginia Tech; Robert P. the zone of interests requirements and his tation of the Secretary.13
Achenbach, Eugene, OR.
interests are not so marginally related to the Count six challenged 7 C.F.R §205.501,
For AALA membership information, contact Robert statute that it cannot be reasonably assumed which proscribes certifiers and inspectors
Achenbach, Executive Director, AALA, P.O. 835,
Congress did not permit the suit.9 from giving advice or acting as a consultant
Brownsville, OR 97327; Phone 541-466-5444; Fax 541-466-
3311; E-mail RobertA@aglaw-assn.org. Count one focuses particular attention on for farmers wishing to overcome the ob-
non-organically produced agricultural prod- stacles for organic certification. The court
Agricultural Law Update is published by the American
ucts that may be used in “organic” and foresaw a conflict of interest on the certifying
Agricultural Law Association, Publication office: County
Line Printing, Inc. 6292 NE 14th Street, Des Moines, IA “made with organic” products when a certi- inspector’s behalf of providing beneficial,
50313. All rights reserved. First class postage paid at Des
fied inspector deems the product to be com- yet incorrect advice, to producers regarding
Moines, IA 50313.
mercially unavailable in organic form. the act. Noting the silence within the statute,
This publication is designed to provide accurate and
Harvey asked the court to delete this lan- the court must defer to a reasonable interpre-
authoritative information in regard to the subject matter
covered. It is sold with the understanding that the publisher guage as it considerably undermines the tation by the Secretary. In response to the
is not engaged in rendering legal, accounting, or other purpose of the National List. The Secretary deference given, Harvey asserted that the
professional service. If legal advice or other expert
maintained that §205.606 allows only the Secretary’s reasonable interpretation would
assistance is required, the services of a competent
professional should be sought. five products listed above to be included as be in violation of his Constitutional right to
ingredients in “organic” and “made with free speech as a USDA-certified inspector.
Views expressed herein are those of the individual
authors and should not be interpreted as statements of organic” products when not available com- The court reasoned that the government has
policy by the American Agricultural Law Association.
mercially in organic form. As the magistrate not created a program that would aid private
Letters and editorial contributions are welcome and and the district court failed to clarify that speech, but merely regulate governmental
should be directed to Linda Grim McCormick, Editor, 2816 §205.606 does not establish a blanket exemp- messages. Accordingly, the court found that
C.R. 163, Alvin, TX 77511, 281-388-0155.
tion, the First Circuit remanded for a de- the limitation placed is a reasonable inter-
Copyright 2007 by American Agricultural Law claratory judgment to that end.10 pretation by the Secretary and affirmed the
Association. No part of this newsletter may be reproduced
Count two pointed out the ambiguity decision of the district court.14
or transmitted in any form or by any means, electronic or
mechanical, including photocopying, recording, or by any within the OFPA regarding the use of a Count seven, as mentioned before, targets
information storage or retrieval system, without permission
private certifier’s seal on ninety-five percent the conversion of dairy herds to organic milk
in writing from the publisher.
organic products which may not be labeled production. Under §7 C.F.R. §205.236, dairy
with the USDA organic seal. Harvey’s dis- herds are required to be fed organic grain for
pute resides in the language of the act as it only three months before the milk may be
now reads that would allow for ninety-five Cont. on page 3

2 AGRICULTURAL LAW UPDATE NOVEMBER 2007
Cont. on page 7

considered organic. Meanwhile, the statute the processing of organic food products. the First Circuit agrees with the district court’s
dictates two levels of feeding over the course In his motion to enforce the consent de- reasoning that Congress made no distinction
of a year before the product may be deemed cree, Harvey contends that although Con- as the word “ingredient” was there in the
organically produced, directly conflicting gress permits the use of synthetic ingredi- original text of the amendment.
with the ruling. The court viewed the ruling ents used in handling, the provisions of the The First Circuit stresses, however that
as the Secretary’s attempt at creating an ex- OFPA do not permit the use of synthetics as due to the timing and the measures taken by
ception and promptly thwarted the processing aids, as the OFPA defines ingre- Congress, their intent was to salvage the
Secretary’s attempt, thereby granting sum- dients and processing aids separately. invalidated regulations; thus the 2005 amend-
mary judgment in favor of Harvey, invali- Harvey asserts that Congress used the word ments do supersede the consent decree and
dating the regulation.15 “ingredient” intentionally, and thereby, did the district court did not abuse its discretion
Count eight focuses on the prohibition of not mean to include synthetic processing in denying Harvey’s motion. 22
certifiers requiring more stringent practices aids into the amendments.17 When taking into account the scope of the
than those contained in the OFPA. As a The court rejects this argument based on final judgment with regards to the policy
result, the higher standard amounted to an the mere fact that the word ingredient was in statement, the court refused to look beyond
unconstitutional regulation of commercial the original bill and not a new word added the four corners of the judgment to include
speech. The court views the prohibition not by the amendment. District Judge Hornby the policy statement within the confines of
as a frustration of the purposes of the OFPA disagrees with Harvey and states that the the consent decree. However, the court al-
but rather upholds Congress’ intention for it amendment to 6510 merely clarifies that the luded to the fact that the Policy Statement
to be a dependable national standard and use of synthetic ingredients appearing on most likely came from the discovery and
grants summary judgment in favor of the the National List is no longer prohibited in briefing work done for this case and may
Secretary. The court does not entertain the the handling process. Thus synthetic ingre- very well be in breach of the OFPA, requiring
constitutional argument as Harvey did not dients and processing aids may now be used further litigation.
raise it before this appeal.16 in handling operations, such as, packaging,
In conclusion, the First Circuit upheld the as long as they appear on the National List.18 Lessons learned
district court’s decision to grant summary In the second count of his appeal, Harvey When taking into account Harvey I and II,
judgment for counts two, five, six and eight claims a 2002 Policy Statement issued by the it is clear that Congress and by extension the
in favor of the Secretary. The first count is USDA violated the judgment of Harvey I. The Secretary of Agriculture intends to permit
remanded to the district court for a declara- Policy Statement allowed “food contact sub- synthetic substances on or, for all intents and
tory judgment clarifying the interpretation stances” to be utilized in organic foods re- purposes, off the National List to be used in
of the regulation consistent with the appel- gardless of whether they are reviewed or on the processing and handling. It is also self-
late court’s findings. Finally with regard to the National List, consequently invalidating evident Congress intended the Secretary of
the third and seventh count of the complaint, the consent decree prohibiting use of syn- Agriculture to have broad sweeping powers
the court reverses the district court’s grant of thetic processing aids.19 to propose and promulgate rules which
summary judgment in favor of the secretary The district court again ruled against would further the purpose of having a cohe-
and remands for judgment in Harvey’s fa- Harvey, refusing to pass judgment on sive national organic standards.
vor. whether the 2002 Policy Statement violated The largest lesson learned is the most trans-
the Harvey I judgment as it reasoned it was parent and possibly the hardest to swallow.
Congressional response outside the scope of the consent decree. How- Although Mr. Harvey won some of the small
In light of the consent decree issued in ever, the district court went so far as to enter battles with the aid of the First Circuit, he is
Harvey v. Veneman, Congress swung into a new judgment for the Secretary, mitigating no farther along in the war against synthetic
action, passing an amendment to the OFPA any further accountability he should have materials in organic foods than when he
that alleviated any responsibility the Secre- under the Harvey I consent decree.20 started.
tary had to comply with the decision of Harvey Harvey appealed the district court’s rul- —Amanda M. Thomas, Graduate Assistant,
I. The 2006 Agricultural Appropriations bill ing to the First Circuit where the questions University of Arkansas School of Law
adds language to 7 C.F.R. 6501, et seq. with- before the court became: were the two regu- Graduate Program in Agricultural Law
out notice and comment rulemaking. lations that were struck down in Harvey I
The first change Congress made was to reclaimed by the 2005 Amendments and
clarify the prohibition on synthetic ingredi- what was the scope of the final judgment 1
2003 WL 22327171 (D.Me., 2003).
ents to forbid the addition of “any synthetic issued in Harvey I.
2
Harvey v. Johanns, 494 F.3d 237 (Maine 2007).
ingredient not appearing on the national list The First Circuit used a split review to
3
7 C.F.R. §205.606.
during processing or post-harvest handling decide these issues. As to whether the con-
4
7 C.F.R. §6504.
of the product.” 7 C.F.R. §6510. gressional amendments reclaimed the regu- 5 7 C.F.R §205.301(a).
Congress next changed the title of §6517 to lations invalidated by the consent decree, the
6
7 C.F.R §205.301(b).
7
Motor Vehicles Mfrs. Assoc. v. State Farm Mut., 463
exempt synthetic substances not listed on the court looked for an abuse of discretion, while
U.S. 29, 42-43 (1983).
National List from the above prohibition determining whether the statutes were un- 8
2003 WL 22327171 (D.Me.) at *20.
when added during “organic production and clear. If they were found to be unclear, the 9
Clarke v. Sec. Indus. Ass’n, 479 U.S. 388(1987).
handling operations”. court must follow the Chevron doctrine giv- 10
2003 WL 22327171 (D.Me., 2003), at *6.
The final and most drastic change was to ing deference to the Secretary’s reasonable 11
Id. at *10.
eliminate 6517(c)(1)(B)(iii) completely, which interpretation. In regards to the scope of the 12
Id. at *8.
limited non-organic substances used in han- final judgment, the court reviewed that issue 13
Id. at *13.
dling to be added to non-synthetic ingredi- de novo.21 14
Id. at *16.
ents. Not surprisingly, this is the language The First Circuit focused on the impact of 15
Id. at *17.
relied upon by the First Circuit to strike the amendments made by Congress in 2005. 16
Id. at *22.
down the regulations. The court noted that the addition to include 17
462 F.Supp.2d 69 (Maine 2006).
synthetics in handling processes and delet- 18
Id.
Harvey II- the challenge ing the language relied upon by the First 19
Id.
Upon learning of Congress’ changes, Circuit’s decision in Harvey I were to remedy 20
2006 WL 3392617 (D.Me., 2006).
Arthur Harvey filed a motion in June 2006 to any action further required by the Secretary.
21
494 F.3d 237, 240.
enforce the portion of the consent decree that With regard to the ingredient vs. processing
22
Id. at 242.
prohibited the use of synthetic substances in aid distinction argued in motion to enforce,

NOVEMBER 2007 AGRICULTURAL LAW UPDATE 3
Wind farms: windfall or wipeout?
farms” is being promoted as a source of lower the cost of production. A five-fold
By L. Leon Geyer, Jesse J. Richardson, and income for landowners (farmers), tax rev- increase in rotor diameter (from 10 meters
Sara Breakiron enue for local government and schools, a on a 25 kW turbine built in the 1980s to 50
solution to the energy crisis, a growth busi- meters on a 750 kW turbine common today)
This paper examines the benefits offered ness, and an environmentally sound method yields a 55-fold increase in yearly electric-
and problems posed by commercial wind of electric generation. This paper discusses ity output (Ibid).
farms. The paper concludes that wind will the advantages and disadvantages of wind
continue to play an important role in the energy and assesses the future role of wind Economies of scale
world energy puzzle. power. Will subsidy, Not In My Back Yard Economies of scale can significantly im-
Windmills have long dotted the agricul- (NIMBY) forces, offshore development, or pact the cost of generating electricity from
tural landscape, with the roots of wind the rush of the wind determine the future wind. If a 3MW wind farm and a 51 MW
energy originating in Persia in 500-900 AD, adoption of wind power? wind farm both receive winds of 18 mph,
where the first windmills were developed the cost of energy (COE) will differ signifi-
to pump water and grind grain (Energy The economics of wind cantly at each farm. The COE at the 3MW
Information Administration). The transi- Subsidies farm will be $0.059 kWh, $0.023 greater
tion from small-scale windmills pumping Several factors, including cost reductions than the $0.036 kWh cost at the 51 MW
water on farms to industrial windmills used and progressive government policies farm, a 40% difference (American Wind
to generate electricity did not start until the (Windustry), cheaper and more efficient Energy Association, Economics). Larger
early 1970’s. turbines, and positive environmental at- projects can spread transaction costs as well
Since its modest beginnings, wind power tributes (Aftandilian), have spurred the as operations and maintenance costs per
has become the fastest growing energy in- growth of the wind energy industry. How- kilowatt-hour because of the efficiencies of
dustry in the world. “…[W]orld wind power ever, as an infant industry, subsidies are managing a larger wind farm, thus making
use has multiplied nearly fourfold over the needed in order for wind energy to com- the electricity less expensive to produce.
last five years, a growth rate matched only pete with fossil fuels, especially consider- Although economies of scale exist for
by the computer industry” (Browna). In ing the subsidies received by fossil fuel individual projects, these economies of scale
1999, there were 3,900 megawatts (MW) of industries.1 In addition, wind energy re- fail to exist for the United States or world
installed capacity worldwide (Windustry), ceives little of the subsidies designated for markets as a whole. The size of the United
which grew to approximately 47,000 MW alternative energies.2 States turbine market may not be adequate
by mid-2005 (Global Wind Energy Coun- A 1996 study, Energy Technology Status to support domestic innovations in manu-
cil). This 47,000 MW is enough power to Report, by the California Energy Commis- facturing and processes that would result
provide electricity to “…19 million average sion showed that wind power is cost com- in reduced wind turbine manufacturing
European households, or 47 million people” petitive with fossil fuels in the United States, costs (Chapman and Wiese). Although the
(British Wind Energy Association). Since especially when subsidized. The levelized United States market cannot currently take
the industry has been growing rapidly, the cost3 of electricity from coal ranges from 4.8 advantage of economies of scale, mass pro-
European Wind Energy Association to 5.5 cents per kilowatt-hour (kWh), natu- duction of turbines promises savings of 1-2
(EWEA) revised 2010 projections of 40,000 ral gas costs 3.9 to 4.4 cents/kWh, and nuclear cents per kilowatt hour (Brownc).
megawatts to 60,000 megawatts (Brownb). power runs 11.1 to 14.5 cents/kWh (Ameri-
Although Europe is moving quickly to can Wind Energy Association, Compara- Advantages of wind power
“harvest” the wind, many countries have tive Costs). Wind energy incurs costs rang- Royalties to landowners
yet to enter this phase. A country first needs ing from 3.3 to 5.3 cents/kWh with the Advocates argue that wind power rein-
to develop about 100 megawatts before wind production tax credit (available in the United vigorates rural economies by diversifying
development will accelerate. “As of early States at that time), and 4.0 to 6.0 cents/kWh them. Money is added to tax base and more
2002, some 16 countries, containing half the without the production tax credit (Ibid). income is provided to farmers. “Each 100
world’s people, have entered the fast- Even though wind remains more expen- megawatts of wind development in south-
growth phase” (Brownb). The increasing sive than coal or natural gas, some believe west Minnesota has generated about $1
number of countries entering this fast that if more wind farms are created, costs million per year in property tax revenue
growth phase proves important because as will continue to drop. and about $250,000 per year in direct lease
the industry continues to grow, prices of payments to landowners” (Parsons). This
generating wind will continue to fall. This Falling costs new source of income is also welcomed by
effect is shown by the world wind energy The cost of constructing a wind farm has ranchers in west Texas since royalties from
capacity doubling every three years be- fallen dramatically over the past two de- oil wells are declining (Id.). “As one Iowa
tween 1990 and 2002. With every doubling, cades, from more than $6,000 per kWh in farmer described a wind turbine, ‘It’s like
prices fell by 15% (Embrace Wind). Much of the early 1980’s to $1,000 per kWh (World having an oil well in the sky.” (Aftandilian).
this growth is due to a growing manufac- Link, Risk History). Drivers of lower cost Payments to farmers or landowners are
turing sector, innovative policies, and tech- include government subsidies, government generally at 2-4% of annual gross revenue
nological advancements. policy, declining cost, and green power per turbine, depending on the output of
Today, wind power in the form of “wind market incentives. Green market incentives turbines (Haley). Farmers generally gross
spur electric utilities to diversify their mix $2,000 to $4,000 a year for each turbine
of power (World Link, Global Wind En- (Brownd). These revenues substantially ex-
L. Leon Geyer, J.D., Ph.D., is a Professor of ergy). These factors proved instrumental in ceed revenues from most crops or livestock.
Agricultural and Environmental Law, Vir- making the cost of building a wind farm,
ginia Tech. Jesse J. Richardson, Jr., J.D., is an and the cost of producing energy from wind, Job creation
Associate Professor and Program Chair in Ur- decrease by 84% in the last 20 years (The Wind farms also hold promise to invigo-
ban Affairs and Planning at Virginia Tech. Sara Pennsylvania State University). rate rural economies through job creation.
Breakiron was an undergraduate research assis- Turbine design also significantly impacts “A New York State Energy Office study
tant at Virginia Tech and is presently a gradu- the cost of wind power. Since taller turbines recently found that, for identical amounts
ate student at the University of Minnesota. can sweep a larger area and therefore pro- of electricity produced, wind energy gener-
duce more electricity, use of these turbines ates 27 percent more jobs than a coal plant

4 AGRICULTURAL LAW UPDATE NOVEMBER 2007
and 66 percent more jobs than a natural gas cause acid rain, and contributes to global trolling noise emissions from wind turbines.
plant. Wind projects create employment warming. Natural gas is cleaner, but still Careful attention to these details makes
opportunities in construction, operation, emits pollutants and contributes to global achieving the goal of 45 decibels at a resi-
and maintenance and manufacturing” (Na- warming. Nuclear power produces few dence, which is comparable to street traffic
tional Wind Coordinating Committee). emissions, but leaves spent fuel rods, which or room conversations, relatively easy to
Meteorologists, surveyors, structural engi- can remain radioactive for hundreds of achieve (Hansen). Most towers must be
neers, assembly workers, and mechanics years. In contrast, wind provides clean and located 1350 meters from residences in or-
all benefit from developing wind farms. In renewable energy (Id.). “On a ‘life-cycle’ der to minimize noise (Id.). Distance pro-
1998-1999, 240 megawatts of wind capacity cost basis, wind ranks as one of the leading vides the only means to minimize constant
installed in Iowa produced 200 six-month competitors for fossil fuels” (Elquist). A and low swooshing sounds emitted from
long construction jobs and 40 permanent wind turbine only takes a few months, on wind turbines (Darvill).
operations jobs (Windustry, Why Wind average, to recover the energy that was
Energy?). In addition to the jobs that come used to create it” (The Pennsylvania State Grid system requirements
with building a wind farm, manufacturing University). A Danish study conducted by The weak grid system in the U.S. pre-
jobs are also increasing. LM Glasfiber, a the Ministry of the Environment “…esti- sents a major barrier to the development of
Danish wind turbine blade manufacturer, mated that a coal-fired power plant emits wind farms. Since most rural distribution
opened a factory in 1999 in Grand Forks, 360 times more Sox, NOx, and carbon diox- systems in the United States are voltage-
ND, adding 130 employees and becoming ide to generate an equivalent amount of limited, the systems are not able to accom-
one of North Dakota’s larger employers electricity over the 25-year life of a wind modate large wind projects due to the single
(Id.). turbine” (Gipe). phase lines (Parsons, Cohen and DeMeo).
The lack of a strong grid system will con-
Green customers Technological improvements tinue to hinder the wind power industry in
Wind power lacks appeal to a majority of Technological improvements and volume the United States since the ideal locations
utility customers because of the higher cost, production could lower the cost of wind for many wind farms are in rural, remote
but some environmentally conscious select energy by about 40% from current levels by places. A strong distribution system made
the option of how many blocks of green 2030 (Parsons, Grid-Connected). Projec- up of three phase connections provides the
power they want to buy. One block repre- tions show a 5% reduction in turbine costs key because such systems can absorb sig-
sents about a fifth of average household every time industry production doubles, nificant amounts of intermittent wind power
electric usage and costs about $2.50 more with four or five doublings expected by with relatively modest impacts on the qual-
than energy from existing sources (Garcia). 2030 (Id.). Taller turbines provide a key ity of power. Not only is the lack of three
Buying 100 kilowatt hours of wind power way to reduce costs of manufacturing. Taller phase connections a barrier to wind devel-
each month costs less than a dime a day. turbines increase performance because opment, but the cost of laying new cable
Buying that much wind power for a year faster winds are further from the ground. proves prohibitive. Cables can cost as much
will save 1,200 pounds of coal and keep Reductions in turbine weight combined as $179,000 per kilometer (Elquist).
2,400 pounds of carbon dioxide, the chief with innovative tower designs make pro-
greenhouse gas, out of the air (Clean En- duction of taller towers at reduced cost Intermittency
ergy for Colorado). possible (Id.). In the next 10 years, the cost Wind power also suffers from intermit-
Many utility companies invest in wind of wind power could reach 2.5-3.5 cents/ tent power quality problems. “At present,
power to capture a share of this premium kWh if turbines are mass-produced the lack of manufacturing design standards
market and to promote their company as (Chapman and Wiese). and certification accepted by both the wind
environmentally friendly. Green Mountain industry and the United States utility in-
Energy Resources, a Vermont utility com- Public support dustry obligates utility engineers to per-
pany, “…pledged to build a new wind tur- According to a 2005 Yale University poll, form detailed evaluation of each proposed
bine in the state every time it adds 3,000 87 percent of Americans support expanded installation of large turbines to determine
more customers for its green-energy pro- wind farms, and 86 percent want increased whether power quality impacts would be
grams” (Garcia). To date, most utility green funding for renewable energy research (En- acceptable” (Parsons, Cohen and DeMeo).
pricing programs attract less than 3% of vironmental News Service). In addition to Since wind provides intermittent energy,
residential customers and even fewer com- the public support, a new alliance of agri- the source proves unreliable and requires
mercial and industrial sponsors. culture, faith, renewable energy advocacy, systems to store wind power (Friends of the
business, and environmental groups sup- Allegheny Front). Although backup power
Diversifying the current energy portfolio port wind energy (Id.). In England, wind would be required, this amount need not be
As a country’s wind power industry ex- farms enjoy support by 80% of the popu- significant. One study revealed that 1,500
pands, wind energy increasingly helps sta- lace, while less than 10% oppose wind en- MW of new wind energy would only re-
bilize energy prices by minimizing the ups ergy. Surveys in England conducted since quire 7.8 MW of new backup power (Ameri-
and downs of oil, natural gas, and other the early 1990’s near existing wind farms can Wind Energy Association, Wind Power
types of electricity-generating fuels (Na- consistently find that most people favor Outlook 2005).
tional Wind Coordinating Committee). wind energy, with support increasing The intermittent nature of wind power
Even though wind supplies an intermittent among those living near existing wind farms presents difficulties in insuring that energy
source of electricity, the price of wind power (Embrace Wind). On the other hand, one is available when needed. “The peak pe-
remains more stable than that of natural gas study found that the greatest objection to riod for generating wind power is in the
or oil. Wind power holds the ability to wind power is the feeling that the various winter when wind currents are stronger,
supply electricity to remote areas (Darvill), renewable energy sources simply cannot but the peak season for demand is during
and leaves a small footprint, as to not inter- meet energy needs (Robins). the heat of summer” (Stebbins).
fere with crop production or livestock graz-
ing (Windustry, “Why Wind Energy?”). Disadvantages of wind power Capacity factor
Noise The megawatt output of a wind farm can
Environmental benefits Some opponents or skeptics of wind be misleading since most people fail to
Burning coal releases particulates that power cite noise as one of the major draw- realize that this number represents the theo-
can cause/contribute to asthma and releases backs. Design, siting, and proper construc- retical maximum output of a wind farm, not
sulfur dioxide and nitrogen oxides which tion of the blades provides the key to con- Cont. on page 6

NOVEMBER 2007 AGRICULTURAL LAW UPDATE 5
Wind power/ cont. from p. 5 tween the wind turbines and bat deaths has continues to decline.
the actual regular output. Wind turbines yet to be fully explained (Ibid). One hypoth- Wind power undoubtedly will continue
begin to generate electricity at about 8 miles esis states that bats appear to be attracted to to provide a small, yet rising and signifi-
per hour (mph), reach full power at about the open areas cleared by wind developers, cant, portion of the world’s future energy
30 mph, and are required to shut down to as they can more easily find insects there. needs. Emphasis on aesthetic placement,
protect the mechanism at about 55 MPH But researchers remain unsure why the bats economically and electrically efficient ties
(Sweet). Most wind sites produce some collide with the blades of the turbine- acci- to grids, and environmentally sensitive sit-
power more than 90% of the time, but only dent or attraction to the blades (Ibid). Some ing of wind farms is likely to increase and
achieve peak production around 10% of the environmentalists propose a moratorium improve over time.
time (Frontline). The typical capacity factor on wind development to research the deaths.
of a wind farm equates to 30%, while con- Other environmentalists believe the deaths Editor’s note: This article was originally pub-
ventional sources typically have a capacity are outweighed by the benefits of wind lished in Interdisciplinary Environmental Re-
factor of 70% (Friends of Allegheny Front). power (Ibid). view, Vol. IX, Number 1, June 2007.
Many opponents use the low capacity fac- As wind technology has improved, the
tor as a reason against investing in wind speed of the blades has slowed consider- References were omitted from this printing in
farms. ably to a range of 8 to 21 rotations per the interest of space; however a complete list of
minute (Whitley). Radar studies of Euro- references can be obtained from author, Jesse
Loss of property value pean offshore wind farms reveal that birds Richardson, at jessej@vt.edu or 540-231-7508.
The potential or real loss in property sense the presence of the turbines approxi-
value caused by wind farms remains a de- mately 150 yards away and either fly be-
batable issue. One 2003 study concluded tween the rows of turbines or completely 1
“It is estimated that in the United States subsidies to the
that property values within the five-mile around the wind farm altogether (Ibid). A fossil fuel industry overall exceed $20 billion a year.” In
view shed of the projects had not been 2005 Dutch study showed that “each tur- contrast, the production tax credit “…over a decade it has
cost roughly $55 million – and remarkably effective” (Bivens).
harmed and in fact, generally rose more bine killed an average 28 birds per year, a 2
“According to Federal Energy Subsidies: Not All Tech-
quickly than in outlying areas (Renewable third of what had been assumed on the nologies Are Created Equal the U.S. government has spent
Energy Policy Project). Since many good basis of research conducted in the 1980s approximately $150 billion on energy subsidies for wind,
wind power sites are near the coast and (Planet Ark). A new study suggests the solar, and nuclear power—96.3% of which has gone to
expensive land (Darvill), factors such as Netherlands’ 1,700 turbines kill about 50,000 nuclear power.” (Campbell).
high initial investment, aesthetics, and bird birds a year, compared to the two million 3
“Levelized costing calculates in current dollars all
deaths (Middlebury College) can feed into birds that perish each year on Dutch roads capital, fuel, and operating and maintenance costs associ-
debates over property values, and both real (Ibid). Large wind turbines producing more ated with the plant over its lifetime and divides that total cost
and perceived negative impacts. than 1.5 megawatts of power kill slightly by the estimated output in kWh over the lifetime of the
plant.” (Energy Information Administration).
more birds than smaller, older windmills. 4
The study has been challenged on the grounds that it
Aesthetics Although these bigger turbines kill more used too small of a sample, and studies on other wind
Opponents consider the projects eyesores birds, some claim this is offset by the in- projects have generally found no damage to tourism as a
that will result in a drop on property val- creased ability to produce electricity - five to result of wind turbine presence. It is hard to find sustainable
ues. Complaints against these towers as 10 times more with a larger turbine (Ibid). studies about the value of views.
eyesores tend to voiced more strenuously Studies conducted on wind power facili- 5
These factual similarities allow for further useful com-
in affluent communities, like Cape Cod, ties in northern California, Pennsylvania, parison via the existing national policies towards the pro-
Massachusetts (Ibid). A Suffolk University and West Virginia show that wind turbines grams supporting these two pieces of infrastructure.
study found that the project would cost the kill large numbers of raptors and bats. Stud-
Cape Cod economy at least sixty-four mil- ies in other parts of the country show com-
lion dollars in tourism spending (Ibid).4 Real paratively lower levels of mortality, al-
or perceived, aesthetic impact of the tur-
bines assume great importance to those in
though most facilities cause at least some
bird deaths. The results of these studies State Roundup
the surrounding area. were confirmed by a September 2005 GAO OREGON. Ownership. The plaintiff
The complaints against windmills com- report on wind power and wildlife, which sought to modify the water rights of seven
pare to the complaints against cellular tow- concluded that the impact of wind power water rights certificates by consolidating
ers (Hayden). Some allege that the devalu- on wild life varies by region and species seven points of diversion to two points of
ation from the construction of a cellular (General Accounting Office). Since many diversion. The plaintiff’s land was appur-
tower in a residential area could be as high wind power facilities in the United States tenant to the water rights to be used but two
as twenty percent (Maskaly). Erection of have not been studied, and the research of the water rights certificates were owned
large metal towers, be they cellular or wind thus far is contradictory, scientists cannot by the irrigation district, with the other five
turbine, brings about concerns that are near draw definitive conclusions about the threat owned by the plaintiff. The irrigation dis-
and dear to the hearts and wallets of those that wind power poses to wildlife. Further, trict objected to the consolidation but the
in the areas surrounding them (Hayden).5 much is still unknown about migratory bird water resources commission allowed the
patterns and overall species population lev- consolidation because the water used came
Effects on wildlife els, making it difficult to determine the from a river appurtenant to the plaintiff’s
Fears exist that wildlife will be nega- cumulative impact that the wind power land. The court reversed, holding that the
tively affected by the construction of wind industry has on wildlife species. water rights certificates established the
turbines. Wind turbines can serve as a physi- ownership of the water rights in the irriga-
cal barrier for birds, who must beware of Conclusions tion district and the consolidation could
the spinning blades, or animals, which may On the surface, wind power provides an not include the two certificates without the
experience habitat fragmentation with the environmentally sound source of renew- application by the irrigation district. Fort
installation of a wind farm. A 2004 study able energy. However, wind energy proves Vannoy Irrigation District v. Water Resources
estimated 1,500-4,000 bat deaths from wind controversial in practice. Bird and bat deaths, Comm’n., 207 Ore. App. LEXIS 974 (Or. Ct.
turbines on Backbone Mountain, MD. As intermittency, home value and aesthetic App.2007).
these bats are not endangered, the deaths concerns complicate the analysis. In addi- —Robert P. Achenbach, Jr., AALA
violate no state or federal law, but prove tion, wind-generated electricity costs more Executive Director
controversial (Blum). The connection be- than traditional sources, although the cost

6 AGRICULTURAL LAW UPDATE NOVEMBER 2007
Position notice: Executive Director for Pace Law School Energy Project
The Pace Law School seeks to fill the posi- Project efforts are concentrated in the areas stitutions. The Center is funded by public
tion of Executive Director of the Pace Law of global climate change mitigation, en- and private grants and contracts, and the
School Energy Project. The Energy Project, ergy conservation, and promotion of re- candidate must be knowledgeable about
unique among law schools, is a preeminent newable energy technologies and clean and be able to assure compliance with grant
advocacy and research organization which distributed generation. and contract conditions and associated fi-
promotes sustainable energy. It advocates The Executive Director administers the nancial accounting.
on behalf of environmental and consumer Northeast Combined Heat and Power Ap- The position’s salary range is between
groups. The Energy Project is an integral plication Center which delivers education, $100,000 and $120,000, depending on expe-
component of Pace Law School’s Environ- policy support, and technical assistance to rience. Pace University benefits are pro-
mental Law Program, which is consistently stakeholders throughout the seven state vided.
ranked among the top three in the nation. New York-New England region. He/she Pace is located in White Plains, New
The Executive Director is responsible for the also provides legal and technical support York, just 30 minutes north of New York
Energy Project’s strategic direction, admin- and direction in the development of the City. Its proximity to the City provides the
istration, and funding, and in this context Northeast Regional Greenhouse Gas Ini- Pace community outstanding opportuni-
supervises a high-level staff. He/she acts as tiative, and supervises the deployment of ties for intellectual and cultural activities.
liaison with energy policymakers at the fed- The Power Scorecard, an instrument for in- Within 45 miles of the Appalachian Trail
eral, state, and local levels of government, forming electricity consumers of the and only a few miles from the historic
the business community, press, consumer sustainability of utility power sources. Hudson River and Long Island Sound, Pace
groups, and donors. Key objectives for the Executive Director affords ready access to some of the most
The new Executive Director will assume include enhancing the Energy Project’s vis- beautiful areas in the Northeast. For more
these responsibilities at an exciting time for ibility and recognition at the national level information about the Energy Project and
Pace’s Environmental Law Program, which and maintaining and enhancing funding Pace Law School, see www.law.pace.edu
is celebrating its 30th anniversary in 2007- for the Energy Project. The Executive Di- To apply, please send a resume and refer-
2008, and it is conducting a comprehensive rector also will have the opportunity to ences to:
curriculum review to raise the profile and teach Pace’s energy law courses and will
breadth of energy and climate courses and interact with students and work closely Thomas Bourgeois
experiential learning opportunities offered with the environmental law faculty and Acting Executive Director
to students. staff. The Energy Project
The Executive Director directs the Energy The ideal candidate for this position pref- Center for Environmental Legal Studies
Project’s cutting edge legal and policy analy- erably should have a Juris Doctor degree Pace University School of Law
sis, legal intervention, and market support and should have excellent administrative 78 North Broadway
activities. Given the Project’s overall focus and management skills, in-depth knowl- White Plains, New York 10603
of reducing the environmental footprint of edge of energy law and the energy com- tbourgeois@law.pace.edu
the production and delivery of electricity, munity, and familiarity with academic in-

FEDERAL ROUNDUP
FAIR LABOR STANDARDS ACT TAXATION OF PASSIVE INVESTMENT owned and operated the only U.S. facility
The plaintiffs were chicken processing INCOME for slaughtering horses for human con-
plant workers who were required to wear The taxpayer S corporation decided to sumption, primarily outside the U.S. In
protective clothing while working. The plain- change its farming operations from em- 2007, Illinois amended the Illinois Horse
tiffs argued that the defendant employer ployee-run to crop-share leasing of the Meat Act, 225 ILCS 635, to prohibit the
violated the Fair Labor Standards Act for property. Under the crop share agreements slaughtering of horses for meat for human
failing to pay the workers for the time spent the taxpayer was actively involved in most consumption, whether the meat is sold,
putting on and taking off the protective management decisions, including decid- given away or exported. The plaintiff ar-
clothing over the course of a work day. The ing what crops to plant, monitoring crop gued that the amendment violated the U.S.
evidence showed that the amount of time rotation, determining varieties of seeds to Commerce Clause and the federal Meat
spent donning and doffing such clothing plant, and deciding what chemicals to ap- Inspection Act which limits the powers of
varied from six to 13 minutes a day. The trial ply to the crops. In addition, the taxpayer the states to regulate interstate and foreign
court had given the jury instructions as to paid 50 percent of crop inputs (such as commerce. The court ruled that the federal
the definition of work as something which storage, chemical treatment, and seed). The Meat Inspection Act applied only to the
required exertion, which included consid- taxpayer was liable for real estate taxes, extent horse meat was produced for human
eration as to whether the clothing was cum- insurance, tiling, and building repairs in- consumption but had no authority over
bersome or heavy or required concentration cluding maintenance of the dryers, eleva- whether a state allowed or prohibited the
for donning or doffing. The appellate court tor leg, grain blower and storage bins. The slaughter of horses for human consump-
remanded the case, holding that the instruc- tenants were responsible for labor and tion. The court also held that the law did not
tion was improper because the proper test machinery. The IRS ruled that the rents violate the Commerce Clause in that the
for the definition of work was whether the received under the crop-share leases were law did not favor Illinois companies over
activity was controlled or required by the not passive investment income under I.R.C. companies in other states, of which there
employer and was pursued for the benefit of § 1362(d)(3)(C)(i). Ltr. Rul. 200739008, June are none. Cavel International, Inc. v. Madigan,
the employer. De Asenico v. Tyson Foods, 20, 2007. 2007 U.S. App. LEXIS 22510 (7th Cir. 2007).
Inc., 2007 U.S. App. LEXIS 21289 (3d Cir. —Robert P. Achenbach, Jr., AALA
2007), rev’g and rem’g, 2006 U.S. Dist. LEXIS STATE REGULATION OF HORSES Executive Director
33411 (E.D. Penn. 2006). The plaintiff, a non-U.S. company,

NOVEMBER 2007 AGRICULTURAL LAW UPDATE 7
-

2007 Conference
The 2007 Annual Agricultural Law Symposium is history, and from the many compliments I received, the conference was
one of our best. San Diego did not disappoint and provided fine summer weather each day. I hope many attendees were able
to at least sample some of the fine coastal cuisine and the fascinating tourist attractions. Many thanks to President Roger
McEowen and the excellent speakers for a varied and informative program.

2007 Conference Handbook on CD-ROM
Didn’t attend the conference in San Diego but still want a copy of the papers? Order the entire written handbook plus the
1998-2007 past issues of the Agricultural Law Update on CD. The files are in searchable PDF with an interactive table of contents
that is linked to the beginning of each paper. Order for $45.00 postpaid from AALA, P.O. Box 835, Brownsville, OR 97327 or
e-mail RobertA@aglaw-assn.org. Copies of the printed version are also available for $90.00.

2008 Conference
Planning for the 2008 Symposium is already underway, with new President-elect Maureen Kelly Moseman seeking topic
ideas and speakers for the meeting in Minneapolis, MN on October 24-25, 2008 at the downtown Marriott. The Marriott is
located near the light rail system which connects downtown to the airport, the Mall of America and other local attractions. We
will be working with the Minnesota Bar Ag. Section to provide the best all around experience for attendees. Mark your calendars
now so we can have a record attendance.

Change of Address and phone/fax numbers for AALA Executive Director’s office:
AALA
P.O. Box 835
Brownsville, OR 97327
Phone: 541-466-5444 Fax: 541-466-3311
Robert P. Achenbach, Jr,
AALA Executive Director

8 AGRICULTURAL LAW UPDATE NOVEMBER 2007