Screenshot Photo Gov. Doug Burgum addresses the House Agriculture Committee to give support to a bill that would allow corporate investments into North Dakota animal operations.

BISMARCK – A controversial House bill that proponents say is necessary to grow North Dakota’s livestock industry drew members of the agricultural community from both sides of the issue at a hearing Friday.

Allowing corporate livestock and poultry operations won’t solve the challenges faced by her family’s 63-year-old turkey farm, said Mary Rude, a senior at Dakota Prairie High School in Nelson County.

“I think it would hurt our farm more, Rude said.

“One of our biggest concerns is this bill doesn’t even require shareholders to be farmers or have any connection to the community,” she said. “They won’t value our local community the same way that my family and our neighbors do.”

Richard Roland, Crosby, spoke of the failed effort in the 1980s to operate Quality Pork in his community due to the inability to raise capital under current law.

“If we applied this anti-corporate farming law to the oil industry, do you think they’d be here?” he said. “So why is animal agriculture such a sacred cow? Why do we hamstring these livestock producers with this archaic 1930s law? But maybe if we can’t change this law, maybe we should look at some new innovative ways to create the finances needed.”

The North Dakota House Agriculture Committee limited oral testimony on House Bill 1371 to two and a half hours, taking only written testimony after time ran out. The bill, introduced by Rep. Paul Thomas, R-Velva, would allow shareholder investment in dairy, cattle finishing, poultry and swine facilities on less than 160 acres.

Proponents spoke of the need for capital to grow the state’s livestock industry. They cited benefits of corporate-structured livestock operations to neighboring farmers, including access to a market for their feed crops, access to manure fertilizer and opportunities to invest in or to be part of value-added activities.

Opponents testified of unintended consequences in other states, including odors, pollution and corporate dominance of the industry. They raised concerns about a corporation controlling all aspects from production to market, eliminating the projected benefits to neighboring farmers and pushing small livestock operations out of the market, devastating local economies.

“By letting corporations into our state, we lose local control. We need local farmers and ranchers controlling our businesses, not meatpackers,” said rancher Frank Matejcek, Grand Forks, a past president of the North Dakota Angus Association.

Minot farmer Travis Zablotney said large corporations are focused on profit and often take that profit out of the state.

“Maybe allow some way for capital to be injected but not through wide open allowance of corporate entities to come in,” Zablotney said. “You’re advocating not for the people. You’re advocating for growth in business for outside investors and taxing authorities.”

Craig Jerolemich, Forest River, who has been engaged in the pork industry and with N.D. Livestock Alliance, said HB 1371 allows producers to connect with the networks they need to build modern facilities and have cash to operate.

“The barrier for North Dakota is not climate. It’s not land. It’s not feedstuff or lack of ambition. It is the legislative and legal barriers that are holding North Dakota back from this tremendous opportunity to grow the livestock industry in the state,” he said.

Gov. Doug Burgum, who has been promoting the bill, said it gives operators of animal farms the same right to access capital as other businesses and entrepreneurs in the state.

“I think it’s time that if we love our family farms that we also trust them, that they would be given the same tools that every other business in our state has,” he said. “We have to find solutions to help support rural families that want to stay on the farm. This is a way to do that. It’s simple. It’s common sense, and it’s right there in front of us.”

North Dakota Agriculture Commissioner Doug Goehring said he has seen many opportunities lost due to the state’s anti-corporate farming law. In particular, he mentioned a family corporation that wanted to expand its dairy operation into North Dakota and a poultry operation that required additional investment that wasn’t available under state law.

North Dakota Farm Bureau President Daryl Lies, a Douglas ag producer, said that although the anti-corporate farming attitude in North Dakota isn’t totally to blame for the decline in the state’s livestock industry, it hasn’t helped.

He recalled working with out-of-state investors in the mid-1990s for a farrow-to-finishing hog operation that would have included a feed mill serving the area’s livestock industry. The plan never materialized due to state law, he said.

North Dakota Farmers Union President Mark Watne, whose family farm is at Velva, said corporate farming laws in other states have increased livestock numbers but have not saved family farms. In Oklahoma, it has eliminated independent operations, he said.

South Dakota has lost 650 licensed dairy herds since 2002 and 81% of its hog farms from 1997 to 2012, the same percentage as North Dakota, he said.

“Changing the corporate farming law is not the right solution,” Watne said. “If we want to build better opportunities for livestock production, we have to build out the supply chain. We have to provide better marketing opportunities to develop processing in the state.”

He added that current law already allows partnerships of unrelated individuals and multi-family corporations as well as outside investments into agriculture cooperatives. He called for an interim study to look into a vision for the livestock industry, resources and training for producers and ways to embrace local control.