Hatch: Corporate farm law a hard one to prosecute

By RON LARSEN

Journal Staff Writer

NEW ULM -- Attorney General Mike Hatch had a short message for those who are looking to Minnesota's ban on corporate farms to protect the family farm. That law is "tough to prosecute," and it could well be deemed unconstitutional.

Speaking at the annual Agricultural Lenders Seminar Thursday, Hatch said corporate farming and farm price regulation statutes are getting a closer look from the courts as whether these laws discriminate either in effect or intent.

"They're also looking at whether they interfere with interstate commerce," Hatch said.

A current battleground is in South Dakota where a three-judge appellate panel invalidated the state's constitutional amendment preventing corporate farms.

Noting that there are only nine states, including Minnesota and South Dakota, that have such a restriction, Hatch said South Dakota "has been ground-zero for these challenges."

"There are so many different circumstances that are involved in these cases that make them difficult to prosecute. That's why the answer usually is to pursue the matter in civil court," he said.

"Courts have held that prohibiting corporate ownership doesn't necessarily interfere with interstate commerce, but if the intent is to prohibit out-of-state companies from competing," Hatch continued.

"In South Dakota's case, the court looked at intent, and the appeals court determined that protectionism was the intent."

Location of the actual sale of processed meat is a key to price regulation cases, Hatch said.

"The Court has ruled that a state can't regulate the price of an out-of-state purchase. It doesn't matter that the meat was processed in a state if the meat is transported out-of-state to be sold," Hatch said.

In answer to a question, Hatch said his office has taken "very few" corporate farm cases under Minnesota law.

"You will not find any cases in Minnesota (that have been successfully prosecuted)."

Anti-trust laws aren't much help, either, Hatch said.

"A lot of small producers can be gobbled up before the market is affected."