Agricultural Law

Agriculture law refers to diverse legal issues that affect the agricultural industry, including agritourism. Issues often include regulatory compliance at the federal (United State Department of Agriculture) and state levels (Virginia Department of Agriculture and Consumer Services); private contracts between agricultural vendors such as agriculture production contracts, purchase agreements, and farm land leases; and real property and zoning cases involving a farmer's right to use land for agricultural (Va. Right to Farm Act) or agritourism ("Boneta Bill") purposes.

Typical Agricultural Contracts

Agriculture-related contracts have been established between parties for millennia. Although most contracts throughout human history were honored by reputation and relationships ("handshake agreements"), disputes over performance of those contracts has also been resolved by third-party interventions including arbitrations (dating as far back as 2500+ B.C. in the Middle East) and court decisions (including Roman law requiring arbiters to resolve disputes). In our culture where the rule of law is the fallback enforcement mechanism when contract disputes cannot be resolved privately, agriculture-related businesses should rely on a clear, concise contract, which establishes the parties' interests, intents, and expectations at the time that the contract was formed.

While it may appear clear to the parties at the time of a contract what each other's rights and responsibilities are, there are often many fine details that are not discussed that can become points of dispute and lead to a breakdown in the contractual relationship. For example, what constitutes "in good health" when describing the condition of livestock to be purchased. Able to breathe and heart beating, or also fertile? Or what did the parties mean when they say that "Parties are to mediate their disputes before filing in court"? Who is the mediator? City Slicker from D.C. with no prior knowledge of agriculture practices; or a relatively local farmer who also works within the same category of agriculture that knows the industry practices? An attorney's involvement at a contract formation stage can help clarify those points that the parties may not have even considered.

There are many kinds of agriculture-related contracts including:

Production Contracts

  • Sales (producer owns crop until sold to buyer)
  • Bailment (producer possesses commodity while contractor holds title and any resulting crops/offspring; includes seed production contracts)
  • Personal Service (producer strictly serves to grow contractor's crop/livestock but has no interest in it, including possessory)


Purchase Agreements

  • Land
  • Animals/Livestock
  • Machinery and Equipment (outright; installment; gradual; lease with option to buy; lease with gradual; and rollovers)


Leases

  • Land (includes cash-rent; crop-share; and hybrid)
  • Grazing
  • Animal (ex: breeding leases)
  • Farm Machinery


Custom Feeding Arrangement

Stocker Cattle

Non-disclosure agreements (or confidentiality clauses in other contracts)

Agriculture Regulatory Compliance

Like most other businesses, farmers are regulated by agencies to ensure consumer protection. A few of those agencies whose regulations may impact a farm's operations include the U.S. Department of Agriculture, the U.S. Environmental Protection Agency, the Virginia Department of Agriculture and Consumer Services, and the Virginia Department of Health.

For example, if a farmer's products are expected to be sold out-of-state, or the farm is located near a "navigable body of water" as the EPA defines it, federal agencies and their regulations are much more likely to apply to a farm than just Virginia law. That could also mean federal agency inspections in addition to those conducted by Virginia-based regulatory agencies.

Virginia's laws and regulations, while often applying generally to agriculture (ex: labeling; sales of farm produce; food and drink regulations; waste kitchen grease; zoning laws; structural requirements; etc.) can also be very product-specific. Milk, fertilizer, livestock and poultry, seeds, beekeeping, apples, vinegar, and alcoholic beverage makers (ex: wineries; distilleries; breweries) are also all subject to unique regulations governing their operations.

Protections for Farmers and Agritourism

Since 1981, the Virginia General Assembly has supported local farmers by enacting and maintaining the Right to Farm Act (Va. Code § 3.2-300 et seq.). The Right to Farm Act was originally enacted to protect farms from private nuisance lawsuits by residential neighbors whose properties bordered farms (ex: Private Neighbor sues Private Farm for noxious manure odors). It was amended to also protect against public nuisance lawsuits (ex: Local Government sues Private Farm on behalf of many citizens due to widespread noxious manure odors), and to limit local government's ability to regulate farms via 'special use permits'.

Under the current form of the law, "agricultural operations" (devoted, bona fide crop production operations) located in agriculturally-zoned areas can only be sued for generating nuisances if the farm fails to adhere to "existing best management practices" or fails to "comply with existing laws and regulations of the Commonwealth." (Va. Code § 3.2-302). If the farm acts negligently with respect to its operations, and that negligent act causes harm to a neighboring property, the farm will not be protected by the Right to Farm Act. The law also does not protect farms for polluting streams, or causing floods on others' properties.

The Right to Farm Act also significantly limits local government from regulating agricultural operations on agriculturally-zoned land. While local governments are expressly permitted to regulate minimum setback requirements, minimum area requirements, and very general land use requirements that apply to all properties in an agriculturally-zoned area, local governments cannot require farms to apply for special use permits (unless the operations expand beyond what is considered an "agricultural operation" such as food processing and manufacture). Even general land use requirements must not "unreasonably restrict or regulate farm structures or farming" activities unless "such restrictions bear a relationship to the health, safety, and general welfare of its citizens." (Va. Code § 3.2-301)

But what about the ever-growing agritourism industry? As of 2014, the "Boneta Bill" (in honor of Martha Boneta whose situation sparked the campaign to enact the legislation that was eventually passed) was passed (Va. Code § 15.2-2288.6). The Boneta Bill limits local government's authority to regulate agritourism practices. In short, an "agricultural operation" as defined under the Right to Farm Act (Va. Code § 3.2-300) cannot be regulated by local government absent a "substantial impact on the health, safety, or general welfare of the public." Notably, the law does not restrict its application like the Right to Farm Act does to "agricultural operations" in agriculturally-zoned areas; just to "agricultural operations." This means a valid agritourism business located in an area not zoned for agriculture may not have the protections of the Right to Farm Act (ex: nuisance lawsuit protection; limited local regulation of farming activities), but be protected from local regulation of the agritourism activities.

The law specifies that the protected agritourism activities include "any activity carried out on a farm or ranch that allows members of the general public, for recreational, entertainment, or educational purposes, to view or enjoy rural activities, including farming, wineries, ranching, historical, cultural, harvest-your- own activities, or natural activities and attractions. An activity is an agritourism activity whether or not the participant paid to participate in the activity." (Va. Code § 3.2-6400). The law also protects local regulation of selling agricultural products (ex: crops) or agriculturally-related products (ex: farm equipment or artisan products); food products prepared in private homes on the farm such as 'homemade' jams, jellies, popcorn, etc. (specific limitations apply, be sure to review Va. Code § 3.2-5130); or "other activities or events that are usual and customary at Virginia agricultural operations" (ex: animal shows and hay rides are covered; bungee-jumping off a silo is probably not).

When a local government seeks to regulate agritourism on the basis of a "substantial impact," the local regulation must take into account the "economic impact of the restriction on the agricultural operation and the agricultural nature of the activity." (Va. Code § 3.2-5130(A)). In simple terms, the locality has to be very mindful of how the regulation may not be reasonable under the circumstances, and can be struck down if it's not carefully tailored to remedy the specific concern.

Additionally, the Boneta Bill does not permit local regulations to require agritourism businesses from needing to obtain event permits (ex: outdoor music festival; street sales; etc.) in agriculturally-zoned areas, unless there is a substantial impact on the health, safety, or general welfare of the public. (Va. Code § 15.2-2286).

Aside from the Boneta Bill, agritourism businesses should be aware that owners of agritourism businesses are also protected from liability for personal injuries sustained by individuals participating in the agritourism activities as long as the requirements of Va. Code § 3.2-6401 are followed.

If you have an issue related to agricultural business activities, our office can help you with transactional and litigation matters.