BISMARCK — At its annual meeting in Bismarck, the North Dakota Stockmen’s Association examined the state’s anti-corporate farming law, but stopped short of making any policy decisions about it.

​About 450 cattle producers attended the group’s 86th annual convention Sept. 24 to 26. No policy proposals were offered on either side of the issue.

The state’s anti-corporate farm law dates to 1932 and prohibits corporations from owning and operating farmland. The 2015 North Dakota Legislature passed a law that would make an exemption for swine and dairy operations, in hopes the state might become more competitive in attracting dairies, as South Dakota has.

The North Dakota change allows larger, investor-owned livestock operations to own or control up to 640 acres of farmland. The North Dakota Farmers Union opposed the change and promptly launched an effort to overturn the law in a referral process that goes to a statewide vote in June 2016.

“We’ve got some members that would like to see North Dakota have corporate farming and we’ve got some that don’t,” said Steve Brooks, of Bowman, president of the N.D. Stockmen’s Association . “This isn’t something the board will decide. It’s going to be our membership that tells us which path.”

Technical answers

William L. Guy III, a Fargo lawyer, and Steven Troyer, a partner and agricultural specialist with Eide Bailly LLP, a Fargo-based accounting firm, spoke on technical issues with the law but  declined to answer rancher or media questions on whether an exemption in the corporate structure would be good or bad for agriculture.

Guy said partnerships are unregulated, but might not include a corporation. There can be no more than 15 shareholders. Every shareholder must be related to every other shareholder as a son, daughter, stepson, or grandparent, aunt or uncle, or first cousins, as primary examples, Guy said. At least one of the shareholders must be active in the farm or living on it, he added. At least 65 percent of the gross income must come from farming

The new exception to the law would be for dairies of 50 cows or more and operations of at least 500 hogs, under the regulation of the state Department of Agriculture and non-compliance enforcement by the attorney general, Guy said.

“Interestingly, if your corporation doesn’t comply, you’re required to report that, too,” he said. “You have to turn yourself in if you are in violation.”

Failure to report details about the corporation would be a Class A misdemeanor, with civil penalties up to $25,000. Private citizens can attempt to legally enforce the statute if the state doesn’t, he said.