https://www.nationalreview.com/2024/03/ ... l-farmers/
Oregon’s Government and Dairy Industry Join Forces against Small Farmers
By Ari Bargil & Daryl James
March 17, 2024 6:30 AM
Many industries invite overregulation, which inconveniences existing companies but devastates newcomers — even in the milk market.
Milk might travel hundreds of miles to reach grocery shoppers in the dairy aisle. But the distance from the milking machine to the pickup station at Godspeed Hollow Farm in Newberg, Ore., is just 100 feet.
Sarah King, who launched the enterprise on her eleven-acre property in 2017, keeps things simple by design. She and her husband never own more than two or three milk-producing cows. The animals know the routine. Often, they come in from the fields and wait in the barn for their turn at the milking stanchion, where they each spend 15 to 20 minutes. The rest of the time they are free to wander. Sarah’s clients contract with her in a “herdshare” system: They purchase an interest in the animal for a portion of its produce. They like the sustainable, ethical, transparent business model — and the raw milk that comes with the arrangement.
Industrial dairy farms follow a different model. They aim for efficiency and economies of scale by keeping tens of thousands of cows. These operations keep the livestock penned up for extended periods of time, producing significant waste in concentrated spaces.
The contrast with Godspeed Hollow is stark, yet Oregon decided in 2023 to impose Big Dairy regulations on the state’s smallest players through the reinterpretation of existing rules. Oregon plans to tag any farm that uses a prepared surface for milking as a “confined animal feeding operation” (CAFO). The label would apply even to farms such as Sarah’s, where cows are only “confined” for 15 minutes per day for milking and are otherwise free to roam.
A CAFO designation would have significant implications for Sarah. She would have to install drain lines and holding tanks whose cost could exceed $100,000 — a steep price for equipment she does not need or want. Large farms must channel their waste, but Sarah methodically rotates her cows between pastures, giving the land a chance to metabolize the waste and use it as fertilizer. The operation is safe, and the state has no evidence of soil or groundwater contamination.
Regulators do not care. Their goal is not environmental protection but economic protection. Industry insiders, worried about competition, requested the CAFO reinterpretation as a ploy to burden and bankrupt small-time players.
Rather than put her business out to pasture, Sarah fought back with a constitutional lawsuit. Our public-interest law firm, the Institute for Justice, represents her and other Oregon farmers who have similar businesses. While the case proceeds, the Oregon Department of Agriculture has agreed to temporarily hold off the enforcement of its reinterpreted CAFO rules. But because the agency refuses to admit wrongdoing or permanently suspend its policy, the case will go on.
The case highlights a nationwide problem with protectionism that persists in nearly every industry. Big hospitals use government-issued certificates of need to block rival projects. Restaurants use zoning laws to ban food trucks. Land developers use eminent domain and fake blight to push aside property owners. Funeral homes, beauty salons, engineering firms, day-care centers, and real-estate agencies use occupational-licensing laws to hinder market entry.
Many industries invite regulation upon themselves as a backhanded form of protectionism. Unnecessary rules can inconvenience existing companies, but they devastate newcomers — especially during the start-up phase, when fledgling firms can least afford legal assistance. Opening a bookstore in Newark, N.J., for example, involves 74 bureaucratic steps. Opening a restaurant in Atlanta involves 76 steps. Opening a barbershop in Boston involves 81. Many start-ups get tangled in the red tape and close before serving their first customers. Big Dairy is especially adept at regulatory capture: the process of taking control of regulatory instruments and wielding them against people like Sarah who lack political pull.
Over the years, regulators have forced small dairy farms to pay for “Got milk?” advertising that undercuts their niche branding. Regulators in Maryland and Florida have tried to stop family-owned creameries from calling their all-natural, pasteurized skim milk “skim milk” because they would not add artificial ingredients. And regulators in Oregon have tried to impose a raw-milk-advertising ban.
Small dairies are not the only businesses in these regulatory crosshairs. Big Dairy lobbied state regulators to force Montana grocery stores to dump fresh milk before it spoils. And national lobbyists conducted a yearslong campaign to stop plant-based-milk producers from using phrases such as “almond milk” and “soy milk” on their labels.
This rampant protectionism is not only wrong but unconstitutional. People are entitled to equal protection under the law, which means the government cannot pick winners and losers. Everyone deserves a chance to earn an honest living, even if Big Dairy has a cow.
Ari Bargil is a senior attorney at the Institute for Justice, where Daryl James is a writer.