Agricultural Easements

An agricultural easement may exist for any period of time to which the parties agree. However, where an agricultural easement is limited to a certain term of years rather than unlimited in duration, Ohio law prohibits the use of state funds for purchasing the easement, and federal tax benefits will be lost. Ohio law also provides that an agricultural easement for a term of years must state certain provisions in the easement document. These provisions include purchase and payment terms, renewal terms, and provisions for extinguishment of the easement.

See O.R.C. 5301.691.

A partial taking occurs where only part of a property parcel is appropriated. In such a case, the property remaining after the appropriation (the “residue”) can diminish in value once it is no longer part of a larger parcel. The landowner should be compensated for this decrease in value. The amount of the decrease is determined by calculating the difference between the value of the property before the taking and its value after the taking.

A calculation of damages can be difficult where there are many negative impacts on the remaining property, referred to as “severance damages”. For example, consider an appropriation for a highway that splits a farm into two separate parcels, one large and one small. The costs of operating the farm may increase because the small parcel is difficult to access now that it is on the other side of the highway. The small parcel might be an oddly shaped field that is no longer marketable for other purposes. In this case, severance damages should be determined for the increased cost of operation and the diminished marketability of the small parcel. The severance damages would decrease the value of the property after the appropriation, and should affect the amount of the landowner's compensation for the appropriation.

There are instances where an entity has attempted to make a partial taking, but the appropriation makes the remaining property useless to the landowner. In such a case the landowner may want to ask that the entity be required to appropriate the entire parcel, and therefore would receive compensation for the value of the total property.

A crop that is planted but not yet harvested when a lease expires is referred to as an “away going crop”. The right to an away going crop is dependent upon a few factors: the custom in the area where the crop is located and the actions of the landlord and tenant during the time when the crop was planted. Generally, Ohio law provides that a tenant does not have the right to an away going crop. The rationale behind this rule of law is that it would not be fair to allow a tenant to benefit from the proceeds of a crop that the tenant knew could not be harvested before the expiration of the lease period.

However, Ohio law recognizes a few exceptions to the general rule that the landlord has the right to an away going crop. First, if it is customary practice in the area where the crop is located that the tenant receives the away going crop, then the law will consider that custom to be a part of the lease agreement, and the tenant will have the right to the crop. Second, if the landlord stands by and allows the tenant to plant the crop without objection, the landlord cannot later claim the right to the crop. In this instance, the landlord would have to possess the knowledge that the tenant is planting an away going crop. Without an objection of the planting by the landlord, the tenant will be permitted to harvest the crop after the lease expires.

Because of the uncertainty over the right to an away going crop, it is advisable that the parties have a written farm lease which addresses the issue. The lease should include a provision clearly stating whether an away going crop may be planted, and who will have the right to the crop.

See Foster v. Robinson (1856), 6 Ohio St. 90; Prysi v. Kinsey (1930), 38 Ohio App. 92; Homan v. Smithers (1987), 1987 WL 13072.

The Ohio Supreme Court addressed this issue a number of years ago, and opened up the potential for a farmer who plants a crop in a road right-of-way to be liable if the crop obstructs the view of traffic. The Court stated that planting a crop in the right-of-way is inconsistent with the purpose of the right-of-way. If the inconsistent use of the right-of-way creates an unreasonable hazard to roadway users, then the person who planted the crop may be liable for resulting damages. The Court made it clear that the farmer could not use lack of knowledge as to the exact border of the right-of-way as an excuse.

The Court also stated that the political subdivision having control over the right-of-way could also be liable in this situation. The political subdivision has a duty to keep the right-of-way free from conditions that jeopardize the safety of traffic on the roadway. If it fails to do so, the political subdivision could be liable for any injuries caused by the condition of the right-of-way.

See Manufacturer's Natl. Bank of Detroit v. Erie Cty. Road Comm., 63 Ohio St. 3d 318 (1992); O.R.C. 2744.02(B)(3).

The Ohio Revised Code requires all “motor vehicles” to be registered and licensed, but exempts “farm machinery” from the definition of a “motor vehicle”. Therefore, farm machinery is not required to be registered and licensed with the State.

What exactly qualifies as farm machinery? The statutory definition of “farm machinery” is “... all machines and tools used in the production, harvesting, and care of farm products, including trailers used to transport agricultural produce or agricultural production materials between a local place of storage or supply and the farm when drawn or towed on a public road or highway at a speed of twenty-five miles per hour, or less, threshing machinery, hay baling machinery, corn shellers, hammermill and agricultural tractors and machinery used in the production of horticultural, agricultural and vegetable products.”

The definition clarifies that equipment such as tractors, wagons and combines qualify as farm machinery, but questions still arise over certain vehicles or equipment. Ohio court cases and opinions of the Ohio Attorney General have provided some guidance. The determining factor, according to these cases, is not the kind of vehicle or the occupation of the owner, but the use to which the machinery is put.

For example, Ohio has determined that a floater or “big A” used for custom spray applications is farm machinery because it is used in the “production, harvesting and care of agricultural products”; the fact that it is not owned by a farmer is irrelevant.

See O.R.C. 4501.01(B) and (U); State v. Devilbliss, 177 N.E.2d74 (1961); 1983 Ohio Op. Atty. Gen. 83-046.

Chapter 951 of the Ohio Revised Code deals with “Animals Running at Large and Strays”. There are several provisions pertaining to a livestock owner's duty:

A stallion, jackass, bull, boar, ram, or buck may not “be at large out of its enclosure.”

Horses, mules, cattle, sheep, goats, swine or geese may not “run at large in the public road, highway, street, lane or alley, or upon unenclosed land...”

An owner is liable for damages caused by an animal running at large upon the premises of another.

The statute sets up a situation where the owner may be held liable if the animal causes harm on a public road, or will be held liable for damages caused on the property of another. In the case of an animal running at large on a public road, a person claiming harm would have to prove that the owner was negligent by allowing the animal to be running at large. In the case of an animal that causes harm on the property of another, the injured party has the benefit of strict liability, meaning he or she would not have to prove negligence by the animal owner. Rather, the property owner need only prove that the animals were running at large, and that they caused harm; the animal owner then would be strictly liable for that harm. The owner is also responsible for compensating a person or governmental entity that holds the livestock until the owner reclaims the animals.

An owner may also face misdemeanor charges from the State or municipality for violating the statute or similar local ordinances.

Customers on the property create new liability concerns for a property owner. A customer is considered a “business invitee”, which is someone who is on the property for the property owner's benefit. Salespersons, delivery persons and repairmen are also considered business invitees.

In the case of a business invitee, the owner owes the highest duty of care to the person. That duty includes an obligation to inspect the property for any hidden or potential dangers, and to either take measures to correct the dangers or warn customers of the dangers. Note that the duty is not merely to correct or warn of known dangers, but to actively seek out any unknown or hidden dangers, or situations that could become dangerous. If the property owner breaches this duty and harm results, the property owner can be held liable for the injuries.

A few actions which can limit the property owner's liability include making regular, thorough inspections of the property, keeping up with repairs and maintenance, using signs and barriers to notify persons of potentially harmful situations, and obtaining adequate insurance coverage.

The Ohio Building Standards statute provides an exemption from the Building Code for “buildings or structures that are incident to the use for agricultural purposes of the land on which such buildings or structures are located, provided such buildings or structures are not used in the business of retail trade...”

Based on this definition, there are several questions to ask in determining whether the building is exempt. First, is it a “building or a structure”? A building means “any structure consisting of foundations, walls, columns, girders, beams, floors and roof, or a combination of any number of these parts, with or without other parts or appurtenances.” Second, is the building to be used for “agricultural purposes”? The statute defines agricultural purposes to include “agriculture, farming, dairying, pasturage, apiculture, horticulture, floriculture, viticulture, ornamental horticulture, olericulture, pomiculture, and animal and poultry husbandry.” Third, is the building to be “used in the business of retail trade”? The State will consider a building to be used for retail trade if less than fifty per cent of the gross income from sales of products in the building are from products produced or raised in a normal crop year on farms owned or operated by the seller. Where the owner intends to sell only products from the farm, the question of retail trade is not an issue. But where more than fifty per cent of income is derived from selling goods other than direct farm products, then the building is no longer exempt from the Building Standards law.

If the building is exempt, the owner is not required to obtain a building permit or go through inspection and code requirements.

See ORC 3781.06.

Farmer’s Legal Action Group – www.flaginc.org/home.htm – The FLAG web site should be a first stop if you’re seeking recent news on FSA programs and rulings. The site also includes current news items relating to family farms, and a list of links to other websites, such as USDA, sustainable agriculture, and state agriculture departments.

Missouri Ag Law Center – www.americas.missouri.edu/Faculty/SMatthews/MALC.htm – This site includes publications and articles available for downloading, topic folders of links on subjects such as contracting, farm leases, and business organizations, and hundreds of links to other resources (click on “link collections” under “other useful ag law information”). Note that some of the information is an interpretation of Missouri law, which could of course differ from Ohio’s interpretation.

AgricultureLaw.com – www.agriculturelaw.com/ - This is a site operated by a law firm in Washington, D.C. It’s a good, up-to-date source for agricultural policy, with an emphasis on trade and business issues. If you’re trying to find out what’s happening with an agricultural issue in Washington, try looking here.

Iowa Grain Quality Initiative - www.exnet.iastate.edu/Pages/grain/homepage.html – I like this site for its Grain and Livestock Production Contract checklists, which you will find under the “tools” link.

Farm Service Agency – www.fsa.usda.gov/ - The FSA has put together a pretty good website. You can print off fact sheets, temporary directives, and FSA forms from the site.