Summary of a Recent
Judicial
Development in
USDA Refuses to Restore CRP Ground to
PFC Program
Kurt B. OlsonNational AgLaw Center Graduate Assistant
In Siebrasse v. USDA, 418 F.3d 847 (8th Cir. 2005), the Eighth Circuit Court of Appeals held that (1) the USDA’s refusal to convert land in the Conservation Reserve Program (CRP) back to the Production Flexibility Contract (PFC) program was not arbitrary and capricious, and (2) the agency did not facilitate a fraudulent transfer. Plaintiff’s brother, who held powers of attorney for their father for purposes of farm program participation since 1979, began leasing land from their father in 1996. See id. at 849. Also in 1996, the USDA sent a notice directly to plaintiff’s brother, in his capacity as power of attorney for his father, to inform him the father was eligible for enrollment in Agricultural Marketing Transition Act Programs, including the PFC program, and the power of attorney on file could be changed or revoked by the father at any time. See id. Neither plaintiff’s brother nor father acted upon the letter. See id. at 850. In 1997, plaintiff’s brother made the following transactions in regards to two tracts of land leased from the father: removed the land from the PFC program, enrolled it in CRP, and re-allocated the PFC program acreage to his own farm land. See id. Plaintiff inherited the two tracts of land upon their father’s death in 1999, terminated the CRP contracts, and applied to have the ground restored to the PFC program. See id. The Farm Service Agency (FSA) county committee denied his request, and plaintiff unsuccessfully appealed to the FSA State Committee, the National Appeals Division, the director of the National Appeals Division, and the district court. See id.
Plaintiff argued the original transfer into CRP was fraudulent because his father was incompetent in 1996, his brother was “self-dealing,” and the USDA facilitated the transfer because, contrary to their own regulations, it sent its 1996 notice to his brother, resulting in his father never receiving notice that he could terminate or modify the power of attorney. See id. The court, deferring to the USDA, found the agency followed its own policies in regard to the 1996 notice, plaintiff presented no evidence that his father did not receive the notice, and the undisputed facts show his father was not declared incompetent until 1998. See id. at 851. Therefore, the USDA’s actions were not arbitrary and capricious regarding the original transfer or the refusal to restore the land to the PFC program. See id.
The case was decided on March 14, 2005; this summary was posted Apr. 17, 2006.