Todd Janzen - Legal Columnist - LexBlog Legal news and opinions that matter Tue, 26 Jul 2022 02:24:30 +0000 en-US hourly 1 Todd Janzen - Legal Columnist - LexBlog 32 32 Understanding the Scopes of GHG Emissions Thu, 21 Jul 2022 13:59:32 +0000 The Securities and Exchange Commission (SEC) has proposed a new rule meant increase the ESG information available to investors, but it is also causing some heartburn in agricultural circles due to the feared downstream effect. The SEC’s proposed corporate disclosure rule would require publicly traded corporations to report their greenhouse gas (GHG) emissions.  Much of these disclosures center around what are called “Scope 1,” “Scope 2,” and “Scope 3” emissions. If you have read these terms and wondered the Scope of emissions means, read on.

Scope 1 Emissions.  The Kyoto Protocol introduced the concept of the “scopes” of emissions regarded to GHG, including carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, and nitrogen trifluoride. Under the Kyoto Protocol, “Scope 1” emissions are direct GHG emissions that occur from sources owned or controlled by the company. These emissions might include those from company-owned, leased, or controlled machinery or vehicles. Think of these as the direct emissions a company generates itself.

Scope 2 Emissions. Scope 2 emissions are emissions resulting from the generation of electricity purchased and consumed by the company. Because these emissions are generated by a third party (power companies), they are considered indirect emissions.

Scope 3 Emissions. Scope 3 emissions are more difficult to quantify. Scope 3 emissions are all other indirect emissions that are not included in Scope 1 or 2 emissions. Scope 3 emissions are a consequence of the company’s activities but are generated from sources that are not owned or controlled by the company.  These emissions might include emissions associated with the production and transportation of goods that are purchased by the company from third parties.  associated with the production and transportation of goods a registrant purchases from third parties or the emissions generated by employees.  I think of these as consequential emissions.

The SEC’s proposed reporting rule has become controversial within US agriculture because of the potential to require reporting of Scope 3 emissions. This could require food companies, for example, to include the emissions from farmers who generate the raw products for their food products. That, in turn, could cause these food companies to take more control, or mandate additional GHG friendly practices, from their farmer suppliers. Because Scope 3 emissions are more vague and hard to characterize than Scopes 1 and 2, this requirement also creates a lot of uncertainty about its impact on farms.

In many instances, the SEC proposed rule on GHG emission reporting is already affecting the farm, even before it goes into effect. Many food companies are already working to reduce the carbon footprint, and that means changes to their supply chains. The question for me is whether the SEC rule, however well intended, will drive more control of the farm to large publicly traded companies.

To read the SEC proposed rule and submitted comments, visit the SEC website.

Janzen Ag Law Blog
Apple CarPlay Will Soon Control Your Car. Will Apple TractorPlay be Next? Thu, 09 Jun 2022 16:58:16 +0000

Apple CarPLay in 2022

I recently replaced the CD player on my 1999 Toyota Landcruiser with a modern Apple CarPlay equipped stereo. My old SUV now displays the latest iPhone apps when I drive on the stereo’s LCD screen. CarPlay works great. If you have driven a car with Apple CarPlay, you know that it drastically simpliefies integrating your phone into your driving experience. No more searching for a way to sync your iPhone’s contacts, music, or maps with your vehicle.  Just plug in your phone (or connect wirelessly) and your phone’s apps appear on your vehicle’s infotainment screen. (Google’s Android auto works the same way).

The current CarPlay system, however, is just the tip of the iceberg.

On June 7, 2022, Apple unveiled the next generation of CarPlay. The next-gen system will take over and replace participating new vehicles’ entire information display, not just the stereo. Carplay will essentially become the operating system for your vehicle. This also means that CarPlay will not just feed you information from your phone, but will be a tool that can control nearly all functions of your car.

I predict that Apple App Store for CarPlay will really explode as developers make new apps to do things with our cars we cannot imagine today.  For example, GM could offer its “Super Cruise” autonomous driving feature as an app that will drive your car.  Download the Super Cruise app on your Ford and use the software to control your vehicle.

apple carplay of the future

Restaurants, coffee shops, and other roadside venues will create apps that will change your driving experience. Subway, for example, could let you use the in-car app to order that $5 footlong while driving. Concert and sport venues could create apps that guide your car to the available parking spots. The possibilities are endless for app developers.

What does this mean for communication screens in farm equipment? This time of year, farmers love to post pictures of their tractor cabs filled with monitors during planting season.  It is not uncommon to see one monitor for the tractor, one for the planter, and one for the planting data. The farmer is able to recieve a lot of information, but the user experience appears chaotic when compared to something like the next generation of CarPlay. Is it inevitable that a major software developer or agricultural OEM will create a CarPlay-like experience for the tractor cab? A similar “TractorPlay” operating system could revolutionize the farmer’s in-cab experience too. For example, rather than plug in your unique planter monitor, you could simply download the planter app to your TractorPlay operating system and run the tool as an embedded software program.

A single, integrated operating system could change the entire in-cab experience. A combine monitor might run apps for a grain trucking company that makes sure empty trucks are always waiting at the end of the field. Another app might connect to the local grain elevator to constantly update storage numbers and market prices in front of the operator. With CarPlay in the cab, the possibilities are endless.

What do you think?  Is the next generation of CarPlay a model that we will see move into the tractor or combine cab?

Janzen Ag Law Blog
Building a National Ag Data Infrastructure Thu, 12 May 2022 17:34:00 +0000 I recently advised the AGree Initiative and the Data Foundation on a white paper titled: Modernizing Agricultural Data Infrastructure to Improve Economic and Ecological Outcomes. The white paper explains the current problems with the USDA’s decentralized, disorganized system for collecting ag data and concludes with four different possible solutions. As congress begins to shape the next farm bill, the time for discussing these issues is now.

Though many farms are already collecting and using ag data to improve their operations, the USDA has not similarly benefited from this new technology. USDA lacks the ability collect, share, and analyze wide swaths of agricultural data. In many instances this is intentional, as it protects producer privacy, but it is also the product of gradual evolution. To illustrate the point, the white paper contains a graphic that shows how many ways farmers report data to different agencies within USDA.

The result is that USDA cannot do the cross-agency data sharing the farmers can do with their peers. This means we do not always have direct evidence that certain farm programs are achieving their outcomes or hindering them. But USDA is not the only loser in the current situation. Farmers, agribusinesses, and policymakers could all benefit from increasing the collective knowledge that USDA has about farms. Better data will improve farm research to increase productivity, reduce environmental footprints, and help create USDA programs that are a better value to the taxpayers.

The white paper explores four solutions to improve data acquisition, management, and use:





These solutions are described in more detail in the white paper. You can download a copy of the paper on this website: Modernizing Data Infrastructure to Improve Economic and Ecological Outcomes.


Learn more about the Agree initiative of the Meridian Institute.

Learn more about the Data Foundation.

Janzen Ag Law Blog
How Antiquated Real Estate Laws are Stopping Farmers from Fighting Climate Change Tue, 19 Apr 2022 15:05:27 +0000 Nearly every large food industry corporation today has pledged to combat climate change by reducing its own carbon footprint. McDonald’s has pledged to be net zero by 2050. (McDonald’s Accelerating Climate Action to Reach Net Zero Emissions by 2050).  PepsiCo has pledged to be net zero by 2040. (PepsiCo Doubles Down on Climate Goal and Pledges Net-Zero Emissions by 2040). Walmart has pledged to remove a gigaton of greenhouse gas emissions from its value chain by 2030, the equivalent of removing 200 million cars from the roads every year. (Climate Change, Walmart). These companies will work to reduce their own emissions, but these goals are only achievable by reducing the carbon footprint of their supply chains. This means using their enormous purchasing power to push climate-friendly practices down the supply chain all the way to the soil where crops are grown. 

Midwestern farms are learning they are sitting on an untapped resource to meet climate change goals, namely, millions of acres of farmland that have always been farmed to maximize production. Soil and climate scientists are finding that, with some production changes such as planting cover crops during fallow periods to ensure soil is always pulling carbon dioxide (CO2) out of the atmosphere, farmers can increase soil uptake of carbon in farmland. See Noah Wicks,Saving the Planet by Saving the Soil: Can Cover Crops Help?, Agri-Pulse (Nov. 29, 2021). If this carbon is locked down and remains in the soil for years, it becomes an act known as “sequestration.” 

This task seems simple—a cereal company buys corn from farmers who maximize soil carbon sequestration, and the company lowers the carbon footprint of a box of corn flakes. From a contract standpoint, however, getting a farmer to change how corn is grown is more complicated. A typical corn farmer has no direct contract with a food processor. The food processor has no ability to require the farmer to continue sequestering carbon on the farmer’s field for multiple years after the crop was delivered. 

The traditional legal tools to accomplish these long-term land restrictions have historically been achieved through deed restrictions, leases, or easements. However, companies searching for ways to sequester carbon in farmland are mostly choosing to bypass traditional real estate contracts and instead create new “soil carbon” contracts. Let’s examine how these new contracts work, how they bypass traditional real estate agreements, and how our real property legal system can be modernized to help fight climate change.

Who Are the Parties Involved?

There are typically four parties with roles in a soil carbon sequestration contract. At one end is the farmer who is growing crops on land, and a rancher who manages grazing land (both referred to as “farmer” for purposes of this article). The farmer does the actual work to sequester carbon in his or her farmland’s soil. 

The farmer contracts directly with a third party who quantifies the amount of carbon sequestrated and turns that result into a product that can be sold—a carbon credit. A carbon credit is commonly thought of as the equivalent of one metric ton of CO2 or its equivalent amount of other gases, such as methane or nitrous oxide (CO2e). The third-party quantifier acts as “broker,” selling the carbon credits to buyers, such as McDonald’s, PepsiCo, or Walmart, who are looking for ways to offset their own carbon footprints. 

There is one additional party needed to create of carbon credit. The third-party broker typically uses a protocol established by another organization that has created scientific methodologies for determining what practices create enough sequestration to generate a carbon credit. This third party is the “verifier.” In this way, carbon credits are analogous to an environmental crypto currency. The farmer does the mining, the broker creates the app that allows the sale of the currency from the farmer to a buyer, and the verifier sets the protocols for creating the currency.

While the contractual relationship for generating a carbon credit is primarily between the farmer and broker, for the contract to accomplish its goals, all four parties are required—farmer-broker-verifier-buyer. 

How Do Soil Carbon Contracts Generate Carbon Credits? 

Regular tilling of soil releases organic matter and increases the return of CO2 to the atmosphere. The less a farmer disturbs the soil, the greater the increase in soil carbon sequestration. Likewise, pasture that is overgrazed results in decreased CO2 absorption by grasses and increased CO2 pollution into the atmosphere. 

The soil carbon contract is still too new for the industry to have settled on a single form. After reviewing many versions of these types of agreements, here are the common key components.

Enrollment of land. Whether the subject an 80-acre corn field for 1,000 acre grazing pasture, the first part of any soil carbon contract is the enrollment of land into the program. Farmers and ranchers must identify the land they are committing to carbon sequestration. This is usually done by identifying the borders of the property on a digital platform that uses satellite imagery. The legal system gets left behind here as the typical tools for identifying land (surveys and legal descriptions) are replaced by modern, digital alternatives. Similarly, the brokers ignore the traditional way of committing the land to use by a third party, a written lease recorded in the county deed records. Enrollment instead relies on a contractual agreement between the farmer and broker. 

Mandated farming practices. Land enrolled in a carbon sequestration program is committed to following certain prescribed farming practices. These carbon reduction “protocols” are provided by the broker to the farmer, who is contractually obligated to follow them. For example, a farmer may commit to planting a cover crop on a barren corn field after harvest that will grow until the spring when the farmer is ready to plant the next corn crop. The broker obtains these protocols from the verifier in most instances. One unique aspect of these protocols is that they are not static during the term of the contract but can change from year to year.

Data collectionAt least annually, the broker collects agricultural data (ag data) from the farmer to confirm the protocols were followed and estimates the amount of new carbon sequestered in the soil. Additionally, the broker may take soil samples from the land to ground-truth the carbon estimates. This is an area where machine learning and artificial intelligence play a significant role because the more automated and the fewer boots-on-the ground required, the more efficient the broker is at producing carbon credits.

Verification. The broker will submit the data collected from the farmer to the third-party verifier to determine the carbon credits generated match the CO2 sequestered according to the verifier’s approved methodology. 

Transfer of Carbon Credits. At this point, the carbon credit is ready for sale by the broker to the buyer. Some brokers will share in the profits of sales with the farmers who generated these credits. Other brokers pay a flat fee per acre, keeping all of the risk of market swings and also all of the profit. 

Prohibitions on “stacking.” If a farm produces 100 bushels of corn, only one person or company can buy and take delivery of those bushels from the farm. However, a farmer who sequesters enough soil carbon to generate 100 carbon credits could, in theory, engage two brokers to measure the soil carbon and generate 200 carbon credits. For this reason, soil carbon contracts prohibit this sort of “stacking,” but also rely on the honesty of the farmer to ensure that no stacking occurs since there is no way for one broker to know if a farmer has signed up with another broker. 

ContinuityThe enrollment of land in a soil carbon sequestration program usually requires a long-term, continuous commitment. From a climate perspective, there is little value in sequestering carbon today and releasing it tomorrow. For this reason, soil carbon contracts have a continuity element, requiring year-after-year, continual implementation of the protocols. Ideally, brokers would bind farmers to even longer commitments to ensure that carbon sequestration efforts are not undone after the term ends. However, since there are no carbon credits generated after the term ends, there is no financial incentive to require continued sequestration after that point. 

Legal Hurdles for the Real Estate System 

Unlike many subject matters of law that have been modernized, creating and conveying interests in real estate still occurs much like it did 100 years ago. Most people still refer to lessors and lessees as “landlords” and “tenants,” borrowing language from feudal England. Warranty deeds still use traditional legal descriptions, containing degrees, metes and bounds, that are indecipherable to most landowners. As a result, transfers of interests in property often require timely and costly investments in surveys, title work, and real estate attorneys.

Companies wanting to enroll millions of acres of farmland into carbon sequestration programs have chosen to ignore this legal machinery. It is too slow and too costly to enroll land to conduct a title search, obtain a survey, and sign a recordable lease or easement agreement. Instead, brokers use online sign-up forms and GPS-based field descriptions created with online mapping tools. 

Similarly, the proper way to require farmers to follow certain protocols on land would be to place a deed restriction on the affected land. Here again, the brokers forego deed restrictions and instead make the protocols a strictly contractual obligation between the farmer and the broker. 

The largest roadblock to using existing real estate mechanisms, however, is the county-based system for recording interests in land. The carbon brokers have chosen to ignore this notice system. This is not surprising, as the challenge to enroll thousands of acres in hundreds of local, county recording offices is insurmountable for any broker trying to establish a national or regional soil carbon program. The cost and complexity is just too high. 

Working around our existing legal system has consequences. The most notable is that the sale of enrolled land will not carry the obligation to sequester carbon—the protocols will not run with the land. Since nothing is recorded in the deed records, the obligations to the broker are not passed to the new owner. A new owner can choose to undo the efforts and release the sequestered carbon to atmosphere. 

The good news is that these are fixable problems. The time has come to modernize our real estate legal system, using real estate descriptions based upon GPS coordinates anyone with a smart phone can plot. Similarly, county deed records need to be moved to cloud-based recording systems, easily accessible to anyone. Though painful to reform such a long-standing legal system, the result should lower the transactional costs to convey interests in property, a benefit to all landowners. 

Carbon contracts are exposing farmers to a new type of farming that involves generating not just crops but carbon credits. These contracts are also exposing the problems with our legal system for conveying interests in real estate. Climate change is a problem that requires solutions from everyone. As lawyers, we can do our part too by modernizing how we convey interests in property. 

This article originally appeared in the America Bar Association’s Agricultural Management Committee’s Newsletter. By Todd Janzen (Copyright 2022)

Janzen Ag Law Blog
Rethinking Cloud-Connected Machines in Times of International Conflict Tue, 12 Apr 2022 10:38:26 +0000 My car recently did an over-the-air update of its operating system, directly downloading new software from the manufacturer’s cloud-based mothership.  This is great for me, as the car’s own, since the manufacturer can address bugs remotely without me having to take the car to the dealer. But the war in Ukraine has also made me rethink the risks that come with connecting everyday machines to the cloud. What if the cloud connection became a source for negatively impacting machines?

Most any subscription based software application will bar access or reduce functionality if the subscription fee is not paid. This seems logical.

The war in Ukraine has made me rethink how cloud connectivity might play out during global conflicts.

Western manufacturers could intentionally turn cars, tractors, airplanes and other cloud-connected modern machines in Russia into useless lumps of steel.  These manufacturers could send over-the-air updates that effectively immobilize their machines. For example, John Deere could, in theory, send an over-the-air update to its most modern tractors in Russia that makes these machines immobile—at least until hackers figured out a work-around.

This could move from a theoretical to a real question if Russia decides to nationalize western assets that companies left behind.  For example, Russia has threatened to nationalize aircraft left behind by western countries. There is no doubt the Russians can seize factories, but a better question is whether the country can seize cloud-based equipment? I have no doubt that if Tesla sold cars in Russia, Elon Musk could absolutely brick the entire fleet.

Another question is whether western companies could be forced to brick their cloud-connected equipment in Russia to comply with sanctions. Can the US government compel US companies to brick their cloud based machines? This raises constitutional issues, as such a mandate might be considered a taking without compensation (assuming there was no compensation from the government imposing the mandate).

Similarly, many devices and machines today also have the ability to use geo-fencing. DJI drones, for example, have geo-fencing that prevents them from operating in the no fly zones near airports. If the Russian military is using DJI drones to scout Ukrainian positions, could DJI set up new geo-fences to prevent these drones from working in Ukrainian cities that are under Russian occupation?

Imagine too, that modern militaries may be re-supplied with commercial trucks that bring fuel, food, and armaments for troops. If the Russian government used German trucks to resupply the front lines, could the German government require its truck manufacturers to geo-fence these machines to keep them out of Ukraine? 

Cloud based machines are here to stay, but let’s think through the implications and consequesnces of using these machines in times of international conflict.

Janzen Ag Law Blog
Ukraine's Impact on Global Agriculture Fri, 18 Mar 2022 01:46:41 +0000 We may want to buy locally produced food, but the reality is that agriculture is a global enterprise. Disruptions in agriculture across the globe create ripples in agriculture elsewhere. When major disruptions happen to major food producing regions—like Ukraine—the impact too will be enormous. I recently attended the National Ag Law Center’s seminar on the international Trade Implications from the Ukraine invasion by Russia.

Russia is a major player on the international fertilizer market, according to Corey Rosenbusch, president of Fertilizer Institute. Three of the largest fertilizer manufactures in the world are Russian-based, Uralkali, Eurochem, and PhosAgro.  Each of these is headed by a oligarch that has been sanctioned by western governments. Even if the Russians can continue to ship fertilizers out of the country, getting payment is extremely difficult due to banking sanctions. Here is how Russia compares to the US and other countries when it comes to fertilizer production:


Dr. William H. Meyers, Ag Economist from Missouri University, explained that Ukraine and Russia are enormous grain exporters.  This is well known today, but it is interesting to see just how much Ukraine’s exports have increased in the last few years.

Ukraine’s production impacts in 2022 are going to be felt around the world. For some countries, the prices for food will be significantly impacted. For others, there may actually be food shortages. Here was a graph shared by Dr. Meyers explaining the potential impacts to other countries.

Professor Mariia Bogonos, Kyiv School of Economics, explained that the impact inside Ukraine is already severe for farmers and consumers. If the Russian invasion moved no further than it has already, there are many parts of Ukraine that will not be able to plant this year’s crop or harvest existing winter wheat, reducing production by about one-third. Since much of Ukraine’s fertilizer comes from Belarus, it seems highly unlikely there will be enough fertilizer for crop needs. If the Black Sea ports remain closed to exporting, much of the exports could still leave the country by truck or rail, but costs of shipping go up significantly. Diesel fuel could also be a problem, but the Ukrainian government is working to fix this concern.

Finally, though not part of the seminar, you can follow along with a farmer inside Ukraine that posts regular updates on conditions on the ground. A Dutch Farmer in Ukraine is a blog posted by Kees Huizinga, who is exactly who he says he is. He wrote recently:

If the war does not end before the end of March, there will be no more exports from Ukraine after the summer of this year. This will especially affect the already unstable countries of North Africa and the Middle East. Food prices could easily double from January 2022 prices, making bread unaffordable for the people of these regions.

Russia has already closed its borders to wheat exports and Ukraine’s exports have been effectively closed due to the closure of Ukrainian ports by Russian warships.

Continue reading on his blog or follow him on Twitter for more updates: @DutchfarmerinUA.

Janzen Ag Law Blog
War Changes Everything. Thu, 10 Mar 2022 23:42:27 +0000 About 30 years ago, I was lucky to take a trip across Ukraine as part of a college history course.  We visited Kyiv and Zaporizhzhia.  We visited former German towns in southeastern Ukraine where my ancestors farmed before leaving for the Kansas Great Plains in the 1870s. Ukraine was a very poor country during my visit, just emerging from Soviet control. But seeing the thousands of acres of open farm fields, I knew this country would someday rise to prosperity.  

Like you, I am devasted by what I see on the news. We may want to look away, but we all must face the reality that “the world we now live in is not the one we knew before.” (German Chancellor Olaf Scholz).

It took western governments who must defend their own citizens a few hours to realize that the world had changed with the invasion, resulting in very quick, crippling economic sanctions against Russia.   

It took big tech a couple days to realize the new reality caused by Russia’s invasion.  Apple, Google, Meta and others all pulled out of Russia.

Multinational food corporations—McDonalds, Starbucks, Coca-Cola, etc.—have been slower to wake up to this new reality. Admittedly, I recognize they face the quandary of wondering whether leaving Russia results in punishment of ordinary citizens, many who likely do not understand, support, or even know about the Ukraine invasion. Ultimately, the moral price of staying in Russia outweighs the economic price.

Farm equipment manufacturers operating in Russia have been slower to respond, at least publicly.  Many have invested billions into building farm equipment in Russian factories. Russian threats to nationalize any factories from corporations suspending operations must be causing pause. As the civilian deaths mount in Ukraine, the situation will become untenable. They will leave too, I think, once they fully confront this reality.  (John Deere already stopped shipping new equipment into Russia). 

Accepting this new reality is hard. Much has already been written about effects in commodity, fertilizer, and trade markets. Ag tech, too, will see the effects of the war in Ukraine. Gone are the days of having solutions look for problems to solve. Instead, ag tech must immediately shift to focus on increasing global food production and boosting domestic energy sources. These are the priorities of the new world reality.

I hope to return one day to see Ukraine and see it once again as the breadbasket of Europe. But for now, more than anything, I hope that the senseless killing and displacement of innocent people comes to an end.


Janzen Ag Law Blog
Making Hay: A History of Hesston Corporation Fri, 25 Feb 2022 01:51:40 +0000 I love reading corporate histories, especially when they are about agribusiness. I just finished Factory on the Plains: Lyle Yost and Hesston Corporation, which tells the story of Hesston farm equipment from its humble beginnings through the eventual consolidation with AGCO. Having spent much of my teenage years cutting hay in a Hesston Swather, I found this history particularly interesting. 

Hesston 6600 Swather

Hesston Corporation began almost by accident. Lyle Yost, a Kansas farmer and early custom harvester, was frustrated by the long unloading times required by 1950s combines that used gravity flow to empty their grain bins.  With the help of local welder, he fabricated an unloading auger to mount onto the side of his combine and speed up unloading. It worked, and he was quickly flooded with requests from other combine owners who wanted to buy unloading augers. He hired a number of local farmers to fabricate augers when not busy on the farm, and Hesston Corporation was born.

In a few years, all combine manufacturers would incorporate unloading augers into their designs, and Hesston sought new ways to help farmers. This theme—increasing the efficiency of farming—continued to drive the purpose of the company. The company acquired the design rights to a hay windrower—the swather—from an Iowa farmer who had designed and built his own hay machine. Production was moved to Hesston, Kansas, and upscaled. The swather was a hit, revolutionizing how hay was cut and cured for thousands of farmers and ranchers. Hesston continued to focus on haying equipment for the next two decades.

Hesston later branched into other market segments by acquiring smaller companies, improving their products, and streamlining production.  By the mid 1970s Hesston was the ninth largest farm equipment manufacturer and the United States’ leading manufacturer of haying equipment. It sold haying equipment in across the globe.

However, in 1976 the agricultural market entered a long, downward trough that would continue for nearly a decade. Farmers decided to hold onto equipment longer and dealer lots were filled with equipment that wasn’t selling. Hesston avoided bankruptcy by selling a controlling interest in the company shares to Fiat Corporation of Italy.  Yost and other founders retired or lost their board seats. Hesston would never again be controlled by its founders. Today, it is a subsidiary of AGCO.

Hesston’s story tells a similar story to other farm equipment companies (John Deere, Kinze, Vermeer). These companies were started by entrepreneurs who wanted to solve specific problems on the farm. Demand for their solutions pushed them to start companies to mass produce their fixes.

In a world where venture capital often looks for problems to solve with existing solutions, it’s refreshing to read about how one entrepreneur did the opposite, working hard to find solutions to farmers’ problems.

Janzen Ag Law Blog
A Deeper Dive into the New Autonomous John Deere Tractor Wed, 05 Jan 2022 15:23:04 +0000 John Deere’s introduction of a commercial-ready autonomous tractor is a big deal. According to the press materials, the tractor is fully capable of cultivating a field by itself without a driver. This is a big first step to fully driverless farm equipment. But it also left me with some lingering questions.

What level of autonomy is the tractor? As on-road vehicles march towards full autonomy, the automotive industry seems to have settled on using the SAE’s Levels of Driving Automation for benchmarking the capability of particular vehicles for self-driving. Level 0 means no driver aids. Level 5 means the car is fully autonomous and does not ever require human intervention. The most advanced self-driving cars today have achieved level 3, which is full self-driving but with an alert human ready to take over control when something goes wrong. The Deere autonomous tractor seems to be at this level too, although the SAE levels are admittedly not a perfect fit for agricultural vehicles.

Can the tractor drive itself to the field without a driver? I don’t recall John Deere addressing this in the announcement, but it appears that the tractor will still need a human to drive it to the field. Perhaps that is why a driverless tractor still requires a full cab. If the tractor can be driven remotely, it seems that it could also be driven to the field remotely, although most likely this would not be legal (and in many instances not safe). Does the tractor automatically shut off all driverless systems if it is outside of field boundaries?

Is the autonomous tractor’s use limited to just tillage applications? The reveal video focused on tillage applications. Given the trends towards no-till and strip-till, I found this odd. Why is the most sophisticated tractor only doing the least sophisticated activities and not planting or side-dressing nitrogen? I think there are two reasons. First, the many activities such as planting or nutrient application may require an operator’s license. A driverless tractor has no license and thus faces legal hurdles to do things like apply pesticides or fertilizer. Second, tillage requires the least constant monitoring from he operators. It is the easiest in-field activity to automate. For this technology to advance, however, we are going to have to increase its in-field uses.

Why did Deere forgo Lidar? The tractor appears to use only stereo cameras for scanning its surrounding. This makes its usability fully dependent on visibility. Will the system work in inclement weather? To tackle this problem in the automotive space, some driverless car systems are also using Lidar. I am curious as to Deere’s decision not to use Lidar here.

Can the farmer also drive the tractor remotely by smart phone? When the tractor encounters and obstacle in the field it will stop and alert the farmer on their smartphone. The farmer can presumably see the issue and tell the tractor whether to continue or not. But can the farmer also take the wheel, sitting miles away in their office, and drive around the obstacle in the field?

Why does the tractor look so conventional? A few years ago at Agritechnica John Deere unveiled a truly unique driverless concept—a two-tracked pulling machine with no cab and not place for a driver or rider. I would be interested as to why Deere chose to use a conventional tractor platform for this driverless machine. I assume that is because most farmers will still use the tractor in other driver-required applications, and because it is easier to adopt small incremental technology changes than radical new ones.

If you know the answer to any of these questions, please post in the comments or send me an email.

Janzen Ag Law Blog
What was Revealed at the John Deere Autonomous Reveal? Tue, 04 Jan 2022 16:43:27 +0000 John Deere and other brand tractors have been on a steady march towards autonomous driving since the introduction of GPS guided steering (autotrac) was introduced in the mid 1990s.  In recent years, tractors have added automated headland turning, machine-syncing that connects multiple machines in the same field, and real-time cloud connectivity. Most of hardware existed for fully autonomous planting or cultivating a field, but full autonomy remained elusive.

There have been many off-field farming robots, like robotic milking machines, that are stationary autonomous machines. And there have been start-ups working on autonomous farming and pilot projects from legacy agricultural companies in the past, but no one has widely commercialized a fully autonomous in-field machine for multiple tasks.  In-field autonomy presents unique challenges because of the unknowns the tractor might encounter in a field that were not there the year before. 

John Deere claims to have addressed these challenges with the new 8R fully autonomous tractor. The tractor was revealed at the 2022 Consumer Electronics Show in Las Vegas. The major new technology in this tractor is multiple “stereo” cameras that scan in all directions, combined with cloud-based machine learning and artificial intelligence to understand what the cameras are seeing. When the tractor encounters an image that is not identifiable from the machine learning database, the tractor will stop and alert the farmer of a problem. The farmer can address the problem from his or her smartphone and send the tractor back to work or resolve the problem some other way. This type of situational awareness is what existing guidance technology lacked.

Deere claims the 8R autonomous tractor is ready for production and will be available later this year. This is not a demo but “commercial ready” technology.  The tractor does not appear ready to navigate itself from the farmstead to the field, as that is another technological problem automotive manufactures are still trying to solve.

Still, it’s all very exciting.  My only let down is that Deere choose not to brand this technology with a name like Siri or Alexa.  Wouldn’t it be great to tell your tractor, “Hey John, go plant the 80 acres behind the old schoolhouse.” Maybe that feature is still coming.

You can see the full presentation here:  John Deere Autonomous Tractor Reveal.

Janzen Ag Law Blog
The Year in Reverse 2021 Fri, 17 Dec 2021 18:36:27 +0000 One of my favorite times of the year is the end of the year. I like to take some time to look back at what happened and reflect about how things have changed as we all made another trip around the sun. As far as 2021 goes, the year was all about how farms are rising to challenge presented by climate change. Here is my list of the most read and discussed articles from my ag tech blog in 2021.

Understanding Carbon Credits. Much ink was used this year in the farm press talking about carbon credits and how farmers can profit from generating them. One of my most visited articles explained what a carbon credit is, who generates them, and who buys them. I follow this up with another article describing exactly how much carbon dioxide a carbon credit offsets in real world units of measurement. For example, I need to buy about 5 carbon credits each year to offset the emissions from my gas-powered vehicle.

Soil Carbon Contracts. The carbon credit market is already trickling down to farmers and ranchers. The soil carbon contract is the legal method that carbon credit brokers are using to generate carbon credits from farmers and ranchers. I examined the six key components of a soil carbon contract. These contracts are not simple and create some legal gray areas, such as unrecorded restrictions on the use of land. This made me wonder, will these contracts cause us to update some antiquated real estate laws?

Dairy Digesters. The dairy industry was bombarded in 2021 with opportunities to build anaerobic digesters on farms. The biogas production facilities are an amazing way to turn manure into a green fossil-fuel alternative. Most people are surprised to learn that midwestern dairy cows are powering trucks in California.

Using Ag Data in the Courtroom. 2021 was also the first time that we used ag data (planting data, combine yield data, soil data, drone photography) to prove crop damages in a courtroom trial. Our case involved intermittent flooding of numerous farm fields over numerous years. Without ag data, proving the yield losses would have been impossible. With ag data, we won!

Thanks for reading the Janzen Ag Tech Blog this past year. Best wishes for 2022.

Janzen Ag Law Blog
Farm Emissions and Carbon Math Wed, 08 Dec 2021 19:15:11 +0000 I recently have been talking to farm groups about how farmers can generate and sell carbon credits by building up carbon in their soils. I always start this discussion by explaining that a carbon credit can be generated for each additional metric tonne of carbon dioxide (CO2) that a farmer can cause to be stored (sequestered) in soil. For reference, one metric tonne is 2,205 lbs. or about as a really small car. A Fiat 500, for example, weighs about 2,300 lbs without a driver. So how much C02 is generated by typical human activities?

The EPA states that an average passenger vehicle generates 4.6 tonnes of C02 per year. If you want to be more accurate, you can visit the EPA’s website. My old 1999 Toyota Landcruiser generates 9.9 tonnes per year; a new 2022 Ford F-150 generates 6.8 tonnes; and a Toyota Prius generates 2.6 tonnes (assuming 15,000 miles/year mixed highway/city driving). So to offset the emissions from these fossil fuel burning vehicles, you could purchase the equivalent number of carbon credits from a reputable source. I would need to buy 9.9 carbon credits to offset the emissions from my Land Cruiser for one year. One takeaway here is that newer machines are often far more efficient than old ones (new F150 is also more powerful than my old Landcruiser).

The last time I purchased a flight, I had the option of purchasing an offset for the airplane “tailpipe” emissions. According to American Airlines, my 10-12 hours of travel roundtrip from Indianapolis, Indiana, to Raleigh, North Carolina would generate 1.89 Tonnes of C02. To put that in perspective, that single round trip ticket was nearly the same as driving a Toyota Prius for an entire year.

The American Airlines offset also put a price on what it would cost to buy a carbon credit today. The cost on the American website was $7.60 per Tonne. To buy offsets for the roundtrip ticket is $14.36. The cost to offset the Prius for an entire year is $19.76.

This had me wondering how much CO2 farm equipment produces. Fortunately, New Holland has a calculator that allows you to roughly estimate CO2 emissions from tractors. A modern 300 hp Tier 4 tractor operated for 200 hour per year would generate 51,950 lbs of CO2. That equals 23.5 metric Tonnes per year. (An older tractor is much worse). A farmer with the modern tractor could offset his or her emissions by purchasing 23.5 carbon credits for $179.06 (at today’s price).

So what does this all mean? First, airplane emissions are enormous when compared to diesel and gasoline powered vehicles. Second, from an environmental standpoint, decreasing CO2 produced is just as important as sequestering existing CO2. While many companies are willing to pay farmers to sequester carbon in soil, similar offsets could be achieved by paying farmers to upgrade their equipment to more efficient models.

If someone is willing to pay me to replace my old Landcruiser, please contact me at the number below.

Janzen Ag Law Blog
The Six Building Blocks of a Soil Carbon Contract Fri, 05 Nov 2021 19:49:31 +0000 Carbon is number 6 on the periodic table and is made up of six building blocks—six protons and six neutrons. Contracts too, have their own building blocks. Because there are a flood of new contracts being offered to farmers to sequester carbon in soil, I thought it would be interesting to look at the six basic building blocks for these contracts.

  1. Enrollment of land.  Whether it’s an 80 acre corn field or a 1000 acre grazing pasture, the first part of any soil carbon contract is the enrollment of land into the program. Farmers and ranchers must identify which land they are committing to carbon sequestration and enroll that land in a soil carbon sequestration program. These programs are being offered from a variety of parties, from ag retailers to online digital platforms (“carbon platforms”).

  2. Mandated farming practices. Land that is enrolled in a carbon sequestration program is committed to following certain prescribed farming practices, such as no-till and cover-cropping. These carbon reduction “protocols” are provided by the carbon platform to the farmer or rancher. One unique aspect of these protocols is that they are often like the terms of service for an online platform in that they can change from year to year.


  3. Data collection.  At least annually, the carbon platform collects agricultural data from the farmer to confirm the protocols were followed and to estimate the amount of carbon sequestered. The carbon platform may also reserve the right to collect its own data by taking actual samples, auditing the farmer practices, or using satellite imagery.


  4. Verification. The carbon platform uses protocols developed by third parties who have created the methodology for sequestering and measuring carbon in soil. Verification is necessary to measure how much carbon has been sequestered in soil so that carbon credits can be generated by the farmer’s efforts.  


  5. Prohibitions on Stacking. However, a farmer who sequesters enough soil carbon to generate 100 carbon credits could, in theory, sign contracts with two carbon platforms to measure the same soil carbon on the same acres. The result would be 200 carbon credits when only enough carbon was sequestered for 100. For this reason, soil carbon contracts prohibit this sort of “stacking,” but also rely on the honesty of the farmer to ensure that no stacking occurs. Since there is no national database for enrolled acres, there is no way for a platform to verify that no stacking has occurred.  

  6. Sale of Carbon Credits. At the end of the process, the carbon credit is ready for sale by the carbon platform to a buyer that wants to offset its carbon emissions. Some carbon platforms share in these profits. Others brokers pay a flat fee per acre, keeping all of the profit from market swings in the carbon market but also all of the risk. 

Of course, soil carbon contracts are much more complicated than these six building blocks. But if you are drafting or reviewing one of these contracts, make sure these six elements are addressed.

Janzen Ag Law Blog
Using Midwestern Dairy Cows to Power California Trucks Mon, 27 Sep 2021 16:04:20 +0000 In the past two years, I have reviewed more contracts related to construction of anaerobic digesters than in prior two decades of my career. For years, the financial case for building these mini power plants did not exist. The upfront costs outweighed the long-term financial benefit for all but the largest livestock farms. But about two years ago, the cost/benefit analysis tipped the other way. As a result, today there is coming wave of new anaerobic digesters on midwestern dairy farms. 

More remarkable, these new digesters are generating biogas that, rather than being used locally to generate electricity, is instead pumped into existing natural gas pipelines that crisscross the United States, ending in terminals on the western seaboard. Trucks in California will be literally fueled by cow manure from Indiana dairy farms. 

What happened that pushed this technology over the hump?  In past few years, California adopted a low carbon fuel standard (LCFS) that creates incentive credits for biogas that is converted into renewable natural gas (RNG).  Oil giants like BP and Shell are working to find ways to reduce their climate change impact, and buying RNG is one way to meet the LCFS. Biogas from anaerobic digesters has a two-fold benefit—harvesting methane from dairy manure reduces a atmospheric methane, a greenhouse gas that otherwise would have been released to the atmosphere, and by powering vehicles that otherwise would have been burned fossil fuel.

anearobic digester.jpg

Why dairy farm manure?  Dairy farms are uniquely situated to meet this demand because dairy cows produce a lot of manure and many live in large barns that are regularly cleaned of manure anyway. Lots of manure in one place can be a good thing when the byproduct is harvested methane.

Skeptics will see this wave of digester construction as a fad driven by the current interest in climate change. But as someone who has followed the dairy industry for years, I see it as part of a much larger trend. California dairies were largely the first to incorporate biogas technology on a widespread basis due to their size and proximity to the demand. But they have not filled that demand, and so the digester wave moved to neighboring states. Now it has reached the Midwest. And all of this is happening before any additional states adopt their own LCFS, which could accelerate the trend even more.

Raise a glass of milk and toast to dairy’s green future.

Janzen Ag Law Blog
Rethinking Carbon's "Additionality" Requirement Fri, 20 Aug 2021 14:32:20 +0000 To generate a carbon credit, a producer must demonstrate a metric ton of C02 (or its equivalent in greenhouse gases (GHG)) was sequestered in soil because of the farmers’ efforts. Seems simple enough, but there is usually another requirement called “additionality” that makes this more challenging for many farmers already implementing conservation practices.  

Here’s how “additionality” is often defined:

GHG reductions are additional if they would not have occurred in the absence of a market for offset credits. If the reductions would have happened anyway – without any opportunity for farmers to sell carbon offset credits – then they are not additional. – Ohio Soybean Council.

The point of “additionality” is that carbon credit buyers don’t want to pay someone to sequester carbon if they were going to do it anyway. In forestry, it makes no sense to pay someone to plant trees if they were planning on doing it anyway. That would result in no net decrease in CO2.  But paying someone to plant trees who otherwise would not have and you have more trees, a net decrease in CO2.

Planting soybeans into cover crops.

Planting soybeans into cover crops.

Translating this to row crop farming, two of the practices most commonly sought for carbon soil sequestration are no-tilling (not disturbing the soil which releases CO2) and cover cropping otherwise fallow land (which pulls more CO2 out of the atmosphere outside of the growing season).  If you pay a conventional farmer to convert acres from tillage/no cover cropping to no-till/cover cropping, there should be a net increase in soil carbon sequestration. Pay a no-tiller/cover cropper to do the same thing they would anyway and, in theory, no increase in soil carbon sequestration.

Many farmers have pointed out that this system creates an ironic situation where farmers who have been farming with the desired practices for years are excluded from the financial benefits of carbon farming. Bust out the moldboard plow, however, and you become eligible for carbon payments in the years that follow. 

That makes no sense. Requiring “additionality” for row crop farmers overlooks that farmers decide every year how they are going to farm. On any given year, a farmer could decide to return to intensive tillage. Corn and soybeans—unlike trees—are annuals. A farmer that has practiced no-till and cover cropping for years and decides to do so again this year is sequestering carbon.   

Protocols for soil carbon sequestration need to rethink how additionality works with farmers planting annual crops. If the goal is widespread adoption, we must reward everyone that undertakes the practices desired. 

Janzen Ag Law Blog
An Interview about Row Crop Machinery Technology Tue, 10 Aug 2021 12:57:24 +0000 I was recently interviewed by Tim Roy, ASA Capitale Analytics, for The Journal of the International Machinery & Technical Specialties Committee of the American Society of Appraisers (The MTS Journal). The interview focused on ag tech in row crop machinery and is republished with permission below. *Footnotes were added by the MTS Journal.

TIM ROY: “Ag tech” is a broad field. Our focus here will be technology commonly found in row crop machinery, such as combines, tractors, and planters. It seems like some type of guidance or auto operation system is now present on every major piece of machinery. Do you have a sense for whether this trend has been driven more top-down by OEMs introducing new technology, or bottom-up by user demand?

TODD JANZEN: The advancement has come from both directions. Farmers are often viewed as having a conservative mindset, but in reality, they aren’t scared to try something new. When GPS guidance systems became affordable, they had an immediate positive impact for farmers in saving time, fuel, and other inputs. That has helped encourage the market to ask for and accept other kinds of new technology, which has in turn encouraged OEMs to continue developing new technologies.

Have you seen more advancements from large OEMs or small tech companies?

Agricultural machinery has experienced a recent history similar to other heavy industries. Dozens of regional OEMs have steadily consolidated for the last century, leaving only a few major players.* This contributed to somewhat of a slow evolution in technology, as large corporations offered incremental advancements and focused on protecting their market share as opposed to investing in risky – but potentially revolutionary – technology.

Tech startups backed by venture capital started really shaking up the marketplace in the past 10-20 years. Early guidance systems and automation technology were aftermarket accessories. Major OEMs have responded to user demand by buying the tech or developing their own versions of it, and integrating the systems directly into their new models. The OEMs have also created venture capital groups to fund new tech startups under their own umbrellas.

As of yet, there is no “Tesla” of tractors which presents a real potential threat to the major row crop machinery OEMs. But otherwise, the pattern of outside innovation and OEM response has been similar to auto manufacturing.

*John Deere leads the North American row crop machinery marketplace, followed by CHNI (New Holland and Case IH, among other brands) and AGCO (Challenger, Massey Ferguson, et al). (Sources: Market Research Reports; Statista; Markets Insider)

It is easy for us as appraisers to spot the interfaces and control boxes on the machinery itself. What other kinds of investments are required that we may not see when inspecting machinery?

The modern systems are mostly software and cloud-based. There may be servers and other hardware in the office that sync to the hardware on the machinery, but the major investment will often be in the software and system upgrades. Perhaps the more significant support investment is being required of machinery dealerships, which now need to support the technological as well as the mechanical side of the machinery. This requires a different set of tools, employees, and training programs than they traditionally employed.

There was a popular news story out of Minnesota last year about rising auction prices for 40-year-old “pre-tech” John Deere tractors.* You blogged about the story and expressed your opinion that farmers were not necessarily rejecting new technology, but rather did not feel that the incremental advancements offered by OEMs in the past few decades justified the high price tags on new machinery. Do you still hold that opinion?

Yes I do. Farmers all want higher yields and more efficiency. But in some circumstances – particularly for smaller operations – the skyrocketing price of new machinery has not been justified. A pre-tech tractor is easier and cheaper for the farmer to maintain in-house, and aftermarket guidance systems can provide modern efficiencies without a full OEM integration. Like most tech, these kinds of systems have become very affordable.

However, I do believe that the trend will run its course eventually. It will get harder to find parts for the old machines over time, and things like electrical hookups for new attachments and implements will become ever harder to retrofit to old machinery. At some point the costs of new machines will be justified by their efficiencies and ease of use, even for small operators.

*Belz, Adam. “For tech-weary Midwest farmers, 40-year-old tractors now a hot commodity: Tractors built in 1980 or earlier cause bidding wars at auctions.” StarTribune [Minneapolis], January 5, 2020. 

The “Right to Repair” movement has been a part of this conversation as well. John Deere in particular has been criticized for not allowing farmers to modify or maintain newer machinery without dealer involvement. Do you have a sense of where this conflict is headed?

John Deere has caught a lot of flak, but in reality this is a society-wide issue. Elon Musk said that a Tesla is not really a car but rather “a sophisticated computer on wheels.” We could say this about many of the items we use every day – cars, phones, appliances, and so on.

I sense that eventually it will become a moot issue. Do you really want to hack into your iPhone and risk ruining it? How many people want to repair their own car anymore? Farmers who make major investments in high-tech machinery will probably come to feel the same way.

Do large consolidated farms care about the “Right to Repair” movement? Or is this an issue only among smaller independent operators?

Of course I can’t speak to every situation, but my sense is that in general, larger operations are going to view machinery as a regular input cost as opposed to an owned asset. They will be more likely to lease machines or cycle through them quickly in order to get the latest efficiency upgrades with new machinery, as well as to reduce downtime. The largest operators will keep system techs on staff just like they keep mechanics on staff. They will have close relationships with dealers who will help resolve any issues their machinery.

Smaller operators may be more likely to look at machinery in the traditional sense: as an owned asset to be purchased, paid off, and maintained over a long duration. It seems logical that these operators are more likely to want to have the right to maintain and modify their own machinery.

Instead of continuing to pay top dollar for 40-year-old tractors, I would not be surprised to see farmers turn to “open source” control systems, small electric tractors, and other affordable new tech machinery built specifically for the next generation of tech-savvy independent operators.

As we’ve already touched on, farming is transitioning (like most industries) into a marketplace of very large and very small operators. Where does tech fit into this transition?

This transition is being caused by many factors, including government policy, global trade economics, land value trends, and shifting generational perspectives about farming. Tech is integrated into every one of these factors, and into every aspect of farming and farm ownership, just like it is integrated into everything else in modern society. Farms of any size can operate more efficiently with less labor and higher yields than ever before. In some instances, new technology helps smaller operations become competitive with larger ones, such as robotic milking machines that keep small dairies in business. In other areas, new technology benefits larger operations that can afford the initial investment. Tech in and of itself is not really causing this divide.  

You recently wrote about “swarm farming” – fleets of small field robots replacing traditional large machinery. Is this something that you expect to see in practice in the near future?

Farmers are usually willing to give new ideas a try. Swarm farming has potential for many reasons. It is easy to scale up and down for different operation sizes. It reduces man-hours in the field. It can be extremely precise – one robot can head out to apply inputs to a small area without disturbing the rest of the crop. A broken down unit does not stop the entire activity since other units continue to operate. Compared with big and heavy machinery, small and lightweight robots don’t compact the soil or sink into the mud as much. There are many potential advantages.

However, my point was not so much that any one technology is going to become widespread. My point instead was that the next generation of farm machinery might not look anything like what we’re used to. Many of the current visions for autonomous tractors coming from major OEMs look pretty much like a regular tractor without a cab. Is this practically necessary, or is this just meant to ease the transition for operators from a psychological standpoint? Perhaps the next generation of farm machinery will represent a completely fresh operational philosophy.

This article was originally published in The Journal of the International Machinery & Technical Specialties Committee of the American Society of Appraisers, Vol. 37, Issue 1, Summer 2021. Special thanks to Tim Roy for taking the time to conduct the interview and put this article together.

Janzen Ag Law Blog
Are NFTs the Answer to the Ag Data Ownership Question? Fri, 16 Jul 2021 12:34:02 +0000 For years, farmers have asked, “Who owns my ag data after I share it with an ag tech company?” This has not been an easy question to answer as a lawyer because: (a) data is intangible; (b) data can be replicated infinitely with exact copies; (c) ownership of data is not established by statute; and (d) case law takes years to catch up with technology and so we are still a long ways from having our courts answer this question. The answer has therefore always been—ownership depends on the rights in the data contract.

Non-Fungible Tokens, or “NFTs,” have the potential to alter this ownership discussion. NFTs allow people purchase and own “original” digital content. One popular source of NFT examples is the website NBA Top Shot, that sells anyone the right to own videos of their favorite NBA stars in action, e.g. a digital video of Kevin Durant’s dunk #484 on May 16, 2021 can be purchased, at the time of this article, for only $1,090. You receive an NFT that recognizes your ownership of this digital content. That also means you could, presumably, sell that NFT to your friend, a big Kevin Durant fan, for a profit.

But what exactly is an NFT?

Julian Pipolo writes in Law Technology Today that an NFT is based upon three principles:

  • An NFT is a non-fungible token based on blockchain technology. Because it is non-fungible, it is not interchangeable. It is entirely unique. This is in contrast to a dollar bill or a bitcoin, both of which are interchangeable with other bills or bitcoins.

  • An NFT is composed of software code in the form of “smart contracts.” Smart contracts are open-sourced blockchain protocols that control the transfer of digital currency under certain terms and conditions.

  • Once a smart contract is created, it is “minted” onto the token on a blockchain. This is permanent. Once the NFT is created, it cannot be modified or amended.

How might NFTs alter the ag data ownership discussion?

Because of the ease with which ag data can be replicated, it has been difficult to trust a promise by an ag tech company to respect a farmers’ ownership rights in their data. But if the ag tech company attached an NFT to a specific dataset that was uploaded to its servers, then conveyed that NFT to the farmer-data-originator, that company could, in essence, create a single, original dataset. Any subsequent copy, without the NFT holder’s permission or without transferring the NFT to the next user, could be a violation of that owner’s rights.

There are still lots of questions here from a legal standpoint and from a technology standpoint. At least for now, its fun to ponder whether NFT technology will provide an answer to ag data’s long asked question—who owns the farmer’s data?

Janzen Ag Law Blog
Using Ag Data to Prove Crop Damage in Court Sun, 27 Jun 2021 16:10:53 +0000 Farmers are given many reasons to collect ag data about their farming practices, but using that data in court rarely one of them. However, at a recent trial about crop damage, we proved just how useful ag data can be to help a court understand complex.

Our case involved a lake dam that had been mismanaged by the Indiana Department of Natural Resources (DNR). DNR established trigger levels for when to open and close the dam, but these trigger levels raised the summer lake level significantly. This was a big problem, as farm field drainage tile in the area was designed for the lower (and correct) lake level. Raising the lake level made this tile ineffective and fields would flood when they could not drain after significant rainfall events.

Before the advent of precision ag and data tools, proving intermittent flooding damages on a field would have been very difficult. For example, a 100 acre cornfield might have had 20 acres underwater, with little yield, but if the rest of the field yielded 240 bushels per acre, the average for the entire field would have been 192 bu./acre. Not record breaking but not horrible.

Using ag data told a different story. With harvesting data, the court could see exactly where the flooded areas of the field were and how flooding affects yields. Below (left) is an example, showing the lower yields in red and better yields in green, and few areas with no yield. On the right, the same data is overplayed on soil type and averaged to show that flooding, not soil type, was the reason for the drag in yield in parts of the field.

Screen Shot 2021-06-27 at 11.17.21 AM.png

We also used drone photos to ground-truth the data. Here is a photo of the same field on the same year about halfway through the summer, showing the flooded areas as light green. The combine yield data confirmed the impact that was obvious from the sky.

Screen Shot 2021-06-27 at 11.11.26 AM.png

Our case was complex because crop damage and yield loss were highly variable across different parts of the affected fields. One part of the field would yield well, while another part would yield little or nothing. Without ag data, telling this story would have been difficult, if not impossible. We also used data from nearby fields that did not drain into the lake to show what the yield would have been, but for the elevated lake level. Ultimately, the court agreed that raising the lake level impacted our client’s farming operation:

The data from the affected fields shows a reduced or no yield in many places when compared to the non—affected fields. The soil types in affected and non—affected fields were planted and fertilized the same (i.e., Ackerman soils received the same seed and chemical treatments). The different soil types did not explain the different yields between affected and non-affected fields. Instead, the yield difference is caused the dam mismanagement. Keeping the dam closed caused the water level at the lake to rise, which pushed water into the tile or prevented the tile from draining into the lake.

At trial, the court awarded our farmers $485,644 in crop loss and field tile damages.

We may not think of ag data as having an evidentiary value in court, but I cannot imagine a case about crop damages without it.

Janzen Ag Law Blog
Who is the Ag Data Watchdog? Wed, 26 May 2021 11:43:07 +0000 A reporter for a national publication called me recently to ask some ag data questions. One of his questions was: Who is the ag data watchdog for farmers? Stated differently, who is looking out for farmers to make sure their data is not misappropriated?

It was a great question.

There is really only one organization that is looking out for farmers’ best interest when it comes to ag data—Ag Data Transparent (ADT). The ADT certifies companies that commit to be transparent about how they collect, store, use, share, and delete farmers’ agricultural data. The ADT has made great strides in the last few years certifying nearly 30 ag-tech and ag industry legacy companies. The companies that go through the process come out with contracts that are better and easier to understand.

The ADT is supported by National Farm Bureau, National Farmers Union, and national commodity organizations for corn, soy, wheat, potatoes and pork. These organizations are ag data watchdogs for their members too. But watchdog does not mean police dog. None of these organizations can police how ag data is used.

That means, ultimately, there is no consumer watchdog organization looking out for farmers when it comes to how their ag data is used. I tell farmers every time I speak on the subject of ag data that the terms of the contracts they sign with ag data companies matter. We have all gotten so accustomed to clicking “I accept” without reading what we are accepting when signing up for a digital platform. I am guilty of this too. But when it comes to ag data containining a farms’ proprietary information, the terms really do matter.

Other industries have consumer protection groups that report abuse and look out for their consumers. When it comes to agricultural data, however, the ADT and its supporters are the lone, ag data watchdogs.

Janzen Ag Law Blog
Maybe Carbon Contracts Will Finally Convince Us to Update Real Estate Laws Fri, 07 May 2021 16:18:08 +0000 Real property law is probably the most antiquated of all legal subjects. Many legal subject matters have been through periods of modernization, when lawyers, judges, and legislatures worked together to update laws for the times. For example, commercial law was modernized in the 1950s when the Uniform Commercial Code (UCC) was published as a model act. Most states subsequently passed legislation adopting this new framework for resolving commercial disputes. This not only replaced old common law, but more importantly, the UCC reduced an enormous burden on any company doing business across state lines. The outcome of a commercial dispute in a state that adopted the UCC became more predictable.

But real property law—our system for describing, owning, and transferring interests in real estate—continues to exist in the legal dark ages. After all, we still call people who rent property landlords, as if tenants are still some kind of medieval serf.

That brings us to 2021, when many companies are rolling out carbon removal programs that ask landowners and farmers to use their land as carbon sinks. As these companies rush to enroll farmland acres, I think they will eventually run into the hurdles put in place by our ancient real property system.

Carbon sequestration contracts for farmland are attempts to restrict usage of land. Historically, restriction on land were put in place by recording easements, mortgages, leases, or deed restrictions. The only way to effectively place restrictions on land for long periods of time is to record that obligation in state or county deed records. Most midwestern states still do this using county, paper-based recoding systems. Without recording the restriction subsequent owners are not bound by the restriction.

For example, a farmer could enroll 1000 acres of crop land into a carbon removal program, committing to no-till and plant cover crops for 10 years. The contracting party does not care who owns the property, only that the practices are undertaken for all 10 years, sufficient to generate salable carbon credits. But after the first year, if that farmer dies and his children inherit his land, they have no obligation to follow the carbon removal practices agreed to by their father—unless those restrictions are recorded in the land’s chain of title as a deed restriction, easement, or some other obligation that runs with the land.

I’ve yet to see any company with an easy solution to the cumbersome challenges created by our decentralized system of maintaining land records. For any widespread carbon removal program, the challenge of individually recording land restrictions in local land records will be immense.

Maybe climate change contracts involving land will be catalyst for a real property law renaissance? We can only hope.

Janzen Ag Law Blog
An Obscure User Interface is a Privacy Violation Wed, 28 Apr 2021 13:48:11 +0000 In my last post, I discussed how unauthorized secondary uses of ag data, when collected for a different purpose, are privacy violations. This post looks at another concept from Professor Solove’s Taxonomy of Privacy—how “decisional interference” is a form of privacy violation.

“Decisional interference” occurs when someone interferes with another person’s decision making through manipulative techniques, such as misleading content, obscuring relevant information, or mind games. Such interferences are a type of privacy violation. An example, a teenager that gets the keys to his parents car by telling them he is going to school—but then really goes elsewhere—has interfered with his parents decision making. This is form of privacy violation, because the teenager obtain his parent’s “consent” under false pretenses.

Many website and platform designs overlook this aspect of privacy. In fact, I think in many instances this type of decisional interference privacy violation is encouraged by software developers. How many times have you inadvertently signed up for a subscription service without realizing it?  Or found out that the free version ends after three days and your credit card is automatically charged. Or been challenged to find the terms of use governing a platform? User interfaces designed to obscure important information to drive your decision making are privacy violations.


Decisional interference by obfuscation is ultimately a problem of consent. Manipulative techniques are used to obtain your “consent” even when you may not realize it. This highlights the need for valid, informed consent and simple, easy to understand contracts involving collection of ag data.

I have come to expect such manipulative user interface techniques are normal, just minor annoyances. Instead, we ought to see them for what they really are—violations of our privacy that we would not tolerate in other parts of our lives.

Janzen Ag Law Blog
Secondary Use of Ag Data is a Privacy Violation Wed, 28 Apr 2021 13:48:06 +0000 Privacy as an idea seems simple. We all have an understanding of what privacy is and means.  Generally, most people probably consider privacy as the right not to disclose certain information. Blinds on your windows ensure visual privacy from neighbors—the right not disclose what happens behind the window to the outside world.

But privacy is a much deeper concept than just the right not to disclose information.  This post digs into some of those nuances and how they relate to online behavior. 

Professor Dan Solove has created a Taxonomy of Privacy. He identifies four categories of activities that impact privacy: collection, processing, dissemination and invasion.  

  • Information Collection:  Surveillance or interrogation. 

  • Information Processing:  Aggregation, identification, insecurity, secondary use, exclusion.

  • Information Dissemination: Breach of confidentiality, disclosure, exposure, increased accessibility, blackmail, appropriation, and distortion.

  • Invasions:  Intrusion and decisional interference.  

Ag data polls will ask farmers about their privacy concerns. Not surprisingly, farmers raise concerns about wrongful disclosure of ag data—will my data be provided to another third party? Farmers are also concerned about the breach of confidentiality of ag data—will someone learn information about my farm I do not want to share? These are important concerns and included in the “dissemination” category of activity. But I think “secondary use” is another issue farmers raise even though they may not label their concern that way.

“Secondary use” occurs when information is collected for one purpose and used for another. This is a privacy violation. An example given in a recent seminar was that information provided to the US Census Bureau was used to locate Japanese Americans who were placed into internment camps during World War II.  At the time people completed the census, no one realized the information would be used for a purpose other than counting Americans. This secondary use was a privacy violation with a horrific result.

Ag data platforms today often collect ag data for a specific purpose. But many contracts also give collecting platforms carte blanche licenses to use the data for virtually any purpose.  Using ag data collected for one purpose for a secondary use—not disclosed at the time of collection—is a privacy violation.

As the uses for ag data proliferate, the secondary use type of privacy violation deserves more attention by today’s ag data platforms.

]]> Janzen Ag Law Blog Creating Carbon Credits Fri, 26 Mar 2021 09:34:08 +0000 At a farmer meeting I attended recently, the hot topic was carbon reduction contracts. There was a lot of curiosity, confusion and skepticism among these farmers. Many questioned how the various offerings on the market work, whether these tools make financial sense, and whether farmers are better off holding out for more lucrative, future possibilities. Many questions involved questions about how “carbon credits” work. This post will explain more about carbon credits, who generates, verifies, and sells.

What is a “carbon credit”?  The term generally means the reduction of a quantifiable amount of carbon dioxide (CO2) or its equivalent from the atmosphere. A metric ton is the most commonly used measure. A metric ton is 1000 kilograms or 2,205 lbs. To put that into perspective, that is the approximate weight of two 5 feet x 5 feet round bales of hay. The phrase CO2 “or its equivalent” denotes that reducing other greenhouse gas emissions (GHG) may also generate a carbon credit. At a basic level, if a farmer can demonstrate a reduction in one metric ton of CO2 or its equivalent on his or her farming operation, they should be able to create and sell a carbon credit.

Round Bales.jpg

Who generates carbon credits? This is a multi-step process. First, farmers do the leg-work to create carbon credits by undertaking (or stopping) certain activities on their farms. For example, no-till farming might generate carbon credits because the number of passes across a field by fossil fuel burning equipment is significantly reduced from conventional till. Not surprisingly, tractors emit a lot of CO2 when crossing a field. Making fewer passes and having fuel efficient equipment can make a significant reduction in CO2 generated per bushel of crop raised. Similarly, restoring marginal farmland to prairie or forest might sequester enough carbon to generate a carbon credit over a period of time. It’s important to remember that carbon credits can be created by either a reduction in carbon or long-term storage (sequestration) of carbon.

Who packages carbon credits for sale? But reducing or sequestering carbon does not alone generate the carbon credit. The second part of generating a carbon credit requires some third-party intermediary to certify that that farmer followed the accepted protocols to actually create the credit. These intermediaries include multinational corporations, ag-tech startups, and non-profit corporations and consortiums. For example, here is a summary from Farm Journal explaining the carbon reduction offerings from Bayer, ESMC, Indigo, FBN, Nori and Nutrien related to row-crop farming.

Source: Farm Journal

Source: Farm Journal

One point to note here is that these intermediaries are not necessarily the same organizations that are verifying that carbon has been reduced or sequestered. There are numerous other certifying organizations that do that verification.

Who buys carbon credits? There are at least three different types of carbon credits buyers, all driven by different motivations. Industries that are large emitters of CO2 may be required by law to reduce their carbon footprint. These industries, like energy producers, may be required to buy carbon credits to offset their CO2 generation in certain jurisdictions. Think of these as mandatory buyers. The second type of buyer is motivated to please their shareholders. Many multinational corporations have publicly pledged to reduce their carbon footprint by year 20XX, and buying carbon credits is one tool to achieve these goals. The third type of buyer is driven by environmental concerns. There are simply some companies or persons who want to be carbon neutral. Regardless of the motivation, the farmer stands to benefit if he or she can take the steps to generate this new commodity on their farm.

An environmental cryptocurrency. A carbon credit is not a tangible thing, but it is a commodity that can be created, sold, traded, or bought. To me, that makes it similar to Bitcoin and other cryptocurrencies. It does not actually exist, but its value is driven by belief and trust in the systems that created the carbon credit. Think of carbon credits as a type of environmental cryptocurrency. 

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An Ag Data Checklist for Evaluating Carbon Platforms Tue, 23 Feb 2021 11:05:09 +0000 The market is buzzing with carbon reduction platforms designed to pay farmers for following established carbon reduction protocols. Indigo Ag, ESMC, FBN, Bayer/Climate Corporation, Nori, and Nutrien are just some of the players in these new carbon reduction platforms for row crop and grain farmers. Livestock producers are also seeing changes in how they produce proteins driving by the buyers of these commodities. What all of these efforts have in common—they all rely on data from the farmer to verify compliance.

That means more data collection from farmers. Here’s my checklist for farmers and other users of these platforms when reviewing the contract terms offered by these new carbon reduction platforms:

  • Does the platform minimize the loss of other future opportunities for the farmer that may arise from climate change?

  • Does the platform collect only as much data as necessary to verify compliance with the carbon reduction protocols?

  • Is ag data collected by the platform used only for the intended purpose stated by the aggregator?

  • Does the carbon credit buyer also commit to keep individual farmer data confidential?

  • Is the carbon reduction platform “pre-competitive”? Does it allow any similarly situated producer to participate?

  • Does money from the business buying the carbon credits flow down to the farmer implementing the required production practices?

For any carbon reduction platform to work, it likely requires a long-term commitment. That’s why many of these platforms require 10+ year obligations. This is all the more reason for farmers to consider the future implications for their farm when signing up for one of the new carbon reduction platforms.

More discussion of these checklist items will be coming in future posts.

Janzen Ag Law Blog
Ag Data Transparent: Updates for 2021 Tue, 26 Jan 2021 21:03:15 +0000 The ag data transformation of agriculture is well underway. Five years ago, the Ag Data Transparent (ADT) launched with a mission to bring clarity and simplicity to farmers’ decisions to use online ag data platforms. The central part of ADT’s vision was fulfilled by creating a certification process that involved tech providers answering 10 questions about how they collect, share, and use farmers’ ag data.

Online ag data platforms have matured a lot since 2016, and so it was time for the ADT’s certification to mature as well. This past fall, the ADT undertook a process of updating its certification questionnaire. A number of new and updated questions were added as part of the process. Here is an explanation of some of the changes.

Defining who the tech company is. One of the ADT’s Core Principles was that “terms” in contracts should be well defined. This includes the description of the tech provider:

Farmers should know with whom they are contracting if the ATP [ag tech provider] contract involves sharing with third parties, partners, business partners, ATP partners, or affiliates. ATPs should clearly explain the following definitions in a consistent manner in all of their respective agreements: (1) farm data; (2) third party; (3) partner; (4) business partner; (5) ATP partners; (6) affiliate . . .

The updated certification questionnaire now begins with a new question:  “Who is the tech company?” This seems simple and obvious, but many companies today use “we” and “us” in their contracts as descriptions for the company and its affiliates. Now ADT certified companies will have to explain who they are.

Defining who the user is.  The updated certification also requires tech companies to explain who the primary users of their platform are. The original ADT certification called these people “farmers,” but the reality is that many ag tech users are not farmers—they are agronomists, seed dealers, landowners, ranchers, ag retailers, etc.  The new, broader definition of who uses ag tech platforms reflects this reality.

Aggregating data.  The updated certification now requires tech company to identify whether users have the ability to “opt-out” of aggregated data sharing. Question 4 states: “Does the tech company allow the user to opt out of inclusion in anonymized and aggregated datasets that are accessible by other users?”  Notably, there is not a right or wrong answer to this question. Some platforms allow users to opt-out of data sharing, others require it. That is fine. What matters is that users know their options for sharing data when signing up.

Selling data. The revised certification also asks tech companies to inform users if the tech company intends to sell aggregate data to third parties without user consent. One of the big concerns voiced by farmers five years ago and today is whether their data can be sold to others. The updated questionnaire addresses this concern.

The other questions asked as part of the original certification remain mostly as before. That reflects that many of these issues five years ago—data ownership, portability, consent—are still issues requiring more clarity today.

To learn more about the ADT’s updated 11 question certification form, visit the Ag Data Transparent website.

Janzen Ag Law Blog
Ag Data Transparent: 11 Certification Questions Tue, 26 Jan 2021 20:57:41 +0000 Here are the 11 questions that ag tech companies must answer in order to become Ag Data Transparent certified.

  1. Who is the tech provider? What products, platform, or services within the tech company are certifying as Ag Data Transparent? Who are the primary users of the product, platform, or services?

  2. What categories of data does the data platform collect?

  3. Do the tech company’s agreements with the user address ownership of user data? 


  5. Does the tech company require outside contractors that have access to user data to follow the tech company’s data policies? 

  6. Does the tech company obtain a user’s consent before sharing user data with third parties?

  7. By signing up, does the user give the tech company the right to sell aggregated data to third parties without obtaining further consent?

  8. Does the tech company maintain an original copy of user data that can be retrieved or deleted upon a user’s request? 

  9. Will the tech company notify the user if a breach of data security causes disclosure of the user’s data to an outside party?

  10. Will the tech company notify the user when data agreements are changed and summarize how the agreements were changed?

  11. Do the tech company’s data agreements address what happens to user data if the tech provider is sold to another company?

If you are interested in certifying your company as Ag Data Transparent, please visit the Ag Data Transparent website.

Janzen Ag Law Blog
2020: The Year in Reverse Thu, 17 Dec 2020 14:31:07 +0000 Each year at this time I like to reflect on what the big events were over the last twelve months. Here are the news articles and stories getting the most interest on the Janzen Ag Tech Blog in 2020.






Janzen Ag Law Blog
How the Ag Data Landscape Has Changed in Five Years Fri, 30 Oct 2020 12:20:06 +0000 I feel like it was about five years ago when the gates were opened to the ag data land rush. Small ag-tech companies and multinational legacy companies all entered the ag data space, each rushing to grab as many acres or customers as possible. As we near the end of 2020, I thought it would be worth reflecting on how ag data has changed during this five-year period.








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Do Electric Vehicles Spell the End for Biofuels? Tue, 29 Sep 2020 19:18:54 +0000 A recent AgWeb article made a bold claim: Tesla is the biggest threat to farming today. I’ve always considered Tesla to be an enormous innovator—more likely to improve the efficiencies of farming than to threaten it. What could the author possibly mean?









Janzen Ag Law Blog
Harnessing the Wind: 3 Legal Considerations When Signing a Wind Lease Fri, 18 Sep 2020 15:31:08 +0000 Wind power in my part of the world has become a very popular “clean” energy source for power companies. Wind power has also become very controversial, leading to highly contentious zoning fights at the county level. This article discusses three legal items for landowners to consider before signing an agreement to allow construction of wind turbines on their fields by a developer.





Additional resources:

Purdue University: Landowner’s Guide to Commercial Wind Energy Contracts

Iowa State University: Evaluating a Wind Energy Agreement

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