Summary of a Recent
Judicial Development in
Farm Commodity Programs

Producer Must Repay Farm
Program Benefits

Amy K. Miller
National AgLaw Center Graduate Assistant

In Kinder Canal Co. v. Johanns, 2006 U.S. Dist. Lexis 5514 at *28. (W. D. La. 2006), the court upheld a NAD decision requiring Kinder Canal Company ("KCC") and its president, Mike T. Unkel, to repay commodity program payments received as a result of factual misrepresentations made to the Farm Service Agency (FSA).

Unkel, acting of behalf of KCC, repeatedly misrepresented land ownership and crop acreage bases to obtain commodity program benefits. Id. at *2-4. The court concluded that although KCC was the signatory on the contract at issue, Unkel, who had a shareholder interest in KCC, was a producer. Id. at *17. According to Title 7 C.F.R. §§ 11412.405 (1997), 1412.601 (2003), and 1412.604 (2003), because he was a producer who knowingly misrepresented the facts, Unkel was required to refund all farm program payments he received with respect to all contracts, including those in which misrepresentations were not made. Id. at *17-19.

KCC and Unkel tried to absolve Unkel of liability by pointing out that FSA made the initial error of deleting tracks of land sold without removing the rice bases. Id. at *22. However, the court concluded that because Unkel repeatedly misrepresented the ownership of the involved tracts of land, FSA's error did not exonerate him from liability. Id.

The case was decided on January 31, 2006; this summary was posted Mar. 21, 2007.