Court Opinion

ID: 3985196
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:41:25.866311+00
Date Added: 2024-06-11T14:18:15.407129
License: Public Domain

This is a border line case. The test is whether the processing done by this co-operative is a "service * * * performed as an incident to ordinary farming operations." The word "ordinary" is quite important. The fact too that the processing was necessary to market the product is likewise a telling factor; also the fact that the work was done for the farmer co-operators. The co-operators retained title to the birds. They were not sold to the processor. Had the situation been as in Batt v.Unemployment Comp. Div. of Ind. Acc. Bd., Idaho, 123 P.2d 1004, 139 A.L.R. 1157, I should have more doubt. All of the above factors serve to prevent farmers from extending their operations beyond farming and into the field of manufacturing while still attempting to come in under the guise of farm operations. The *Page 13 
place where the operations are performed and whether done co-operatively through the legal instrumentality of a non-corporate association or a nonprofit corporation have some weight in determining whether the processes are incidental to ordinary farming operations but are not controlling in view of weightier considerations pointing the other way. I have some doubt in this case as to whether the processing carried on by the plaintiff was incidental to ordinary farming operations or whether it did not introduce processes which went beyond that but I resolve that doubt in favor of the plaintiff because of the fact that it appears that such processing was necessary to market the turkeys and was performed for the farmers.
The quotation from the Senate and House Reports which attempts to give some definite content to phrase "as incident to ordinary farming operations" is enlightening, especially where it states that such expression was "intended to cover all services * * * which are ordinarily performed by the employees of a farmer or by the employees of a farmer's co-operative organization or groupas a prerequisite to the marketing, in its unmanufactured state
of any agricultural or horticultural commodity produced by such farmer or by the members of such organization or group." (Italics added.) The processing of the turkeys done by the plaintiff organization appears to concern itself with operations prerequisite to marketing since the turkeys cannot be marketed in bulk without such processing. I confess that I am somewhat perturbed by the statement in the congressional report reading: "To the extent that farmers, organizations, or groups, engage in the handling, etc., of commodities other than those of their own production or that of their members, such handling, etc., is not regarded as being carried on `as incident to ordinary farm operations.'" I am concerned because it appears that in the instant case this co-operative does handle some birds which were not raised or were not the property of the farmers who owned the co-operative, although such growers *Page 14 
must have made application for membership in the co-operative. In the construction which we place on the words "incident to ordinary farming operations" as pertaining to service performed by co-operatives off the farm we imply that the legislature intended to enunciate the policy of exempting "co-operatives" doing such services whilst not exempting commercial organizations performing the same service. While willing to go along with that as the pronouncement of this court I must call attention to the fact that in enunciating such policy the Legislature permitted such co-operatives to gain a distinct advantage over their commercial competitors. If "co-operatives" may process the turkeys of persons who are not co-operators I fear that the line of demarcation is destroyed and we may open the way to encouraging commercial or profit making concerns to avoid the tax on payrolls by the device of making all who bring birds to its establishment co-operators or applicants for membership in the venture or by some less obvious device. Certainly the doing of things co-operatively when it decreases the cost per unit is commendable but in our economy where free enterprise is also not to be discouraged it would seem that the co-operatives should be required to pay their way and bear their share of the social responsibilities which are loaded on to business such as disability and unemployment compensation. However, this I concede to be a matter for the legislature but I am not too sure that if a co-operative takes outside business charging a fee that it should not be permitted to claim exemption.