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10 CapitalPress.com January 9, 2015 Oregon By ERIC MORTENSON Capital Press By MATEUSZ PERKOWSKI partment spokesman Bruce Pokarney. “It’s that kind of mix on the production side that tends to create more potential chal- lenges for co-existence. The Willamette Valley is a prime example. We have organic pro- ducers of all sizes, convention- al producers of all sizes, and a growing number of genetically engineered producers all in the Willamette Valley with that di- versity of product. “Frankly, it’s a relatively small geographic area, which causes more pressure than, perhaps, you would fi nd in Northeastern Oregon. The growing region of Morrow and Umatilla County has agri- cultural diversity, but because the acreage is much bigger, you have the potential to do more kinds of production prac- tices that allow co-existence, including isolation distances. “So we are struggling, frankly, in the Willamette Val- ley about how to embrace our philosophy of supporting all kinds of agriculture regardless of size, regardless of produc- tion practices. How do we go about doing that when you have such a mixture in a rel- atively small geographic area? We will continue to work on the issue in 2015.” For the full interview,go to http://odanews.wpengine. com/oda-director-refl ects-on- agriculture-at-years-end/ Sn audio version is avail- able as well. Generational disputes not uncommon in family fi rms, experts say S family feud has broken out among the owners of a 3,400-acre diversifi ed farm op- eration in Southern Oregon, a case experts say illustrates the kind of disputes that can devel- op when members of multiple generations own fractional shares of a farming business. Minority shareholders of Henry Enterprises Inc., which owns farm, pasture and forest land in Douglas County, claim some of the company’s lead- ers misappropriated about $1.8 million to fund their separate winery venture. Leslie Scallon and Jay Gair- son, who together own less than 2 percent of the fi rm, are pur- suing a federal lawsuit against several other owners, including Calvin “Scott” Henry III, who is the largest shareholder and 2-4/#4X Capital Press owns the winery in Umpqua, Ore. The fi rm has 16 sharehold- ers split among three family groups, the complaint said. The plaintiffs, who live in the Los Sngeles and Seattle ar- eas, claim that Scott Henry en- tered into a farming partnership with their family in the 1970s but has since neglected main- taining the property, hindering its potential value, while draw- ing wages for his management. The complaint alleges that Scott Henry instead focused his attention on developing a win- ery and vineyard on the com- pany’s land without paying rent and otherwise used its assets to pay for the expenses of his side venture. S change in the overall com- pany’s board led to the hiring of a new accountant who found that Scott Henry had appro- priated about $1.8 million for his own uses, and owed about $1.7 million in interest on that amount, the plaintiffs claim. Other board members ha- ven’t been able to resolve the dispute, which prompted the two plaintiffs to fi le a lawsuit demanding the repayment of about $3.5 million in princi- pal and interest as well as the eviction of the winery from the company’s property, the com- plaint said. Capital Press was unable to reach Scott Henry or the winery for comment as of press time. While they may not always end up in federal court, such disputes are unfortunately quite common in family companies as ownership passes to splin- tered new generations, experts say. “Family unity is so critical to the success of the business,” said Sherri Noxel, director of the Sustin Family Business Program at Oregon State Uni- versity. “When a family starts to branch out and divide, you have to reconnect and help them un- derstand how important that common vision is,” she said. Roughly 70 percent of fam- ily businesses don’t make the transition from the fi rst to the second generation, and 90 per- cent fail to survive from the second to the third generation, said Eugene Wallace, a busi- ness adviser and board member of the International Succession Planning Sssociation. “It’s a lack of trust,” he said. “Once your trust is diminished, you go to war.” For shareholders not in- volved in farm operations, it’s important to realize they’re supposed to set strategic goals but not interfere in day-to-day activities, Wallace said. “The non-working owners have a very different role than the working owners.” rop-1-2-7/#14 ak Wallowa-Whitman National Forest Sn Wash. Ore. 84 3 Pendleton Baker City 95 John Day Snow Basin Project Area N 84 Capital Press graphic S Courtesy of the Oregon Department of Agriculture Katy Coba, director of the Oregon Department of Agriculture, says challenges over pesticide use and GMO crops dog the industry and will feature prominently in the 2015 Legislature. The U.S. Forest Service has suspended timber sales in a 29,000-acre thinning project in Northeast Oregon due to an unfavorable court decision. The agency’s decision to effectively stop logging in the Snow Basin project in the Wallowa-Whitman National Forest comes after a federal judge found its analysis of environmental impacts was defi cient. Because the project’s ap- proval was declared unlawful, U.S. District Judge Marco Hernandez has ordered the environmental plaintiffs, the Forest Service and other af- fected parties to devise a rem- edy until the government’s environmental analysis is cor- rected. In the meantime, the For- est Service has suspended existing contracts in the proj- ect area, said Rob Molinelli, an attorney for the Smerican Forest Resource Council, which represents Boise Cas- cade Wood Products and local county governments in the case. “Basically, nothing is hap- pening in the Snow Basin project,” Molinelli said. The outlook for the thin- ning project will depend on how much additional analysis the Forest Service will have to do, and the parties will proba- bly continue negotiations into 2015, he said. Sside from the “landscape size” project’s economic ben- efi ts, thinning is necessary to mitigate wildfi re risks and insect infestations in the re- gion’s forests, Molinelli said. “The general consensus is they’re in an unhealthy state,” he said. The League of Wilderness Defenders/Blue Mountains Biodiversity Project, the lead environmental plaintiff, does not object to thinning for e Capital Press S. Oregon farm faces family feud By MATEUSZ PERKOWSKI R iver er Oregon agriculture emerged from the recession into an era of good prices, high quality and ex- panding markets, but challenges over pesticide use and GMO crops dog the industry and will feature prominently in the 2015 Legislature. In her annual in-house in- terview carried on the Oregon Department of Sgriculture website, Director Katy Coba noted the narrow defeat in November of a measure that would have mandated labeling of products containing geneti- cally engineered material. Sl- though urban residents heavily supported the measure and ru- ral farming regions opposed it, Coba said the issue shouldn’t be defi ned solely in terms of urban vs. rural. The tight farming con- fi nes of the Willamette Val- ley complicate the issue, she said. “Our diversity of crops makes this more challenging and there are also some geo- graphic locations that have a mixture of small operations, medium operations, and large operations, organic, conven- tional, and genetically-en- gineered agriculture,” Coba said in an interview with de- Judge’s decision puts brakes on forest thinning in NE Oregon Ore. Idaho Coba: Debate isn’t solely an urban vs. rural issue forest health but is “totally opposed” to the commercial aspects of the project, said Tom Buchele, attorney for the group. “It was a pretty sweeping win,” he said of Hernandez’s recent ruling. Buchele said he would not speak publicly about negoti- ations over the scope of the remedy, which will affect fu- ture logging levels. “We’re still talking about that with the other side,” he said, noting that they hope for a resolution in January 2015. In the ruling, Hernandez said the Forest Service didn’t properly analyze the project’s “cumulative impacts” and failed to suffi ciently explain why the agency exempted certain sites from an earlier prohibition against the log- ging of large trees. He also faulted the Forest Service for not making cer- tain forest specialists’ reports available to the public in the process of approving the thin- ning project. The adverse ruling is a reversal of fortunes for the agency and other affected par- ties in the case, which initially convinced Hernandez not to enjoin the project. Earlier this year, however, the 9th U.S. Circuit Court of Sppeals overturned that deci- sion and ordered the judge to reconsider the case. Specialty crop grant funding proposals being accepted By ERIC MORTENSON Capital Press The Oregon Department of Sgriculture is accepting proposals for funding under the 2015 federal specialty crop block grant program. Producers, entrepreneurs, commodity groups, nonprof- its and others must submit their ideas online by Feb. 24. Oregon is expected to have about $1.5 million available to help fund projects relating to the production, develop- ment and marketing of fruit, nuts, vegetables and nurs- ery plants. Funding priority this year is aimed at projects relating to market develop- ment, food safety compli- ance, labor and tools, train- ing the next generation, pest and disease management, productivity improvements, distribution system improve- ments and food-related pri- orities identifi ed by Oregon Solutions Network Regional Solutions Centers. Funding requests should be in the range of $25,000 2-5/#4X to $100,000 and for projects that can be completed with- in two years. Spplicants are strongly encouraged to pro- vide a dollar-for-dollar match of the grant amount. Funding comes from the USDS. The state ag department wants to see six-page con- cept proposals that describe the project. Directions for submitting concept papers, writing grant proposals and other information is avail- able at http://www.oregon. gov/ODS/programs/Mar- ketSccess/SpecialtyCrop/ Pages/SpecialtyCrop.aspx or by contacting ODS’s Sg- ricultural Development and Marketing Program at (503) 872-6600. Sn industry advisory board will evaluate proposals in March and make recom- mendations on the top-ranked applicants. The fi nalists will then be asked to submit full grant proposals for a second round of evaluation. Projects chosen to receive funding will be announced in Novem- ber 2015.