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Bell Farms, Sioux Tribe Proceed With Joint Venture

It's quite a sight to see 24 identical, 2,000-head, wean-to-finish barns appear on the horizon in an area where there is often little else to see but the horizon. The breathtaking sight of the white and silver buildings between the prairie and the sky near White River, SD, has prompted many passers-by to ask what exactly is going on at the Rosebud Sioux Indian Reservation. Those buildings are part

It's quite a sight to see 24 identical, 2,000-head, wean-to-finish barns appear on the horizon in an area where there is often little else to see but the horizon. The breathtaking sight of the white and silver buildings between the prairie and the sky near White River, SD, has prompted many passers-by to ask what exactly is going on at the Rosebud Sioux Indian Reservation. Those buildings are part of the first phase of a plan to bring economic development to an area that hungers for jobs and opportunities.

Phase I of the Rosebud Farms pork project includes plans for a total of 72 wean-to-finish buildings on three sites. Additional phases have been proposed. If and when the entire project is completed, 220-250 jobs may be created. The project is a joint effort between a Bell Farms partnership called Sun Prairie and the Rosebud Sioux Tribe (see sidebar).

As seems to be the case with many hog operations these days, rumors fly. The saga of the tribe's efforts to improve its members' lifestyles took an unforeseen turn when environmental groups initiated a messy legal battle to stop the project.

Though they have generally maintained a policy of trying to do things right while keeping a low profile, Rich, John, Steve and Graydon Bell, Bell Farms, Wahpeton, ND, and Norman Wilson, Rosebud Sioux Tribal Chairman, agreed to share their story with National Hog Farmer readers.

Seeking Economic Development The Rosebud Reservation has a population of close to 23,000 people, and covers approximately 900,000 acres of land in south-central South Dakota. Unemployment on the reservation hovers near 90%. "The unemployment figure for our people is almost unbelievable, but it's true," says Rosebud Sioux Tribal Chairman Norman Wilson.

Bill Huber, Parmelee, SD, along with Wilson and several other tribal members, have been involved in recruiting economic development for their community.

Because of the resources available on or near the reservation lands - including inexpensive corn, wide open spaces and the abundance of water resources - hog production was targeted as a possible economic development opportunity for the area. Several pork production entities were contacted before the tribe became aware of Bell Farms. Wilson heard Bell Farms might be interested in working with a reservation on a project so he contacted Rich Bell to learn more.

"They (the Bells) explained all of the environmental safeguards they believed in, how they built their buildings and about all the latest technology that they used in their pork production operations," Wilson recalls. As they learned more about how the operation could work, Wilson and other tribal members thought the employment opportunities and skills required might be a good fit for their people. Wilson says the amount of money that investors were willing to put into the project was impressive, too.

The Bell Farms partnership consists of 30 people. Rich Bell and his sons coordinate the many facets of the Bell Farms partnership throughout the U.S. The arrangements and investors vary with each project.

In the case of the Rosebud project, Sun Prairie is the general partnership that owns thepigs. The Bell Farms partnership is part of this arrangement.

When it comes to pork production in South Dakota, the state's anti-corporate hog farming constitutional Amendment E makes understanding what business entities are legal, and which are not, a bit complicated. As the Rosebud Farms project began to develop, statements started appearing in the press claiming Sun Prairie could not operate in South Dakota if it were not for the sovereign immunity of the Indian reservation. Reports implied that the project would not be legal under the state's anti-corporate farming law. Rich Bell says these allegations are untrue because Sun Prairie is a general partnership, in which all partners are equally, individually liable. It is not a corporation, he says.

The Process While the tribe was considering whether or not to enter into an arrangement with Bell Farms, Huber flew with other tribe members to the Bell Farms site in Lamar, CO, to learn more about how the group operates. He was impressed with the manure handling systems and lack of odor at those operations. Tribe members were adamant that the project not be harmful to the environment.

Some have argued the plan to locate the project in Indian country was designed to avoid environmental regulation. In fact, the measures adopted by the tribe and Bureau of Indian Affairs (BIA) for protecting water resources exceeded any requirements of federal or state law in South Dakota.

Huber says when the project was first proposed, many people said the environmental restrictions the tribe put on the project would make it impossible to build to those specifications.

The tribe required the sites to be located on Pierre shale, a highly impermeable soil, to minimize risk of groundwater contamination. Another requirement stated cultural resources had to be protected.

In the spring of 1998, after preliminary questions were answered and concerns had been addressed, the Rosebud Sioux Tribe and Sun Prairie (the Bell Farms partnership) began negotiations for a land lease to develop a multi-site hog production facility on tribal trust land. Considerable work had to be done to make sure the correct site was chosen. Concerns about the waste-containment structures, protection of groundwater and drinking water and monitoring activities had to be addressed.

The BIA is the trustee for U.S. Indian lands, and the federal government holds the lands in trust for the Indian people. BIA staff performed an unannounced inspection of Bell Farms facilities in Colorado to learn about actual operations that would occur at the project.

The BIA assigned its Rosebud agency realty officer and soil conservationist to evaluate the preliminary site selection process. Twenty-two tracts of land were selected for further evaluation and consideration for project sites. The Rosebud Agency Natural Resources staff and Aberdeen area environmental engineer met technical and leadership representatives of Sun Prairie and the tribe to further review the project.

During the process of selecting the right sites, Sun Prairie and the tribe evaluated all of the potential sites, covering some 4,000 acres. Proper siting was crucial.

Special surveys were conducted to make sure there would not be an adverse impact on water resources, or archaeological, paleontological or historical resources. If locating the pork production facilities on a particular site would affect any of those areas, the site was rejected.

Numerous soil borings were taken to assure the right soil type in the location of the facility. Many sites were rejected because of inappropriate soil types. Specialized, independent consultants prepared the environmental assessment and the associated archaeological and endangered species surveys.

Biologists and entomologists were employed to conduct surveys to make sure no endangered animals, insects or plants were located on the site.

All project sites were located on land devoted exclusively to agricultural use.

Environmental Protection Agency (EPA) engineers assisted Bell Farms specialists with developing an extensiveand safe manure handling system. The EPA engineers were able to review all plans.

The BIA reviewed comments from interested parties, some favoring the project, others opposing it. The majority of tribal comments supported the project.

An environmental assessment for the project was prepared in June 1998 for the BIA's South Dakota office. Based on the final environmental assessment, released in August 1998, BIA Rosebud Agency Superintendent Larry Burr issued a "Finding of No Significant Impact to the Environment" from the project. No other environmental reviews were required.

In August 1998, the Rosebud Sioux Tribal Council adopted a tribal resolution which authorized the lease for the project. The lease was approved and recorded.

In late September 1998, the Rosebud Sioux Tribe and Sun Prairie started construction on the first site of Phase I of the project. The project consists of two phases. Phase I consists of three, wean-to-finish sites. If the project continues, Phase II would consist of five sow sites and five additional finishing sites.

Activists Appear Just as the construction of the Rosebud Farms project was getting off to a good start, in November 1998, and well after the appeal time against the BIA's decision had lapsed, a coalition of activist groups, including the Concerned Rosebud Area Citizens, Prairie Hills Audubon Society of Western South Dakota, South Dakota Peace and Justice Center, and the San Francisco-based Humane Farming Association sought to stop the construction of the project.

The groups filed suit in Washington, DC, challenging the BIA's decision not to require an environmental impact statement during the consideration process before issuing the Finding of No Significant Impact. The suit alleged this violated the National Environmental Protection Act and the National Historic Preservation Act.

The government filed an answer in the litigation in January 1999, denying any violations of either act in connection with the hog construction project.

In a confusing and seemingly contradictory development, one day after the government filed an answer in the lawsuit saying there were no violations, Washington, DC-based Kevin Gover, assistant secretary for Indian Affairs, U.S. Department of the Interior, sent a letter to the Rosebud Sioux Tribe, stating that the BIA's approval of the lease for the project was void for failing to fully comply with the National Environmental Protection Act. The activist groups asked for their lawsuit to be dismissed, citing the assistant secretary's letter voiding the lease approval. The court dismissed the case.

No Lease, No Land This put both the tribe and Sun Prairie in a tight spot. Concrete had already been poured. Buildings had been built. And all of this was done on land on which there suddenly was no valid lease. A total of $5 million had already been spent at this point and the project was stopped. Pigs were on the way to fill the first buildings.

The Rosebud Sioux Tribe and Sun Prairie instantly challenged Assistant Secretary Gover's authority and decision to void the lease. They sued in Federal Court in South Dakota, seeking a legal declaration that the environmental assessment prepared for the project complied with the National Environmental Protection Act.

Lawyers for both Sun Prairie and the Rosebud Sioux Tribe argued the financial threats to both the tribe and to Bell Farms were very significant. Voiding the lease could cause big problems with the lenders who were financing the building project.

The tribe would be unable to recover approximately $45,000 for improvements designed specifically for the project.Tribal members employed in the construction of the project would be laid off, and tribal members anticipating employment in the operation would not have the opportunities they had been hoping for.

The Rosebud Sioux Tribe wanted the lease to continue. No interested party ever filed an administrative appeal to place the issue before Assistant Secretary Gover. Gover made his decision in an arbitrary fashion, according to the judge in the case. Issuing a temporary restraining order and then a preliminary injunction preventing the BIA assistant secretary from enforcing the lease withdrawal, Judge Charles B. Kornmann ruled that Gover's exercise of authority was, "arbitrary, capricious and an abuse of discretion," and therefore void.

This ruling meant the construction could continue on Phase I, but the final decision is still pending. The final ruling is expected soon. The activist groups have already voiced their intent to appeal if the lease is upheld.

The construction of the first of the three sites making up the first phase of the Rosebud Farms project is nearing completion. Tribal chairman Wilson says the tribe is still committed to the project. Rich Bell says Bell Farms and Sun Prairie are still optimistic about the success of the project, too.

However, there are still lingering uncertainties. As Wilson relates, "As far as I can tell, this would be one of the first times any outside investors were that interested in working with people on a reservation. First the question was, could we prove to the investors that it was safe for them to invest their money on the reservation? After much negotiation we got over that hurdle. Now we got started, and here came the environmentalists."

Judge Kornmann seemed to agree, "This court, sitting as a court of equity as well as of law, finds it offensive to any sense of justice that a federal agency, especially the BIA, charged as it is with enormous trust responsibilities to Native Americans and their tribes, can be allowed to claim that the BIA violated the National Environmental Protection Act and the Rosebud Sioux Tribe and Sun Prairie should suffer the enormous financial and other consequences of such BIA action or inaction. These things should not happen in the United States of America."

Kornmann went on to say that without a preliminary injunction, the project would probably have been terminated and future projects with tribes would be harder to come by.

"Indeed, the failure of this project based on administrative ineptitude and procedural unfairness would absolutely deter private entities from pursuing economic relationships with the various tribes," Kornmann says.

The Rosebud Farms project is a joint effort between Sun Prairie and the Rosebud Sioux Tribe. The project consists of two phases. Construction on the first of three, identical, 48,000-head, wean-to-finish sites that will make up Phase I of the project is nearing completion. This first site is called Grassy Knoll Finish, and is located west of White River, SD, population 652.

Sun Prairie * Sun Prairie is a general partnership.

* Sun Prairie handled all financing, equity and market contracts for the first phase of the project.

* Sun Prairie contracts with Bell Farms for management of the site.

* Sun Prairie owns the pigs. The Bell Farms partnership is part of this arrangement.

* The Sun Prairie arrangement is not affected by South Dakota's anti-corporate hog farming law, Amendment E, because each member of the general partnership has individual liability.

Rosebud Sioux Tribe * Rosebud Sioux Tribe provides the land for the building sites, water to sites, roads and utilities and facilities construction, at no cost to the project.

* The Rosebud Tribe will get 25% of the profits from Phase I.

* Sun Prairie gets 75% of the profits from Phase I.

Phase I * Three 48,000-head, wean-to-finish sites.

* 24 buildings/site.

* 2,000 head/building.

* 36 pens/building.

* 40 acres/site.

* Each site is sized to accommodate the pigs generated by a 5,000-sow site/Bell Farms operation in Colorado.

* Pigs will be brought in to fill one building weekly, 52 weeks/year.

* Pigs are placed in buildings at an average weight of 12 lb.

* Pigs are marketed at an average weight of 260 lb.

* Pigs are contracted to local packers.

* The development of Phase I of the project is expected to take one to two more years.

Buildings * "These are the best barns in the system," says Trent Loos, cell coordinator for Phase I ofthe project. (Farms located in a particular area are called cells.) "We have the ability to keep every pig at an ideal comfort level all the time."

* Chimney fans are used with naturally ventilated, curtained sidewalls.

* LP gas brooders help keep the small pigs in good microenvironments.

* Pigs are fed by hand on mats for the first 8 days they are in the buildings.

Waste Handling System * The buildings are designed so that waste and wastewater are collected in concrete flush lanes located beneath slotted concrete floors. A low temperature, anaerobic digester at the site biologically treats the manure.

* After treatment, the wastewater is conveyed by gravity flow to an evaporation system connected to the digester.

* Water from the digester is used to flush the buildings to reduce the demand for fresh water.

* The treated wastewater from the digester is disposed of in a series of terminal evaporation ponds. This means there are no land applications or discharges of wastewater from the unit.

Employees * Each of the three, initial, wean-to-finish sites will employ between 15-17 people when completed.

* Loos has good things to say about the employees who have been working at the facility. There has been tremendous interest in the job opportunities that the hog production facility can provide. "We want our employees to have a good lifestyle," Rich Bell explains. The employees receive competitive pay, medical and wellness benefits as part of their employment package.

* Loos says the company has retained a family atmosphere as it has grown. Employees complete an extensive training program to learn about areas such as barn environment, genetics, herd health, marketing, nutrition and finance. "We want the employees to understand every part of the process," he says.

Phase II-Sow Sites * Five, 5,000-sow production sites are proposed for Phase II of development of the project.

* Also part of Phase II would be the construction of five, 48,000-head wean-to-finish sites. These sites would be identical to the three Phase I sites.

* Rosebud Tribe will have the option to buy out the project partners after 15 years for a portion of the original facilities cost.

* Rosebud Tribe may continue to contract with Bell Farms for operational management, for a management fee.

Construction Construction, engineering and design of the project has been overseen by National Swine Builders. This is a division of Bell Farming Group and is managed by Rich's son, Steve Bell.

The Anderson Group Inc., a design and construction management company, has supervised work at the building site. Local contractors and labor have been used whenever possible.