Impact of Regulatory Change on Production Agriculture

The United States Government enforces change in the forms of laws and regulations. Laws are the actual rules and guidelines that are passed through Congress to govern behavior, while regulation is the process of monitoring and enforcing the laws. Federal executive departments and administrative agencies write and enforce regulations, that in theory are supposed to follow the intent of the law.

As it has become increasingly difficult to pass legislation through Congress, the power has shifted to regulatory agencies. According to RealClearPolicy, more than 3,600 new regulations are issued each year. Problems arise when regulations become an unnecessary burden on businesses and producers who are required to comply. Rather than being able to voluntarily focus resources on improving production practices and making beneficial changes for their land and their animals, farmers and ranchers can be forced to make costly and unnecessary changes to their operations to meet ever-changing regulations.

A typical farm or ranch in Oklahoma must comply with regulations for food animal welfare; safety of food products and production practices; land, air and water quality; conservation and many others. At times, different agencies issue contradictory regulations, so producers can be penalized despite their best efforts to keep up.

RealClearPolicy estimates that Federal regulation adds up to a hidden tax on American families in the amount of $15,000 per year. In most industries, business owners are able to pass the cost of regulation on to consumers in the form of higher prices for their products. Farmers and ranchers, however, do not have that luxury.

In a commodity market, farmers and ranchers must sell their products at the market price, regardless of what it costs them to produce. Each additional regulation puts an extreme financial burden on producers who are faced with limited potential profit margins.