Nalivka: Regulations and U.S. Food Production

Kiamichi Ranch
Kiamichi Ranch
(Hall & Hall)

Aside from the Tyson – Easterday Ranches fiasco in Eastern Washington, there were two other stories (one also concerning Tyson) in the news this past week that are notable.  Together, they have the ingredients for increasing regulations on the food industry. 

The first is Congress’s intent to investigate, Tyson, JBS, and Smithfield’s actions and performance with regard to COVID-19 in their plants.  No doubt, how COVID was handled in their packing plants, and any packing plant for that matter, is important – to the employees and the company.  The performance of one affects the other.  For some reason, I detect a bias toward malfeasance with regard to the investigation.

I believe the packing industry has placed COVID as a top priority from the beginning when the virus was first discovered last year and subsequently, spent an inordinate amount of money in doing that.   But that’s not my point.  The second newsworthy topic was President Biden’s signing of an Executive Order on January 20th entitled, “Executive Order on Revocation of Certain Executive Orders Concerning Federal Regulation.”  What this executive order entails is cancelling Executive Order 13771 entitled “Reducing Regulation and Controlling Regulatory Costs” signed by President Trump.

It may not be the direct intent of these two actions, but I certainly have to ask if the opportunity to increase the regulatory burden on the U.S. food industry isn’t being laid?   It would lead me to believe so.

If I were asked to pinpoint the single greatest threat to U.S. food production, I would respond with one word – regulation.  I say this because regulatory activity impacts the entire supply chain from the producer to the consumer.  And I wouldn’t argue if one were to respond that regulations protect consumers, but food safety is not the regulatory target that I reference.  Food safety and quality are primary attributes that support demand and I doubt that anyone would argue with the regulatory cost of having a safe food system unless a regulation only replicates an existing one and serves no purpose.

From 1995 through 2016, there were 4,312 public laws written and passed.  At the same time, there were 88,899 total rules (regulations) written to coincide with these laws and are legally binding.  Legislators write laws and bureaucrats write regulations.  These regulations are all compiled in the Code of Federal Regulations which was first published in 1938.  These regulations impose costs on the entire system and again, I am not being critical of all regulation.  Obviously, some are necessary. 

However, think about those nearly 90,000 regulations written over a 21-year time span and ask yourself how many were truly necessary.  Then, ask how much cost was imposed on Americans as consumers and businessmen as the result of that regulatory process.  I think the Executive Order signed by President Biden should give farmers, ranchers, feedlots, hog producers, and processors a great deal of pause.

 

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