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AMI Politico Op-Ed: President's Executive Order to Remove Outdated Regulations Comes Just in the Nick of Time

Friday, February 18, 2011

(American Meat Institute)

“President Barack Obama said the right words for millions of businesses when he pledged a government that regulates and protects consumers without smothering economic growth,” said AMI President and CEO J. Patrick Boyle in a guest editorial in today’s edition of Politico, one of the primary newspapers covering Capitol Hill.

The president’s recent Executive Order directs a government-wide review “to remove outdated regulations that stifle job creation and make our economy less competitive.”

“Indeed, this executive order may be just in the nick of time,” Boyle said, noting that the number of government regulations has soared in the last two decades, with their annual cost in the past two years predicted to reach a staggering $26.5 billion, according to recent Heritage Foundation data.

Currently, there are nearly 200 regulations on the docket, including a little-known – yet significant – proposed rule by a little-known Agriculture Department agency, the Grain Inspection, Packers and Stockyards Administration (GIPSA).

“This rule, while obscure, could effectively dismantle the business models used by livestock producers, meat packers and poultry processors – setting the industry back decades in its customer-driven evolution toward value-added products. It was introduced by an Agriculture Department official, who was formerly a trial attorney,” Boyle wrote.

Boyle noted that under the proposed rule, marketing agreements would become more “legally risky,” and subject to challenge by livestock producers who aren’t part of the agreement. This would discourage use of such agreements, forcing a return to the days of relying on the “spot market” — and ultimately reduce the options available to consumers.

Boyle said the proposed rule would impose other burdensome new requirements, like prohibiting packers from selling livestock to other packers.

“This provision won’t solve small producers’ real challenges — from rising feed costs to a declining economy and increasingly demanding consumers,” Boyle said.

According to Boyle, the rule also threatens to make the U.S. industry less competitive globally, because international competitors wouldn’t need to comply with these rules. The net result could be an increased trade deficit, elimination of domestic jobs and reduced government revenues — when severe austerity measures are already in place.

“The USDA rule is a perfect example of what Obama called ‘regulations that stifle job creation and make our economy less competitive,’” Boyle said. “This “little” rule would have staggering negative economic consequences.”

According to a recent John Dunham and Associates study, the rule could eliminate 104,000 U.S. jobs, reduce national gross domestic product by $14 billion and cost $1.36 billion in lost revenues to the federal, state and local governments.

“Under the new government regulatory paradigm, USDA should withdraw the proposed rule, because it threatens to dismantle the supply chain in one of the most dynamic and competitive sectors of U.S. agriculture,” Boyle urged.

“It would be ironic, and unfortunate, that in its quest to eliminate economically stifling regulations, the administration missed rules its agencies were introducing right under its nose,” Boyle concluded.

To view the op-ed in its entirety, click here: http://www.meatinstitute.org/ht/a/GetDocumentAction/i/66871


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