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Regulatory burden: Real or perceived?

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If you want to start a spirited debate, invite Democrats and Republicans to dinner to discuss whether or not too much federal regulation is killing existing jobs and creating a chilling effect on farms and small businesses who might otherwise be tempted to expand and hire.

Democrats argue that, with the exception of new health care rules that they view as necessary, not burdensome, there have been no new regulations enacted. And some of the new rules being proposed, on clean water, for example, are the result of U.S. Supreme Court decisions, not because of the Obama administration's desire to regulate. They say regulatory overreach is just a myth, generated by Republicans eager to score political points.

Members of the GOP have repeatedly blamed the Obama administration for regulatory overkill they say is keeping companies from creating jobs and is adding costs when businesses can least afford them. They frequently cite health care reform as a huge burden on businesses, but also point to the Environmental Protection Agency for proposing new limits on everything from dust to pesticide application.

This debate played out across nation's mid-section last week as President Barack Obama made a three-state swing through rural America. At a stop near Atkinson, Ill., a farmer told the president:

"We enjoy growing corn and soybeans, and we feel we do it as safely and efficiently as we possibly can. Please don't challenge us with more rules and regulations from Washington, D.C., that hinder us from doing that. We would prefer to start our day in a tractor cab or combine cab rather than filling out forms and permits to do what we'd like to do."

The president asked if there was a particular rule the farmer was worried about, and the farmer responded:

"We hear what's coming down about noise pollution, dust pollution, water runoff. Sometimes the best approach is just common sense, and we are already using that."

But the president, who said "nobody is more interested in seeing our agricultural sector successful than I am," suggested the farmer's concerns were unfounded.

"Here's what I'd suggest--if you hear something is happening, but it hasn't happened, don't always believe what you hear...the lobbyists and the associations in Washington, they'll get all ginned up and they'll start sending out notices to everybody saying look what's coming down the pike. And a lot of times we are going to be applying common sense. And if somebody has an idea--if we don't think it's a good idea, if we don't think that there's more benefit than cost to it, we're not going to do it," the president said.

But apparently, the regulatory burden rap has been hitting home, especially as the president's approval rating for handling the U.S. economy has hit record lows.

To demonstrate that the Obama administration is serious about reducing red tape, officials will release final plans this week for ending or cutting back hundreds of regulations, which they say will save businesses about $10 billion over the next five years. The proposals stem from a government-wide review of existing federal regulations ordered by the president earlier this year.

But even this latest effort is unlikely to calm those who believe that there are still too many new rules and regulations coming out of Washington. In an effort to point out some of the new burdens coming down the pike, U.S. Sen. Pat Roberts (R-KS), sent a letter to the president outlining directives and regulations that he says would adversely affect farmers and ranchers in rural America.

"I want to assure you that this farmer's concerns are justified," Roberts said of the Illinois farmer who asked the president to stop new regulations. "To better inform you about the actions being taken by your administration, included below is a list of proposed rules, directives and actions impacting rural America since your inauguration. While this list is not complete or comprehensive, it provides an overview of the increased regulations and resulting costs American agriculture and rural America face due to actual or proposed actions taken by federal agencies under your direction." Roberts' list of concerns is summarized in the section below.

Editor's note: Agri-Pulse Editor Sara Wyant can be reached at www.agri-pulse.com.

GIPSA Rule Impacting Livestock Producers--USDA has proposed a new regulation for livestock marketing that will undo years of progress and innovation in the livestock industry. A 2007 GIPSA study showed that over 10 years a 25 percent reduction in alternative marketing arrangements would cost feeder cattle producers $5.1 billion; fed cattle producers $3.9 billion; and consumers $2 billion. If marketing arrangements were eliminated, the 10-year cumulative losses for producers and consumers would top $60 billion.

NPDES permits--This duplicative regulatory burden is scheduled to go into effect on Oct. 31, less than three months from today. It will require 5.6 million applications of pesticides by 365,000 applicators to have NPDES permits to apply pesticides. These permits are duplicative, unnecessary and will add a new requirement under the Clean Water Act for pesticide applications, which are already regulated under the Federal Insecticide, Fungicide and Rodenticide Act.

National Ambient Air Quality Standards for Ozone--EPA has proposed to strengthen the primary ozone standard. Under the proposal, the vast majority of counties with ozone monitors would be considered in nonattainment. If finalized, this could mean that additional rural and/or agricultural counties are designated as non-attainment. This will limit the ability of farmers to manage crop residue on their farms and will create a substantial new burden on livestock operations where ammonia and methane are naturally emitted by animals.

PM 10/Dust--EPA is preparing to reconsider its large particulate matter (PM 10) standard. EPA's Clean Air Advisory Committee has recommended lowering the standard. This is problematic because the current standard is already difficult for many rural counties, especially in the West, to meet. Working and harvesting farm fields is an inherently dusty business, as is driving down rural dirt and logging roads. A change in this rule will make it impossible for many farming and forestry operations to be in compliance and could result in substantial fines for many family operations.

Water Quality Standards Rulemaking--Last year, EPA announced it will propose a rule to strengthen anti-degradation standards, adopt a presumption that all U.S. waters should be fishable and swimmable, and require state decisions to be approved by EPA. In effect, this proposal would federalize decisions historically made by the states under the Clean Water Act.

Climate Change--Proposed new greenhouse gas regulations will increase the cost of virtually every input used in agriculture and forestry production. These regulations will not impact just producers but also agribusinesses. As these businesses face increased costs, those expenses will be passed on to producers and ultimately consumers. This will likely lead to higher food and fuel costs for all Americans while the economy is still struggling.

Clean Water Act Strategy--Earlier this year the administration announced new "guidance" for federal employees to implement the Clean Water Act, thereby expanding the water bodies included under regulation. This action was taken without adherence to federal regulatory process through the promulgation of a regulation in the Federal Register. This expansion of the Clean Water Act will impact farmers and ranchers, not to mention increased burdens on states.

Spray Drift Policy--Last year, EPA proposed a rule to help states identify and prevent drift. The proposed rule counters decades old EPA policies that acknowledge small levels of spray drift are unavoidable. In fact, EPA has long recognized some de minimus level of spray drift will occur from most or all applications as a result of using pesticides. The proposed policy establishes a precautionary principle approach and is inconsistent with FIFRA.

Prior Converted Cropland--In April 2009, the U.S. Army Corps of Engineers adopted a policy that "once a property changes from agricultural use to non-agricultural use, a prior converted cropland designation is no longer applicable." Therefore, the moment agricultural use ceases on PCC, the PCC designation is no longer valid and a jurisdictional determination will be conducted under a provision in the Corps' Wetlands Delineation Manual that allows the Corps to assert jurisdiction over areas that do not exhibit all three wetlands characteristics. This is contrary to current Corps of Engineers policy and was adopted without any public input.

Atrazine--EPA has announced an unscheduled re-review of atrazine. Atrazine was favorably reviewed by EPA in 2006 and is scheduled to begin registration review in 2013. Reviews should be based on scientific justifications and established timelines and should not be done in response to a single press report.

Arsenic and Dioxin Risk Assessments--EPA is considering a cancer risk factor for arsenic that will cause virtually all soils to exceed the agency's target risk range as well as a risk factor for dioxin that will cause nearly all agricultural products to exceed the agency's level of concern. This means rice, wheat, corn meal, peanuts, apples, lettuce, carrots, onions, sugar, and tap water would be considered unsafe. Since 2000, the incidence of dioxin contamination has dropped 90 percent.



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