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Corn+Soybean Digest

Fed-Up With Regulations

From time to time, U.S. presidents have declared their intentions to tame the federal regulatory monster. None, so far, have succeeded.

New regulations pour from more than 100 federal agencies at a rate of about 4,500 a year. These cost Americans about $800 billion a year, or some $8,000 for every household.

No one knows how much regulation costs agriculture, but when the American Farm Bureau Federation made a crude estimate in the mid-1990s, it came up with $20 billion. To put that in perspective, the farm property tax bill for 2001 totaled only $7 billion.

In 1994, as Republicans took control of Congress, there was hope of a broad rollback in federal regulations. That never happened. “Obviously, they lost a certain amount of their fervor as they became part of the establishment,” says Ross Korves, chief economist for the Farm Bureau.

But Korves thinks the problem goes deeper than a loss of enthusiasm for trimming the federal regulatory behemoth. “The big problem is that Congress wasn't given enough information to really get hold of the issue,” he says.

Farm Bureau wants to solve that problem by selectively documenting costs of some regulations already on the books and of a small number of future regulatory proposals. The goal is to get rid of some current regulations and keep the worst proposals from becoming law.

“We think we've got to pick out a couple of areas of regulation and pound the heck out of them, and make people see the costs involved,” says Korves.

That may mean some big wins for farming here and there. Even so, neither Korves nor many other observers expect the age of federal regulation to end. “The federal regulatory state is here to stay,” said John Graham, a top Bush administration official in the Office of Management and Budget, in a speech last fall.

But Graham does promise an era of regulatory common sense. “What the President seeks is a smarter regulatory process based on sound science and economics,” he said. “A smarter process adopts new rules when market and local choices fail, modifies existing rules to make them more effective or less costly and rescinds outmoded rules whose benefits no longer justify the cost.”

One reason more regulations are likely is that many Americans demand them when their own interests are at stake. Farmers, for example, depend on federal regulations to keep foot-and-mouth and Mad Cow disease out of the country. If the government fails, feed animal herds would be culled and feed corn sales would plummet. When federal regulators failed to keep StarLink corn out of the human food supply, corn prices suffered.

So with Americans clamoring for regulation, farmers can expect more, not fewer, rules. One likely target is nitrogen runoff from the Mississippi River. Nitrogen is primarily blamed for oxygen depletion in a large area of the Gulf of Mexico, says Otto Doering, an ag economist at Purdue University.

Though Doering thinks farmers will escape new nitrogen controls during the Bush presidency, they'll likely face them someday. These regulations could hit the Upper Midwestern corn- and soybean-growing states whose rivers feed the Mississippi. The group includes Minnesota, Iowa, Illinois, Indiana, Ohio and Missouri.

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