Study finds GISPSA to be costly regulation

An economic impact study conducted by John Dunham and Associates, Inc. concludes that the Obama Administration’s proposed rule on livestock marketing could leave approximately 104,000 additional Americans without jobs. Consequently, the study reports a $14 billion reduction in the National Gross Domestic Product.

“The estimated rate of producer job loss in rural America would be high. When folks are forced out of the livestock industry, they don’t come back,” said Sam Carney, National Pork Producers Council president. “Given this study, it is now more important than ever for USDA to conduct a thorough economic analysis so that producers understand the true cost of the Administration’s proposed regulations.”

The U.S. Department of Agriculture’s (USDA) Grain Inspection, Packers and Stockyards Administration proposed the rule on June 21, 2010, in response to a request made by Congress. However, National Cattlemen’s Beef Association President (NCBA) Steve Foglesong said the rule goes beyond the intent of Congress and serves as another example of government overreach into private business. 



“I am tired of hearing this Administration talk about job creation when their efforts seem to be more focused on job destruction. In fact, USDA Secretary Tom Vilsack held a news conference today touting the Administration’s efforts to create jobs in rural America. Really? Enough is enough,” Foglesong said. “Congress did not direct USDA to write a rule that would take away the rights of cattle producers to be innovative and creative by embarking on contract agreements for premium, consumer-demanded beef. The goal of cattle producers is to provide the very best and safest product possible, while sustaining our family owned operations for future generations. The administration should help us accomplish these goals and not throw them down the drain along with 104,000 jobs.”

The study found that retail meat prices would increase 3.33% at a national level, which would result in a 1.68% drop in consumer demand.

Foglesong said family farmers and ranchers would also witness a reduction in beef demand and profitability. He said it is unfortunate that this study was even conducted but USDA left no choice. USDA did not conduct a comprehensive economic analysis and has indicated to 115 members of Congress calling for an economic study that one will not be conducted. 



“Why wouldn’t USDA want to do an economic analysis? Why wouldn’t the proponents of this rule want an analysis to build their case? This doesn’t make any sense,” Foglesong said. “This country is facing record unemployment and this Administration seems determined to surpass their own record and send even more Americans to the unemployment lines. I encourage anyone concerned about this economy, rural America and safe and affordable food to tell USDA to pull this rule. It is high time we stop this pervasive invasion of government into private business.” 



The study, commissioned by the American Meat Institute, is available online in an interactive format that aggregates economic impact on national, state and congressional district levels.

“At a time of record unemployment, slow economic recovery and rising poverty levels, it is unfathomable that the administration would propose a rule that could cost one American job, let alone 104,000,” said J. Patrick Boyle, AMI President and CEO. “As the analysis shows, these are not just jobs in meat packing or livestock production, but in nearly every sector of the American economy.  This is, quite simply, reckless regulation.”

Boyle added that according to Gallup’s 2010 annual Governance survey, an expanded proportion of Americans (59% — up eight percentage points from a year ago) believe the government has overstepped its bounds and grown too intrusive and too powerful.

To view the complete study and the impact of a specific state or congressional district, go to www.MeatFuelsAmerica.com/GIPSA. For more information on the proposed rule, visit NCBA’s Web site.

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