Obama Regulations Putting Family Ranchers at Risk

September 16, 2011

Cattle Rancher Robbie LeValley on Uncertainty, Unintended Consequences of Proposed USDA Regulations

WASHINGTON, DC – The House Committee on Oversight and Government Reform today released “Voices of Recovery: Robbie’s Story,” in which 4th generation Colorado rancher Robbie LeValley underscores the job-killing uncertainty family ranchers face under the Obama Administration’s proposed new regulations of livestock marketing practices. The proposed agricultural regulation dismantles the proven business model of small ranchers like Mrs. LeValley and is just one of the Obama Administration’s 219 proposed“economically significant” regulations that every year will cost American families and businesses at least $100 million each. Mrs. LeValley delivered her front-line regulatory facts during a Wednesday Oversight Committee hearing to expose the true costs of flawed federal regulations.

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Click Here to Watch “Voices of Recovery: Robbie’s Story”

In 1995, Mrs. LeValley cofounded Homestead Meats in Hotchkiss, CO, growing the business to support 13 jobs. Homestead produces 1/3 of its beef on-site in its own US Department of Agriculture (USDA) regulated packing facility and sells the rest. To stay competitive, Mrs. LeValley allied with a larger packing company to harness their market share: Homestead provides the cattle and the packer provides feedback on the beef quality so Mrs. LeValley can improve her stock. These direct marketing relationships allow small, family-owned ranchers to compete in a global economy.

The proposed Obama Administration regulation, however, will force Homestead and its packing partner to post all of their business transactions on the USDA website, justify all deviations from the market price and open up their business relationship to bureaucratic meddling and possible punishment. Worse, the vague wording of the proposed regulation opens up small businesses like Homestead Meats to lawsuits by the USDA, or even a competitor.

“This will be a trial lawyer’s bonanza and will devastate small businesses such as mine,” said Mrs. LeValley in her testimony. “Arbitrary judgment by a federal agency will only increase paperwork and costs for small business owners like me. Who pays for this increased intervention and litigation? I will.”

The unintended consequence of the proposed regulation? The directmarketing partnerships powering many of America’s 687,000 ranches will be risky, if not virtually impossible, to continue.

The “proposed rule on livestock and poultry marketing will destroy our small business model, force us to lay off our employees, cripple our ability to market our cattle the way we want to, and limit consumer choice,” said Mrs. LeValley in her opening statement. “Our cattle marketing contracts are the heartof our small business and they do not warrant being posted on the Internet,receiving additional government intervention, or being subject to potentiallitigation.”

A recent economic impact study found the proposed livestock marketing regulation would reduce our national GDP by $14 billion and jeopardize 104,000 jobs in the meat and poultry industry. Hardest hit would be rural livestock producers like Homestead Meats, with up to 21,274 jobs in jeopardy. Consumers would also face higher prices: under the proposed rule, the average American family would have to spend $22 more on beef each year.

On top of threatening job creators like Homestead Meats with economic uncertainty and higher costs, a new OversightCommittee report found the Obama Administration failed to follow the law when proposing the livestock marketing regulations. In violation of the President’s Executive Order, USDA initially failed to conduct a cost-benefit analysis of the proposed regulation. Only after pressure from 60,000 public comments did USDA relent and agree to study the potential impact of the regulation on American job creators.

“For years USDA has promoted exactly what we are doing – selling directly to the consumer…adding value to the end product; and producing local food,” said Mrs. LeValley in her writtentestimony. “However, under this rule, our marketing options will be limited because we were innovative and took market risks. Again, it is both cattle producers and customers that lose.”

New Oversight Regulations Report

Despite President Obama’s frequent promises of regulatory relief, his bureaucrats have instead gone into overdrive. The new Oversight Committee report, “Broken Government: How the Administrative State has Broken President Obama’s Promise of Regulatory Reform” captures the worsening federal regulations American job creators face under the Obama Administration. Key findings include:

The number of proposed rules has increased from 2,044 in 2009 to 2,439 in 2010;

Employment at regulatory agencies has climbed 13 percent since President Obama took office, and the number of staff working on regulatory matters is on schedule to increase at a rate of 10,000 new employees per year in 2011 and 2012;

The number of full time regulatory employees is expected to reach an all-time high of 291,676 in 2012;

The Obama Administration has already imposed 75 new major regulations that will cost more than $380 billion over ten years;

The Administration has 219 economically significant regulations in the pipeline right now—that, if finalized will impose costs of at least $219 billion on the economyover ten years.

Hearing Videos

Cass Sunstein, Administrator of President Obama’s Office of Information and Regulatory Affairs (OIRA), praises the Oversight Committee’s work exposing the true costs of federal regulations: http://www.youtube.com/watch?v=NItcZTrzDqg

Rep. Scott DesJarlais (R-TN) and Robbie LeValley discuss how the proposed livestock marketing regulation would effectively put Homestead Meats out of business:http://www.youtube.com/watch?v=I9jwqY2cvjM

Rep. Tim Walberg (R-MI) grills Administrator Sunstein on the Obama USDA’s failure to follow its own cost-benefit analysis rules when drafting the proposed livestock marketing regulation: http://www.youtube.com/watch?v=IuH2UyUb5HY

AmericanJobCreators.com is a House Republican initiative to expose the true costs of government regulation and part of an ongoing conversation between Congress and the people we serve about the regulatory relief needed to support private-sector job growth.

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