122 



Mr. Chairman, the economic impact of regulations throughout the economy has been widely 

 studied. One credible estimate of the regulatory economic impact puts the cost as high as 10 

 percent of GDP. The U.S. food and fiber sector represents about 20 percent of GDP. We 

 must therefore assume that agriculture bears billions and billions of dollars of costs in 

 complying with regulations. 



The real cost of regulatory overkill, Mr. Chairman, is the lost productivity of fanners. Instead 

 of finding more efficient and productive ways to produce and market a bushel, a bale, a 

 pound or a hundredweight of food and fiber, we are required to engage in unproductive 

 regulatory compliance activities. 



We must remember that a day spent dealing with four different federal agencies over what is 

 or is not a wetland on private property is a day lost forever. A day lost to the frustration of 

 dealing with the federal hodgepodge of farm worker rules and regulations is one less day a 

 farmer can farm. 



Our future is now very uncertain because we simply do not know what is coming next in the 

 law and how it will affect traditionally protected property rights. The wetlands issue received 

 much attention over the last few years, but that is only a part of a much larger concern. The 

 Endangered Species Act is a major uncertainty for many farmers and ranchers. FIFRA 

 provisions have both direct and indirect costs to farmers. Conservation compliance is also 

 imposing considerable costs on thousands of farmers. 



In addition, there are a tremendous number of regulations and programs contained in current 

 law that have yet to be fully implemented (i.e., numerous conservation programs including the 

 wetlands reserve program, water quality incentives and integrated farm management 

 programs). Many of these programs have never been properly funded to provide producer 

 assistance in making changes on farms and ranches. 



Similarly, federal laws and regulations in the area of finance and marketing are having a 

 highly deleterious impact on die agricultural sector. Financial institutions must comply with a 

 variety of environmental checks before making farm mortgages. Potential hazardous waste 

 sites dictate an expensive and time consuming hazardous waste appraisal on farm and 

 agribusiness properties. An unbelievably convoluted IRS regulation centering on the 

 Arkansas Best decision penalizes farmers for using legitimate hedging strategies. 



Out of this total regulatory uncertainty will ultimately come a reduction in farm asset values. 

 When uses of farm assets become more and more restricted, the income potential will be 

 limited. There will be fewer incentives to produce food and fiber and fewer farmers able to 

 stay in business. 



A large part of the difficulty in getting the U.S. economy on a long-term growth track can 

 surely be laid at the doorstep of the regulatory entanglements producers of real goods and 

 services now must confront. Farm Bureau called for a regulatory moratorium two years ago. 



