* Factors driving regulatory developments in the U.S. Agriculture Sector * Explaining the need for marketing, price, and income support and trade management * Recognize the obstacles of regulatory reform * Explaining the impact of budget pressures on reforms

1. New Regulation Issues
in U.S. Agriculture
e-Learning Course
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2. Learning Objectives
After completing this course, you will be able to:
✓ Describe the factors driving regulatory
developments in the U.S. Agriculture Sector
✓ Explain the need for marketing, price, and
income support and trade management
✓ Recognize the obstacles of regulatory reform
✓ Explain the impact of budget pressures on
reforms
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3. Topics
1 Regulatory Developments in the U.S. Agriculture Sector
2 Marketing, Price and Income Support and Trade Management
3 Regulatory Reform Lagging
4 Regulatory Compliance Budget Pressures
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4. New Government, New Regulations
Engaging in agricultural trade involves global considerations of jurisdiction,
precedent and monitoring applicable rules as core compliance considerations – the
bigger the operator, the broader the product mix, the more complex compliance
becomes.
Did you know?
At the USDA alone, the Code of Federal Regulations includes
over eleven thousand pages of rules to enforce, covering
everything from specialty food promotion to farmers’ markets.
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Early feedback from the Trump Administration was focused on export and trade
promotion which add regulations in that area but the FY2018 budget suggests as
much as a 21% cut in USDA funding. It appears the Farm Service Agency budgets will
be sharply reduced as the US Government is trying to shift many of these programs
to the private sector (FSA 2016 “Impacts”). Dairy margin support and farmer forage
insurance programs are slated for cuts.

5. What Defines Agricultural Regulations?
Today, agricultural regulation in the US is
defined by a sprawling bureaucracy
spanning the US Department of
Agriculture [USDA] (broad scope here),
the Environmental Protection Agency
[EPA] (EPA Statute, farm activity), the
Department of Labor [DOL] (every aspect
of employment, including Occupational
Health and Safety [OSHA] and of
“temporary” seasonal workers).
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6. Topics
1 Regulatory Developments in the U.S. Agriculture Sector
2 Marketing, Price and Income Support and Trade Management
3 Regulatory Reform Lagging
4 Regulatory Compliance Budget Pressures
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7. Risks Faced by Farmers
The primary areas of Federal regulatory control in agriculture generally involve
rules and regulations deemed to support producer prices, exports and import
protection. There has yet to be full implementation of the 2014 Farm Bill and many
farmers’ cooperatives feel the regulatory burden for the 2M family farmers is
putting many of them at risk.
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8. Need for a Strong Farm Safety Net
The American Farm Bureau Federation underlined in its letter the need for a strong
farm safety net in the face of financial hardship in farm country not seen for decades.
“While we do not yet have a full-fledged financial crisis in rural America, a good many
farmers and ranchers are not going to be able to cash-flow in 2017,” 12 farmer
cooperative groups wrote. “With USDA projecting continued low prices in 2018 and
beyond (we are at risk and farm safety is likely to suffer first.)”
Net farm income has dropped 50 percent in the last four years—the largest four-year
percentage decrease since the Great Depression and the strong dollar has put
significant pressure on export competitiveness.
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9. Topics
1 Regulatory Developments in the U.S. Agriculture Sector
2 Marketing, Price and Income Support and Trade Management
3 Regulatory Reform Lagging
4 Regulatory Compliance Budget Pressures
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10. Regulation Areas
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The Administrative Procedure Act, which governs how regulations are set forth, has
not changed substantially in the 70 years while new regulations have come into
force like the Clean Water Act, the Clean Air Act, the Endangered Species Act,
Superfund, Wetlands Regulations, the Consumer Product Safety Act, the Taft-
Hartley Act, Medicare, the Occupational Safety and Health Act, banking laws such
as Dodd-Frank, or the Affordable Care Act.
Marketing
Orders
Price Support
Program
Income
Support
Program
Import
Controls and
Trade Barriers
Export
Subsidies
Click each button to know more
Many of these existing regulations treat U.S. agriculture as a strategic industry and
include five classes which involve substantial industrial subsidies and market price
and production supply distortions:

11. The Agricultural Marketing Service exists for the purposes of "enforcing product
quality standards, regulating the flow of product to the market, standardizing
packages and containers, creating reserve pools for storable commodities, and
authorizing production and marketing research and advertising."
Marketing Orders
X

12. These Price Support programs keep commodity market prices artificially high by
guaranteeing that the government will purchase any amount of a specified class of
product such as cheese, butter or nonfat dry milk from processors at a set minimum
price.
Price Support Program
X

13. The Income Loss Contract program artificially support non-economic producers when
price controls fail. At the minimum, these programs encourage overproduction, and
they are likely at significant risk with budget cutting.
Income Support Program
X

14. These regulations help large volume farm producers at the expense of consumers and
lower cost producers overseas through tariff subsidy schemes.
Import Controls and Trade Barriers
X

15. Since agriculture is still a source of trade surpluses, low production costs convey a
comparative advantage to US producers using “Export Incentive Programs”, especially
in dairy.
Export Subsidies
X

16. Regulatory Reforms Stalled
The Senate bill, S.951, the Regulatory Accountability Act of 2017 (RAA) has been
opposed by industrial farm combines and the House Freedom Caucus and has been
stalled despite the Trump Administration has called on cutting regulations. The U.S.
Chamber of Commerce has instead focused on cutting Environmental Protection
Agency (EPA) regulations.
Back NextClick the image icon to view the decision making process for safeguards

17. Topics
1 Regulatory Developments in the U.S. Agriculture Sector
2 Marketing, Price and Income Support and Trade Management
3 Regulatory Reform Lagging
4 Regulatory Compliance Budget Pressures
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18. Budget Cuts
Regulatory compliance is likely to suffer under budget cuts looming and the USDA
is looking to have private companies fill the gaps in risk management and food
safety. Crop insurance programs look like a major area of vulnerability that could
compel farms simply to drop coverage. The budget recently released by the White
House would cut the federal crop insurance program by $28.5 billion — or roughly
36% over 10 years.
A Governmental Accountability Office (GAO) analysis shows that a $40,000
premium support cap would have affected 26% of total insured liability in the crop
insurance program in 2011. “So while a premium subsidy cap might only impact a
small number of producers, it would put a very large portion of crop production at
risk.” Regulatory reform will be needed to dramatically increase private
participation as very few of the larger, well capitalized insurers write policies in
these areas.
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19. Food Safety Risks
Similarly, food safety could be at risk as internet driven inspection and anti-
tampering systems are not widely deployed. The USDA Food Safety and Inspection
Service (FSIS) provides information to producers and agricultural businesses to help
them maintain compliance with federally defined regulations for their
establishments.
FSIS provides compliance guidelines for various fields, food safety assessments,
specified risk materials, information of food borne diseases, guidance for product
recalls, labeling and other areas of compliance interest.
Some private companies such as AgriculturalCompliance.com offer turnkey
agricultural compliance programs, but these are dramatically more expensive than
the services provided by state-based Farm Service Agencies.
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20. Impact of Trade Promotion
According to the USDA Economic Research Service, “the most concentrated food
processing industries in terms of sales include cane sugar processing (95% generated
by the four largest firms), wet corn milling (84%), beet sugar processing (82%),
soybean crushing (82%), breakfast cereal manufacturing (80%), and malt
manufacturing (73%).”
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Of course, if trade promotion garners the support it deserves, there will be
compliance issues that emerge – especially if NAFTA gets renegotiated and
bilateral trade deals get passed. The National Farmers Union recently issued a fact
sheet regarding CR4 – the four firm consolidation ratio- citing farmland
consolidation and rural depopulation as evidence.

21. Knowledge Checks
Which of the following parties play an active role in defining agriculture
regulations?
Back Select the correct option.
⃝ USDA
⃝ EPA
⃝ the Department of Labor
⃝ All of the above
⃝ None of the above

22. Knowledge Checks
Which of the following parties play an active role in defining agriculture
regulations?
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✓ All of the above

23. Knowledge Checks
There has yet to be full implementation of the 2014 Farm Bill and many
farmers’ cooperatives feel the regulatory burden for the 2M family
farmers is putting many of them at risk.
Back Select the correct option.
⃝ True
⃝ False

24. Knowledge Checks
There has yet to be full implementation of the 2014 Farm Bill and many
farmers’ cooperatives feel the regulatory burden for the 2M family
farmers is putting many of them at risk.
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✓ True

25. Knowledge Checks
Which of the following keeps commodity market prices artificially high?
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⃝ Price Support Program
⃝ Income Support Program
⃝ Import Controls and Trade Barriers
⃝ Marketing Orders
⃝ All of the above
Select the correct option.

26. Knowledge Checks
Which of the following keeps commodity market prices artificially high?
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✓ Price Support Program

27. Congratulations
For completing the e-Learning course
New Regulation Issues in U.S. Agriculture