A couple of weeks ago, I was watching the modern remake of one of my favorite old westerns, The Magnificent Seven. In it, a group of gunslingers helps residents of the Old West town of Rose Creek defend themselves against a greedy industrialist and his posse. It was a battle for control; the rich and powerful versus everyday folks just trying to provide for their families.
A similar struggle for control is playing out before us through the Biden administration’s “all of government” climate agenda. In March, the Securities Exchange Commission (SEC) rode into town with a plan that would give them unprecedented power over all of our lives and businesses. The SEC issued a proposed rule that would require publicly traded companies to publish information about their “climate-related risks.” The rule would specifically compel disclosures about the company’s greenhouse gas emissions, including those from “upstream and downstream activities in its value chain.”
Let’s talk about what this actually means. Under this rule, a farmer who sells his or her products to a publicly traded company could be forced to keep track of every bit of carbon used to produce them. Recording every drop of fuel, pound of feed, and gallon of propane used at every step of every process would be wildly expensive and burdensome for even large farmers to comply with. It would be nearly impossible for small family farmers.
Even worse, the rule would also apply if the farmer sold goods to anyone else in the supply chain who eventually sells them to a publicly traded company. This would bring in grain elevators, co-ops, feed lots and pretty much everyone else a farmer might sell to.
Farmers do not have scores of attorneys and compliance staff to help them track and report data from daily farming activities, and often lack advanced computer software and, in many cases, a reliable internet connection to make such reporting even feasible. Beyond that, the rule would be incredibly invasive, forcing family farmers to hand data over that would tell the government almost every single thing about their business. The government hasn’t exactly shown itself to be good at keeping private data confidential, and the treasure trove of business data this rule would produce would surely be the target of hackers.
The sheer scope of this new requirement would be enormous. The SEC website lists over 63,000 companies with some type of reporting requirements. Approximately 2,400 of these companies are agricultural in nature. However, modern agriculture is intertwined with every single part of the economy. Farmers provide raw goods that are used in a huge variety of things, from auto parts and home insulation to corn starch and synthetic insulin. When you consider the “chain of commerce” language in this rule, almost every publicly traded company in America involves agriculture.
In response, Senator Joe Manchin (D-WV) said the proposed rules are “tainted” because the SEC has “seemingly politicized a process aimed at assessing the financial health and compliance of a public company.” More politics in our daily lives is just about the last thing we need. Further, 117 members of Congress and 16 Republican governors recently sent letters to the SEC urging it to withdraw the proposed rule.
The timing of this rule could hardly be worse. With the extreme supply chain volatility and inflation we are struggling with, we need more flexibility, not increased regulation and costs. This rule will not help the situation at all and will almost certainly make things worse.
Make no mistake about it, like the families in Rose Creek, we’re in a fight for the future of our farms and our communities. Farmers and ranchers don’t need billions of dollars worth of government regulations making it impossible to grow food, fiber and fuel for the world. The SEC should get off the farm and scrap this rule entirely. The proposed rule is open for public comment until June 17. Go to mofb.org/action to tell the SEC how this rule would be a disaster not just for American agriculture but also for the entire economy.