More than 2 million farms dot the landscape of our country, in all 50 states and in areas such as Puerto Rico. You can find farmers and ranchers raising almost every type of crop and livestock to keep our nation fed. You can find us serving our neighbors and our communities and using the latest innovations to improve sustainability. But there’s one place you won’t find us, and that’s Wall Street. So why is the SEC about to give itself the authority to regulate our farms and family farms functionally, when in reality we weren’t actually under the authority of the SEC? It’s an alarming question, and one we’re facing head-on now.
A little background here — the Securities and Exchange Commission recently proposed a new rule, “Enhancing and Standardizing Climate Disclosures for Investors,” which would require publicly traded companies to provide climate information from the entire value chain in their annual filings and reports. This means that companies that are not owned or controlled by the public company will fall under these comprehensive reporting requirements. As farmers and ranchers know, there are few products in the supply chain that do not trace their beginnings to a farm or ranch. These farm and ranch products already face extensive local, state and federal regulations. With this rule, reporting requirements are likely to accumulate on farms and ranches of all sizes and may force farmers and ranchers to disclose personal information and agribusiness data.
This is an override — plain and simple — by a federal agency that was never designed or intended to regulate farms. Furthermore, the entire procedure was lacking in transparency and oversight. The Securities and Exchange Commission (SEC) released its proposed rule, all 510 pages, with only 39 days initially for public review and comment. The USDA joined 119 other agricultural organizations in calling for the Securities and Exchange Commission to extend the suspension period to allow time for public review and targeted input. Just this week, the Securities and Exchange Commission (SEC) announced an extension of public comment through June 17. The fact that the Securities and Exchange Commission has absolutely backed off on the suspension period is testimony to the importance of standing together across the farming community to make our voices heard.
It’s hard to fathom the long-term impact of this rule, but it will undoubtedly put many American farms and ranches at risk – 98% of them are family businesses. Unlike the large corporations that are currently regulated by the SEC, farms and family farms do not have teams of compliance officers. Onerous reporting requirements may prevent small, family-owned farms from doing business with public companies or companies that provide those value chains. The SEC rule could put even greater strain on our food system at a critical time and lead to the further strengthening of agriculture where farms and family farms lack the resources to meet the requirements designed for large corporations. Finally, the rule undermines decades of sustainability efforts and the achievements of American farmers and ranchers who have led the world in reducing agricultural emissions and adopting practices that improve soil health and water quality.
The Bureau of Agriculture and our partners across agriculture will continue to engage with the Securities and Exchange Commission and our representatives on Capitol Hill, urging the agency to consider the burden they place on farmers and ranchers, who are critical to the value chain, our economy, and our nation’s food security. We also encourage you to get involved in making your voices heard about how this rule affects your farm or farm. Together, we can stand strong to protect our nation’s sustainable food, fiber and renewable fuel supplies.