U.S. Senator Tommy Tuberville (R-Auburn) joined his Senate colleagues in expressing concern about a new rule being proposed by the Securities and Exchange Commission (SEC).
Tuberville and 31 other U.S. Senators sent a letter to SEC chairman Gary Gensler urging him to rescind a new rule on “Enhanced and Standardization of Climate-Related Disclosures for Investors” that they argue puts an undue burden on American farmers.
“In particular, we have serious concerns regarding the SEC’s regulatory overreach, as well as the impact that this proposed rule will have on the agricultural industry. As such, we urge you to rescind the proposed rule,” the letter says.
The senators argue that this could significantly hurt agricultural output in the United States.
“This substantial reporting requirement would significantly burden small, family-owned farms with a new, complex and unreasonable compliance requirement,” the senators assert, “resulting in costly additional compliance expenses, reduced access to new business opportunities, and potential consolidation in the agriculture industry. It is entirely possible for instance, that these reporting requirements could force producers to track and disclose granular on-farm data regarding individual operations and day-to-day activities in order to stay compliant with the companies that purchase their products. Such a requirement would significantly hinder the productive capacity of our agricultural industry.”
The letter says the SEC has not properly studied how the new action could weigh down a large part of the American economy.
“As you know, in 2020 alone, the agriculture industry contributed over $1 trillion to the U.S. gross domestic product (GDP),” the letter continues, “and employed nearly 20 million people, accounting for 5% of our GDP, and over 10% of our domestic workforce. Given that this proposed rule could have a significant impact on nearly 5% of our economy, it is only right that the SEC conduct proper due diligence and complete a cost-benefit analysis of the impact of this proposed rule on the agricultural industry before promulgating substantial and unworkable regulations.”
The lawmakers also say the SEC doesn’t have the legal authority to take this kind of action to begin with.
“Should the SEC move forward with this rule,” they argue, “it would be granted unprecedented jurisdiction over America’s farms and ranches, creating an impractical regulatory burden for thousands of businesses outside of the scope of the SEC’s purview, including our nation’s farmers and ranchers.
They then conclude that the new rule should be set aside.
“We believe that this rule reflects a significant overreach of the SEC’s traditional financial
markets focus, and we urge you to rescind it,” the letter says.
Earlier this month, over 100 members of the House of Representatives, including Alabama’s GOP congressional delegation, also expressed concern about the proposed rule in a letter to the SEC chairman.