Wall Street Rules Should Not Extend to Family Farms - April 17, 2023
Wall Street rules intended for publicly traded companies should not extend to family farms. That is the message the American Farm Bureau Federation and six other agricultural groups sent to the Securities and Exchange Commission. The SEC proposed a rule to require public companies to report on Scope 3 emissions, which are the result of activities not owned or controlled by a publicly traded company but contribute to its value chain. Public companies that produce goods from agricultural products would need to report emissions from the relevant agricultural operations. The farm groups’ concern is that the rule will burden family farmers and ranchers and drive further consolidation in agriculture—all for no real environmental benefit.
In a letter sent today to the SEC, the organizations stated, “This tracking will be extremely expensive, invasive, and burdensome for farmers and ranchers, at the cost of improved production practices that generate actual environmental gains. Family farms, particularly smaller ones, will be hardest hit, with the rule driving greater consolidation and fewer family farms. The easiest path for registrants will be to source their inputs from larger corporate operations with greater resources and more sophisticated data-gathering and reporting systems. Alternatively, registrants may simply vertically integrate their supply chains, leading to further consolidation.”
In the letter, the organizations ask the SEC to recognize it wouldn’t be appropriate to subject farmers to Scope 3 reporting requirements, and to draft a rule that specifies that companies cannot compel farmers and ranchers to provide emissions information.
“While farmers and ranchers play a vital role in America’s supply chain, 98% of farms are family owned and 90% of those are small,” the letter continues. “This means that a considerable part of the agriculture industry does not fall within the SEC’s direct regulation of disclosure information, which extends to regulating public companies (registrants and issuers).”
Signing onto the letter were AFBF, Agricultural Retailers Association, American Soybean Association, National Cattlemen’s Beef Association, National Corn Growers Association, National Pork Producers Council, and North American Meat Institute.
Read the full letter here.
Read a previous letter sent to the SEC here.