Study: GIPSA Proposed Rule Could Cost Jobs and Reduce GDP

October 22, 2010 03:48 AM
 

The Grain Inspection, Packers and Stockyards Administration (GIPSA) proposed livestock procurement rule, if implemented, could cost 104,000 Americans their jobs and reduce the national GDP by $14 billion, according to a new study conducted by John Dunham and Associates on behalf of American Meat Institute (AMI).

The study found that the disruption and resulting inefficiencies in the market should the rule be implemented would increase retail meat prices by 3.33% at a national level, causing a 1.68% decrease in consumer demand for potentially lower quality meat and poultry products. 

The study’s findings also highlight the fact that livestock producers would be especially affected by the implementation of this rule, losing as many as 21,274 jobs, many in rural America. 

This new study is the first to quantify the proposal’s potential impact. 

“At a time of record unemployment, slow economic recovery and rising poverty levels, it is unfathomable that the administration would propose a rule that could cost one American job, let alone 104,000,” said AMI President and CEO J. Patrick Boyle.  “As the analysis shows, these are not just jobs in meat packing or livestock production, but in nearly every sector of the American economy.  This is, quite simply, reckless regulation.”

Boyle added that according to Gallup's 2010 annual Governance survey, an expanded proportion of Americans (59% – up eight percentage points from a year ago) believe the government has overstepped its bounds and grown too intrusive and too powerful.

“This government intervention will dismantle 20 years of progress that has helped the U.S. meat and poultry industry to deliver the safest, most affordable meat and poultry supply in the world,” said Boyle.  “As our study shows, this protectionist policy proposal would do nothing but harm Americans who work every day to put food on our tables.”

“As an economist who makes his living studying and modeling the economic impact of government regulations on businesses and industries, I have seen firsthand the unintended consequences of misguided policy proposals like the one proposed by USDA,” noted John Dunham, president of John Dunham and Associates, who conducted the study.  “It is noteworthy that USDA says this proposal will revitalize rural America, yet my analysis shows it will actually cause substantial job losses.”

The complete study, a methodology report and frequently asked questions and answers can be found at www.MeatFuelsAmerica.com/GIPSA

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