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Farmers need protection from SEC regulations

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Former House Agriculture Chairman Lucas introduced Protect Farmers from the SEC Act.

Former House Agriculture Committee Chairman Frank Lucas, R-Okla., has not forgotten a proposed rule from the Biden administration that had many in agriculture concerned about continued government overreach into the lives of farmers in the name of climate. Although first causing concerns months ago, Lucas has introduced a new bill to protect farmers from coming under further regulation.

On March 21, 2022, the U.S. Securities and Exchange Commission proposed a rule, “The Enhancement and Standardization of Climate-Related Disclosures for Investors” (climate disclosure rule), that would require registrants, publicly traded companies registered with the SEC, to include certain climate-related disclosures in their statements and periodic reports, including measured impacts for their entire supply chain. 

Specifically, the proposed rule requires a registrant to disclose information about its direct greenhouse gas emissions (Scope 1) and indirect emissions from purchased electricity or other forms of energy (Scope 2). In addition, a registrant would be required to disclose greenhouse gas emissions from upstream and downstream activities in its value chain (Scope 3) under many – if not most – circumstances. 

This unprecedented Scope 3 disclosure rule would require public companies to report emissions data from farms and ranches of all sizes, since a significant majority of agricultural products will be used or sold by a publicly traded company.

“While federal securities laws already require publicly traded companies to disclose material risks to investors, the SEC’s ill-advised climate disclosure rule undermines the materiality standard for environmental policy purposes. The proposed climate rule is so unwieldy and convoluted that publicly traded companies will be forced to require small, independent, family farms to report on-farm data regarding individual operations and day-to-day activities,” says Lucas. “In this capacity, the SEC would be granted unprecedented jurisdiction over family farms and ranches, hindering the ability of American farmers and ranchers to compete in global markets and creating onerous compliance requirements for operations with few or no employees.”

Specifically, the Protect Farmers from the SEC Act:

  • Prohibits the SEC from requiring an issuer of securities to disclose greenhouse gas emissions from upstream and downstream activities in the issuer’s value chain arising from a farm
  • Defines the production, manufacturing, or harvesting of an agricultural product through the Agricultural Marketing Act of 1946, outlines upstream and downstream activities, and defines greenhouse gases
  • Removes the SEC’s exemptive authority in relation to this Act

American Farm Bureau Federation President Zippy Duvall says AFBF appreciated Lucas for his efforts to ensure the SEC remains focused on Wall Street while farmers remain focused on putting food on the table for America’s families. “The Securities and Exchange Commission’s proposed climate disclosure rule could create substantial costs and legal liabilities for farm families. Unlike large corporations, farmers don’t have teams of compliance officers or attorneys dedicated to handling SEC compliance issues,” explains Duvall.  

“The SEC should stick to regulating Wall Street, not main street,” says National Cattlemen’s Beef Association Executive Director of Natural Resources Kaitlynn Glover.

“This regulation could add layers of reporting requirements on wheat farmers that are focused on producing a quality wheat crop for domestic and international customers, says said National Association of Wheat Growers President and Washington state wheat grower Nicole Berg. “With all the uncertainty in agriculture today, we don’t need additional regulation, we need to focus on keeping farming operations productive.” 

Louisiana cotton producer National Cotton Council Chairman Ted Schneider says, “The cotton sector already has committed to reducing greenhouse gas emissions and our producers are escalating that and other key conservation practices under the umbrella of the industry’s U.S. Cotton Trust Protocol sustainability initiative. The SEC’s proposal would just complicate the efforts of cotton producers’ who already are dealing with a plethora of regulations, weather challenges and market volatility.”

Lucas was joined by more than 81 original co-sponsors. The Protect Farmers from the SEC Act is supported by the American Farm Bureau Federation, National Cattlemen’s Beef Association, National Association of Wheat Growers, National Cotton Council, National Pork Producers Council, USA Rice, American Sugar Alliance, American Soybean Association, National Potato Council, United States Cattlemen’s Association, National Council of Farmer Cooperatives, Agricultural Retailers Association, Oklahoma Farm Bureau, and the Oklahoma Cattlemen’s Association.

TAGS: Farm Policy
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