A good article in the new issue of American Prospect provides an excellent example of how the rigidity of regulation can prevent innovation and variety in production, and can lead to homogeneity and favor large and incumbent corporations. The regulations at hand are the USDA’s slaughterhouse requirements, which really hits home for progressives because it hurts small, local, and organic farmers:
USDA meat-processing guidelines are tailored to high-volume packing plants, such as those owned by giants ConAgra and Tyson. As a result, ever more mom-and-pop slaughterhouses are being forced out — and, unable to shoulder the capital costs, new ones can’t open.
According to Eric Shelley, who runs a slaughterhouse that doubles as a schoolroom at the State University of New York, Cobleskill, “All the costs of running a slaughterhouse are basically the same whether you’re a small plant or a large plant. But if you’re a large plant, those costs get diffused, spread out.” Small operators have to buy the same gear that the big places do, such as stainless-steel equipment and high-end stun guns, saws, and knives. While it makes sense that anyone handling food should have the most professional tools, these industrial accoutrements can easily exceed what a small facility will ever need. They also typically drive the cost of opening a USDA-approved local slaughterhouse to well over a million dollars, creating serious barriers for potential newcomers.
This kind of problem with regulation is not exclusive to the local food movement. For example, the Consumer Product Safety Improvement Act, which was passed in 2008 in the wake of incidents of lead being found in Chinese toys, requires lead testing for toys. The law is burdensome for small toy makers and is threatening to put many out of business, especially handmade toys which must comply with the testing even if though are often made of nothing more than wood and beeswax:
“This is absurd,” said Mr. Woods, whose toys are made of maple, walnut and cherry and finished with walnut oil and beeswax from a local apiary. He estimates it would cost him $30,000 — a figure he calculated from having to pay $400 in required tests for each of the 80 or so different items he produces — to show that they are not toxic.
In contrast, large manufacturers like Mattel have the required scale to conduct the tests in their own internal labs, which is much cheaper per toy than the 3rd party testing that small manufacturers have to utilize.
It’s really encouraging to see this kind of problem recognized in TAP. It would be even more encouraging if they were bothered when regulation had these negative effects in any industry, not just those that make products that are important to progressives.