United States 

Department of 

Agriculture

Animal and 

Plant Health 

Inspection 

Service

April 2011

Analysis in Support of Certification that the 

Rule will not have a Significant Economic 

Impact on a Substantial Number of Small 

Entities

Proposed Rule 

2011-0030

RIN 0579-AD43

Require Horse Industry Organizations to 

Assess and Enforce Minimum Penalties for 

Violations

Policy & Program Development

Policy Analysis & Development
0

Summary

The Horse Protection Act is a Federal law that prohibits horses subjected to a practice 

called soring (intentional injuring of a horse’s limbs to produce a high-stepping gait) from 

participating in shows, sales, exhibitions, or auctions. Walking horses are prized for this

distinctive high-stepping gait. Horse Industry Organizations (HIOs), groups formally engaged in 

the promotion of shows and similar activities, are responsible for licensing Designated Qualified 

Persons (DQPs), who are authorized to enforce the prohibition on participation of horses 

subjected to soring. Participants found to be in violation of the Horse Protection Act are 

assessed penalties by the DQPs, as set by the HIOs.

Efforts to eliminate soring have been hindered by the non-uniform assessment of 

penalties for Horse Protection Act violations. This proposed rule would provide USDA with 

clear authority to require a uniform minimum penalty protocol. The rule would also give USDA 

the authority to decertify HIOs that refuse to implement the minimum penalty protocol.

Since the HIOs already administer their own individual penalty protocol for violations of 

the Horse Protection Act, the proposed rule is not expected to impose additional costs upon HIOs

or show participants (other than those individuals who incur more severe penalties because of the 

rule). The proposed rule will not have a significant economic impact on a substantial number of 

small entities. 

The proposed uniform penalty protocol may benefit the walking horse industry by:

 Helping to ensure more humane treatment of the horses;

 Reducing uncertainty about penalties for infractions of the Horse Protection Act;

 Enhancing the reputation and integrity of the walking horse industry;

 Providing for more fair competition at shows, which may positively impact

attendance and regional economies; and 

 Improving the value of the walking horse breeds.
1

Introduction 

The Horse Protection Act is a Federal law that prohibits horses subjected to a practice 

called soring (intentional injuring of a horse’s limbs to produce a high-stepping gait) from 

participating in shows, sales, exhibitions, or auctions. Horse Industry Organizations (HIOs), that 

is, groups formally engaged in the promotion of shows and similar activities, are responsible for 

licensing Designated Qualified Persons (DQPs), who are authorized to enforce the prohibition on 

participation of horses subjected to soring. Participants found to be in violation of the Horse 

Protection Act are assessed penalties by the DQPs, as set by the HIOs.

In September 2010, USDA’s Office of Inspector General (OIG) released an audit report 

stating that efforts to eliminate the inhumane and cruel practice of soring had been ineffective 

and recommended that all HIOs should assess uniform penalties for violations.1 This proposed 

rule addresses the OIG recommendation by providing USDA with clear authority to require a 

uniform minimum penalty protocol. HIOs could still require penalties that are more severe than 

those in the penalty protocol. In addition, the rule would give USDA the authority to decertify

HIOs that refuse to implement the minimum penalty protocol. 

This analysis provides the basis, as required by the Regulatory Flexibility Act, for 

certification by the APHIS Administrator that the proposed rule, if promulgated, will not have a 

significant economic impact on a substantial number of small entities. We first present 

background information on the U.S. horse industry, generally, and in increasing detail, on the 

 

1 Office of the Inspector General. Animal and Plant Health Inspection Service Administration of the Horse 

Protection Program and the Slaughter Horse Transport Program. Office of Inspector General, USDA, Washington, 

D.C., Audit Report 33601-2-KC, September 2010.
2

show and competition horse industry and the walking horse industry. We then address expected 

effects of the proposed rule for small entities. 

The U.S. Horse Industry

There are approximately 9.2 million horses in the United States, of which about 4 

million are located on farms and ranches, according to surveys conducted by Deloitte 

Consulting LLP in 2005 for the American Horse Council, and the National Agricultural 

Statistics Service, respectively.2 There are horses in every State, with 45 States each having at 

least 20,000 horses. About 2 million Americans own horses and another 2.6 million are 

involved in the horse industry as service providers, employees, and volunteers. One out of 

every 63 Americans is involved with horses and the horse industry. 

The American Horse Council survey and a 2010 study by the University of Kentucky for 

the American Horse Publication found that while about 42 percent of the respondents indicated 

that their association with the horse industry was through recreational and leisure riding, almost 

one-third of the respondents were involved in show and competitive riding.3 The studies found 

that approximately 46 percent of horse owners had incomes between $25,000 and $75,000.

Although the majority of horses (57 percent) are concentrated in communities with less than 

20,000 people, 26 percent of horses were located in areas with populations over 50,000. 

Seventy-two percent of the horse owners are between the ages of 35 and 64, with 56 percent over 

45 years of age. 

 

2 Deloitte Consulting, LLP. National Economic Impact of the U.S. Horse Industry. American Horse Council 

Foundation, 1616 H Street NW, Washington, D.C., 2005. http://www.horsecouncil.org/nationaleconomics.php

USDA-NASS, Census of Agriculture, 2007. Washington, D.C.: National Agricultural Statistics Service.

http://www.agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_Chapter_2_US_State_Level/st99_2_015_

015.pdf

3 C. Jill Stowe. 2009-2010 AHP Equine Industry Survey American Horse Publication, Department of Agricultural 

Economics, University of Kentucky, 2010. http://www.americanhorsepubs.org/resources/AHP-Equine-SurveyFinal.pdf
3

According to the 2002 Census of Agriculture, the number of farms operated primarily by 

women more than doubled since 1978.

4 By 2002, women were the primary operators of almost a 

third of all U.S. horse farms. Women farmers, singly or jointly, operated over 65 percent of all 

horse farms, compared with 37 percent of all farms. Of all the farms operated primarily by 

women in 2002, 20 percent were horse farms.5

The U.S. horse industry supports a wide variety of equine-related activities in all regions 

of the country, including racing, showing, competition, sport, breeding, recreation and work 

(table 1). The horse industry combines the primarily rural activities of breeding, training, 

maintaining and riding horses with the more urban activities of operating racetracks, off-track 

betting parlors, horse shows and public sales. Direct economic effects of horse-related activities

derive from the purchase of goods and services from a variety of businesses and individuals. 

Indirect economic effects occur when these businesses and individuals, in turn, buy various 

goods and services from other businesses and individuals. 

Table 1 – Number and Percentage of Horses in the U.S. by Activity, 2005

Activity Number Percent

Racing 844,531 9

Showing 2,718,954 30

Recreation 3,906,923 42

Other 1,752,439 19

Total 9,222,847

Source: American Horse Council Foundation, 2005.

Note: “Other” activities include farm and ranch work, rodeo, carriage horses, polo, police 

work, informal competitions, etc.

 

4 USDA-NASS, Census of Agriculture, 2002. Washington, D.C.: National Agricultural Statistics Service.

http://www.agcensus.usda.gov/Publications/2002/Volume_1,_Chapter_1_US/st99_1_048_048.pdf

5

Susan Offutt and Penni Korb. More Women Turning to Horse Farming. Amber Waves. Economic Research 

Service, USDA, Vol. 4 Issue 4 p. 34, September 2006. 

http://www.ers.usda.gov/AmberWaves/September06/PDF/DataFeatureSeptember06.pdf
4

According the Deloitte Consulting study, the horse industry contributes more than $38 

billion directly to the gross domestic product (GDP) and another $73 billion indirectly (table 2).

In addition, it was estimated that the horse industry directly generated around 460,000 full-time 

equivalent (FTE) jobs and another 700,000 indirect FTE jobs. Independent studies by 

universities in the major horse industry States also show similar results concerning the 

industry’s contribution to the States’ economies and employment. 

Table 2 – Horse Industry’s Direct and Indirect Contributions to the Gross 

Domestic Product by Activity, 2005

Activity Direct Indirect

--- Billion Dollars ---

Racing 10.6 26.1

Showing 10.8 28.7

Recreation 11.8 32.9

Other 5.5 14.6

Total 38.8 101.6

Source: American Horse Council Foundation, 2005.

Note: “Other” activities include farm and ranch work, rodeo, carriage horses, polo, police 

work, informal competitions, etc.

Show and Competition Horse Industry

The show and competition horse industry represents about 30 percent of the horse 

industry and provides economic benefits to the local communities that host the shows. A recent 

study by the University of Kentucky found that over 81 percent of the responding shows 

involved more than 50 competitors, and almost half involved more than 100 competitors.

6

Respondents competed on average five times in 2009, although respondents in Arkansas, 

 

6 C. Jill Stowe and Kenny Burdine. Understanding the Impact of Horse Shows and Competitions in Kentucky. 

Department of Agricultural Economics, University of Kentucky, Lexington, Kentucky, Extension No. 2009-29. 

September 2009. http://www.ca.uky.edu/cmspubsclass/files/cjstowe/Horse%20Shows%20AEC%202009-29.pdf
5

Louisiana, Oklahoma, and Texas competed more frequently, on average. Income and age were 

positively correlated to the number of times the respondents competed each year.

The University of Kentucky study found that all shows charged entry fees, which 

consisted of gate fees, per class or horse fees, or a combination. Most shows distributed some

sort of prize money from sponsors, entry fees, or some other source. The survey also found that 

the total amount of prize money distributed averaged $10,399, with a median of $3,987 (for the 

time period 2005 to 2008), not including the value of ribbons, trophies, buckles, or saddles that

are often given as prizes.7 The shows spent money for announcers, show managers, staff, 

farriers, emergency personnel (medical and fire), security, and musicians. Also, shows often 

purchased or rented services from local vendors such as for food, advertising, hotel services, and 

show equipment.

The Walking Horse Industry

In 2004, the Tennessee Agricultural Statistics Service estimated there were 62,000 

Tennessee walking horses in the State of Tennessee and the primary use for the breed was for 

pleasure/sport (40 percent), followed by competition (25 percent), breeding (24 percent), and 

other (11 percent).

7

 Although it is difficult to determine the number of Walking Horse 

competitors in the United States or enterprises that support them, horse shows provide an 

economic benefit for the communities where these events are held.

The Tennessee Walking Horse National Celebration is a premier event, where some 20 

World Champions are named and more than $650,000 in prizes are awarded.8 The event has a 

 

7

 Debra Kenerson and Joel Moore. A Tennessee Tradition, Equine 2004, Tennessee Agricultural Statistics Service,

Nashville, Tennessee, p. 13, 2004. 

http://www.nass.usda.gov/Statistics_by_State/Tennessee/Special_Surveys/2004equine.pdf

8 Bob Womack. Walking Horse National Celebration. The Tennessee Encyclopedia of History and Culture, Version 
6

large economic impact on the entire middle Tennessee region. Winning the Celebration 

enhances the value of the horse and the reputations of the trainers and owners. In 1996, there are 

more than 2,170 entries at the Tennessee Walking Horse National Celebration from throughout 

the United States and an attendance of more than 150,000.

Although the Tennessee walking horse is probably the best known, there are other 

walking horse breeds as well. All walking horse breeds are known for their unique smooth gaits, 

but Tennessee walking horses also are prized for their distinctive high-stepping gait, known as 

the “big lick.” The exaggerated gait can be achieved with proper training and considerable time 

and effort, but some horse exhibitors, owners, and trainers attempt to shorten the training time by 

using soring. “Soring” is the practice of intentionally injuring a horse’s front legs to cause pain 

so intense that the horse instantly jerks its legs up to relieve the pain when the horse’s hooves 

come into contact with the ground, thereby producing the “big lick.” Similar results also are 

achieved by using certain types of mechanical devices. Since an exaggerated "big lick" gait is 

highly rewarded by the judges at walking horse show events, there is an incentive to use soring

to gain a competitive advantage. 

Although some in the walking horse industry disagree that soring of horses is a problem, 

all but three horses in the World Grand Championship class at the 2006 Tennessee Walking 

Horse National Celebration were disqualified due to Horse Protection Act violations. Show 

management cancelled the final class, failing to name a 2006 World Grand Champion for the 

first time in 68 years. As a result of the issue of soring and inspections, there are growing 

concerns about negative perceptions of the walking horse industry by organizations and 

 

2. The Tennessee Historical Society, Nashville, Tennessee Middle Tennessee State University February 28, 2011. 

http://tennesseeencyclopedia.net/entry.php?rec=1455
7

individuals outside of the walking horse community and the affect that this negative perception 

will have on the future success of walking horse events.9,10

Effects for Small Entities

The Regulatory Flexibility Act requires agencies to consider whether a rule will “have a 

significant economic impact on a substantial number of small entities.”11 The Small Business 

Administration’s (SBA) small-entity standard for the 12 Horse Industry Organizations (as 

business associations that promote horses through the showing, exhibiting, sale, auction, registry, 

or any activity which contributes to the advancement of the horse) is not more than $7 million in 

annual receipts (North American Industry Classification System (NAICS) 813910). We do not 

have an estimate of average annual receipts for the 12 HIOs that may be affected by the proposed 

rule, and welcome information that may be submitted by HIOs and the public.

The SBA small-entity standard for entities involved in Horses and Other Equine 

Production is $750,000 or less in annual receipts (NAICS 112920), while the small-entity 

standard is $ 7 million or less in annual receipts for businesses classified within Support 

Activities for Animal Production (NAICS 115210).

12

 According to the 2007 Census of 

Agriculture, the average market value of livestock sales by farms classified within Horse and 

Other Equine Production was about $12,300.

13

 Also according to the Agricultural Census, 93 

 

9 Brian Mosely. “What a Horse” seeks city funding. Shelbyville Times-Gazette, Shelbyville, Tennessee Wednesday 

July 8, 2009. http://www.t-g.com/story/1553026.html

10 Kentucky Horse Council. Walking Horse Breeder's Kentucky Incentive Fund Tied To HPA Compliance. The 

Horse.com, Kentucky Horse Council, 1500 Bull Lea Rd. Suite, Lexington, Kentucky, September 16, 2009. 

http://www.thehorse.com/ViewArticle.aspx?ID=14877

11 SBA-Office of Advocacy, A Guide for Government Agencies: How to Comply with the Regulatory Flexibility Act. 

Washington DC, U.S. Small Business Administration, p. 8, September 2009.

12 Table of Size Standards based on NAICS 2002 [Horses and Other Equine Production: NAICS code 112920] and 

[Support Activities for Animal Production: NAICS Code 115210] Washington, D.C.: U.S. Small Business 

Administration, effective October 1, 2007.

13 2007 Census of Agriculture, Table 46: Special Characteristics of Farms by North American Industry 

Classification System: 2007, 
8

percent of farms with horse inventories had sales of less than $250,000 and of these, 65 percent 

of the farms had sales less than $10,000, well below the SBA threshold for small entities.14 We 

do not have an estimate of the average income for enterprises classified within the industry, 

Support Activities for Animal Production. 

Riding stables and other equestrian recreational facilities are not included as horse farms;

the Census of Agriculture defines a horse farm as an operation that sells at least $1,000 of 

agricultural products in a year and generates 50 percent or more of its sales from horses. While 

most of the horses in the United States are privately owned and not located on farms and ranches, 

horses that compete are subject to the Horse Protection Act.

The proposed rule would provide USDA with clear authority to require a uniform 

minimum penalty protocol. HIOs could still require penalties that are more severe than those in 

the penalty protocol. The rule would also give USDA the authority to decertify HIOs that refuse 

to implement the minimum penalty protocol. 

The proposed rule would not impose costs on the HIOs or show participants (owners, 

trainers, riders, or transporters), other than those individuals who incur more severe penalties 

because of the rule. Any costs of administering the current regulations already are directly or 

indirectly passed along to all participants that compete in the walking horse shows. 

A uniform penalty protocol would benefit the walking horse industry through improved 

welfare of the horses by helping to ensure their more humane treatment. Soring intentionally 

injures the horses to produce the “big lick” gait. A uniform minimum penalty removes

uncertainty for show participants and the administrative burden for HIOs of setting penalty 

 

http://www.agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_Chapter_1_US/st99_1_046_046.pdf

14USDA-NASS, 2007 Census of Agriculture: Small Farms. Washington, D.C.: National Agricultural Statistics 

Service. http://www.agcensus.usda.gov/Publications/2007/Online_Highlights/Fact_Sheets/small_farm.pdf
9

amounts. Reduction in soring due to the foreknowledge of uniform penalties would help create a 

more level playing field for show participants and enhance competition. 

A uniform minimum penalty should enhance the reputation of the walking horse industry 

and help to restore the integrity of the walking horse shows and breeds. Competitive shows 

encourage more competitors and draw enthusiastic fans. Successful walking horse shows can 

have a positive impact on a region’s economy. Horses with the natural ability to produce the 

distinctive high-stepping gait would be more highly prized for breeding, thereby improving the 

overall value of the breed.

The proposed rule is not expected to have a significant economic impact on the HIOs, 

show managers, horse owners, trainers, or any other industry entities. Under these 

circumstances, the Administrator of the Animal and Plant Health Inspection Service has 

determined that this action will not have a significant economic impact on a substantial number 

of small entities.