That step by the government will slow down the complete bitcoin network and making transactions would take really long. But as people have great minds they will surely come up with places to mine bitcoin where it would be harder to track them and block the electricity. This will also give more work to the small miners allowing them to make more out of their mining.

making and broadcasting transactions will always be fast... A valid transaction will usually be broadcasted to all nodes within seconds.
Confirmation times might be *slightly* slower in this doomsday scenario where more and more farms are being closed by the governement, however, every 2016 blocks there is a difficulty retarget, so every ~2 weeks the network should adjust itself so the average time between 2 blocks is once again ~10 minutes.

So basically, as long as the chinese governement (where, i believe, the majority of the farms are located) doesn't close more than 10% of the mining farms in a 2 week period, the effects would be more or less neglectible.
Offcourse, if they decided to attack all mining farms and completely close them in less than 2 weeks, the time between blocks might double or tripple untill 2016 blocks have been mined, at which point the situation will normalise.

Now, back on topic, i always believed that the power companies located weed farms by taking the difference between the sum of the electricity used by a certain block and the sum of electricity billed to the family's/companies using power in this block... As long as you don't steal your power, chances of getting caught running a mining (or weed) farm are not that high (at least, this is what i heared, i could be wrong).