How Does the Sequester Impact US Agriculture?

Greetings from a snowy Midwest! Unlike my colleagues in the UK who have had too much moisture, I believe we Midwesterners are happy to see any and all moisture as we begin to near the spring planting season.

Last week was a busy one - I flew down to Orlando, Florida for the Bayer CropScience Ag Issues Forum which was followed immediately by the 2013 Commodity Classic, which is the annual meeting for the US corn, soybean, wheat and sorghum associations.

For the fourth year running, US Department of Agriculture Secretary Tom Vilsack spoke to farmers and agribusiness attendees. Of course, like last year he emphasized the need for a US Farm Bill. But more importantly, he gave the audience a taste of what the government sequester will mean to US agriculture.

The sequester will reduce USDA’s operating budget by about $1 to $1.5 billion, and as it’s structured, it will impact every line item of the budget. So every account that's not exempted by Congress has to be cut by an estimated 5 to 8 per cent. Since there’s only six months left of the fiscal year, it's like cutting 10 to 16 per cent in terms of the remaining budget.

For the Farm Service Agency, there will be $34 to $35 million fewer credit dollars available for producers, so about 1,500 farmers who need credit to operate or own a farm will not have access to it.

USDA will let their land-grant university partners know that there's probably going to be about $60 million fewer for research and probably 100 projects that were approved but won’t be able to be funded.

“It will probably mean about half of a billion fewer trade opportunities, and Lord knows what it will do with our competitors and their ability to go into foreign markets and suggest that, perhaps, the American market is not as certain as it once was, and that may have long-term impacts,” Secretary Vilsack said.

Those overseeing the Women, Infants and Children (WIC) program will tell 600,000 women that they won't be able to access the WIC program’s nutritional assistance because they're going to be put on a waiting list.

Vilsack said there’s no flexibility in the sequester language to avoid furloughs of food inspectors.

“When I do, It's not just an inspector who’s impacted, the roughly 8,000 inspectors in over 6,600 inspection facilities, it's the 250,000 other folks working in those facilities whose lives are also going to be impacted,” he said. “It's going to be a loss of export opportunity because product will not be produced on those days when inspectors are furloughed because no meat can be processed on those days. It's estimated that we're looking at potentially $8 billion less in exports.”

Personally, I can only equate this whole Congressional impasse to children behaving badly. OK, not just badly - how about atrociously. It's time for these elected officials to get on with it - Find a compromise; Pass a budget; Pass a US Farm Bill; and Stop taking time away from the critical issues that are really important to agriculture.

To read more about Secretary Vilsack's Commodity Classic address, click here.

Have a great week!