Fed Shutdown Stings Farmers, Adds Toxins To Farm Bill Talks

Cornell ag economist contends the federal government shutdown will make congressional farm bill negotiations even tougher.

Published on: Oct 8, 2013

The federal government shutdown doesn't impact passage of the next Farm Bill. But it "adds toxins to a political environment in which compromise feels almost impossible," says Andrew Novakovich.

He's in a unique position to know a U.S. Capitol Beltway outsider and a federal government insider. Since 2011, the Cornell ag economist also acted as senior economist to USDA's Office of the Chief Economist.

Last Wednesday, notes Novakovich, the U.S. Senate re-announced its Farm Bill conferees even as House Agriculture Committee Ranking Minority Member Collin Peterson and Ag Secretary Thomas Vilsack despaired about being unable to find a compromise.  

PARTISAN RANCOR: The longer the fed shutdown, the tougher itll be to come up with a Farm Bill, says Andrew Novakovich.
PARTISAN RANCOR: The longer the fed shutdown, the tougher it'll be to come up with a Farm Bill, says Andrew Novakovich.

"With each advancing day, compromise becomes both more necessary and more difficult," he adds. "And, as the deadline for expanding the debt ceiling gets closer, the stakes are raised.

Novakovich's assignments include analyzing proposals connection with farm legislation and issues related to dairy programs. CME futures markets that cash settle against a federal estimated price won't have a cash price announced, he says. Farmers that had planned to finish that paperwork in their local Farm Service Agency office will find the door locked.

"It may be easy to stand by while government workers calculate how long they can go without a paycheck." But he points out: "The prospect of the government of the world's largest economy and most powerful country reneging on its loan payments is punishing to advocates of fiscal responsibility."

The biggest share of government spending is mandated under ongoing law. So Congress' failure to pass appropriations for Fiscal Year 2014 will have relatively little or no effect on the big ticket items of government. Most of the big-government programs believed to out of control will continue unabated because their funding is mandated – non-discretionary.