Chances Still Slim for Shutdown Relief as USDA Stays Dark

Cornell ag economist warns shutdown has dismal effect on farm bill talks

Published on: Oct 4, 2013

Failed attempts to cool the political jostling that has become a mainstay of talks regarding the government "shutdown" will likely keep the farm bill in the lurch, a Cornell University ag economist speculates.

Andrew Novakovich, professor of Applied Economics and Management at Cornell University, said Thursday that efforts to move forward on the farm bill will be increasingly difficult to muster, given the hurdles that remain in the way – in other words, "toxins" that will further poison the political environment.

"The government shutdown in and of itself doesn't impact passage of the next Farm Bill, but the shutdown adds toxins to a political environment in which compromise feels almost impossible," Novakovich said in a press statement.

Cornell ag economist warns shutdown has dismal effect on farm bill talks
Cornell ag economist warns shutdown has dismal effect on farm bill talks

Novakovich pointed out that compromise on the shutdown, along with forthcoming talks on the debt ceiling, will become more difficult with each passing day that the government is not in operation. And, unfortunately, the farm bill hinges on Congressional compromise.

While he says that Congress' failure to pass appropriations for Fiscal Year 2014 will "have relatively little or no effect on the big ticket items of government," he notes that federal reports commonly taken for granted will be missed, and "CME futures markets that cash settle against a federal estimated price won't have a cash price announced."

What's more, he says, farmers that had planned to finish paperwork in their local FSA office will find the door locked.

That's an issue that many farm groups are increasingly concerned about, especially given that talks between President Obama and House Speaker John Boehner have been reportedly "unproductive."

The two met Wednesday night with intent to discuss a compromise to break the federal shutdown that has been in place since midnight Sept. 30. Most of the impasse centers on the House's intention of defunding the Affordable Care Act in funding legislation. The Senate refuses to pass a bill including such a provision.

Meanwhile, the House has passed a measure to fund parts of the government – such as national parks and museums and some vital research. That provides little consolation, however, for farmers who work closely with USDA offices on loan and grant programs.

If the shutdown continues, Novakovich suggested in a University of Wisconsin podcast hosted by Director of Dairy Policy Analysis Mark Stephenson, that farmers could be missing out by not getting questions answered with programs like crop insurance, but that may be a bigger issue if the shutdown continues.

"Of course this isn't a season where there is a lot of activity on crop insurance just yet," Novakovich said. "At some point if this lingers and certainly if it were a different time of the year, that would be problematic."

Novakovich also notes that while some agriculture department programs continue even in the absence of a spending bill, the absence of a farm bill could create a noticeable problem for dairy farmers specifically – no Women, Infants and Children feeding program funding.

"Food stamps continue because they are mandatory … but the WIC program is going to run out of money. And the WIC program is very beneficial to dairy sales," Novakovich said. "For folks who are on WIC and folks that are selling products to WIC recipients – grocery stores and so on – it will be a noticeable effect."

View the full podcast here.