With the growing season just months away, some farmers say the government shutdown is threatening their ability to buy seeds, land and fertilizer in time to plant major crops like corn and wheat this year.
Agriculture Secretary Sonny Perdue announced Wednesday a temporary stopgap by opening for three days many of the department’s field offices, but that step will only be to help farmers with urgent business like tax filings and with servicing loans already on the books. The USDA employees, part of the department’s Farm Service Agency, won’t be approving the billions in annual new loans that many farmers rely on for cash flow through the growing season.
The shutdown is adding to the economic downturn, trade conflicts and other problems that farmers face. Shuttered FSA field offices means farmers can’t discuss their financing options for purchasing new land, or receive market reports that help them make planting decisions. Producers hit by retaliatory tariffs who had yet to apply for the Trump administration’s $12 billion trade aid will have to wait for a resolution to the impasse in Washington.
Take Andrew Barsness, an organic grain farmer in central Minnesota, who is worried about how long he will have to wait for access to his money. Under the terms of an operating loan provided by USDA last year, Barsness has a lien on his crop, meaning that all his profits can’t be accessed until FSA reopens and processes his paperwork.
“Looking ahead to 2019, I should be in my FSA office talking to my loan officer and applying for a new operating loan and figuring out if I am going to have a financial means to farm in 2019,” Barsness said. “So my hands are kind of tied both going forward and finishing up last year’s season. I can’t really even go to talk with anyone to get guidance on the situation because offices are closed.”
The lending functions of the USDA are a crucial component of the farm economy. The department doled out more than $5.4 billion in loans last fiscal year through nearly 35,000 payments as of Sept. 30.
Matthew Fitzgerald, another central Minnesota farmer, also depends on the federal government to plan ahead and borrow money for the coming year. The stalemate in Washington — some 1,100 miles away from his farm — is having direct consequences for his business.
He is a relatively new farmer looking to expand his organic grain operation – precisely the type of grower policymakers in Washington talk about trying to recruit and support. But the government shutdown, now in its 27th day and spurred by President Donald Trump and Congress’ disagreement over funding for a wall along the U.S.-Mexico border, is having the opposite effect.
Because of a yearslong downturn in the agricultural economy, Fitzgerald said several farms have come up for sale. He is in a position to buy, but not without help from USDA.
“I sort of have to sit oddly on the sidelines while there are these farm opportunities out there,” he added. “That’s one of the frustrations. There’s actually a very small window [when] we can do our business.”
The Agriculture Department has special programs to help young farmers like Fitzgerald, who is 28. The department targets a portion of its money to support the next generation. The average age of farmers hovers around 58, and is trending older, according to the most recent USDA Census of Agriculture. The farm bill enacted in December boosts grant programs for beginning and socially disadvantaged producers, but these initiatives are on hold amid the standoff that has frozen the USDA’s budget.
“I can’t make an offer until I have a sense of finances,” Fitzgerald said in a recent interview with POLITICO, noting that he needs to meet with a USDA loan officer before he can move forward with a purchase.
The shutdown couldn’t come at a worse time for farmers, many of whom are trying to plan ahead for the 2019 crop after struggling with five years of low prices and weak farm income, said Val Dolcini, a former FSA administrator who now is president and CEO of the Pollinator Partnership. Many commodity growers have also been stung by retaliatory tariffs on farm exports to major trading partners, including Canada, Mexico, the European Union and China, and it is unclear whether U.S. trade talks will result in the tariffs being lifted.
The new U.S.-Mexico-Canada Agreement didn’t remove retaliatory tariffs on agricultural goods because the Trump administration continues to slaplarge duties on steel and aluminum imports from Mexico, Canada and other regions.
A few more weeks of the shutdown would eat into a crucial planning period for agriculture industry, said Michael Scuse, Delaware secretary of agriculture and former acting USDA deputy secretary.
“When you get into February I think [farmers‘] patience will run out,” Scuse said.
“Farmers in the southern part of the U.S., they’re seriously looking at production in February. They need to be making some real hard decisions,” he added.
A longer shutdown would have tough ripple effects throughout the rural economy beyond the farm sector, said Tom Vilsack, who was Agriculture secretary during the Obama administration and is now president and CEO of the U.S. Dairy Export Council.
USDA backs numerous programs to help rural areas — including a community facilities loan and grant program, which pays for constructing health care centers like nursing homes and dental clinics for areas with fewer than 20,000 residents, Vilsack noted.
Separately, the Forest Service, which is part of the USDA, also can’t carry out some wildfire prevention and forest management efforts, which could hurt wide swaths of the U.S. later this year.
A USDA spokesperson told POLITICO that the Forest Service is operating with limited money from the previous year‘s mandatory funding.
“The Forest Service is prioritizing — consistent with the shutdown plans and available funds — public health and safety, highly prioritized work in active forest management, such as timbers sales and fuels reduction, ski area administration and avalanche control, as well as road repair,” the spokesperson said.
When the government reopens, there will also be a backlog of work waiting federal employees, causing further delays for vital services, Vilsack said.
For instance, dairy farmers are counting on new aid that is part of the new farm bill after a global milk glut and low prices forced hundreds of operations out of business in recent years. The sector’s problems have been exacerbated by retaliatory tariffs by top trading partners like Mexico and Canada.
The farm bill directed USDA to make dairy insurance coverage less expensive and make more frequent payments. But the department can’t make these changes to the program, rebranded as Dairy Risk Coverage, until the government reopens. Perdue has pledged to make implementation of the dairy program a top priority once the shutdown ends.
“When you look at the dairy industry nationwide, it has been suffering now for a couple years and there are producers that are rely heavily on these payments just to stay in business,” Scuse said.
Article originally published on POLITICO Magazine
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Source: https://www.politico.com/story/2019/01/17/government-shutdown-agriculture-farmers-usda-fsa-1106977
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The Article Was Written/Published By: lcrampton@politico.com (Liz Crampton)
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