Looming government shutdown and farm bill failure creating agricultural uncertainty

Only days remain before the start of the new fiscal year on Oct. 1, leaving Congress little time to pass a farm bill and Continuing Resolution to continue funding federal government activities in order to avoid a government shutdown. This is creating a healthy crop of uncertainty for agriculture.

Initially, this could create some problems for farmers hoping to get something done at their local Farm Service Agency, USDA Rural Development or Natural Resources Conservation Service offices.

“If Congress is unable to come to an agreement on the so-called Continuing Resolution, the government effectively shuts down,” said Dale Moore, American Farm Bureau Federation director of public policy. “You may recall that back in the mid-90s the Congress and president Clinton had a showdown over this process. The government shut down for a few days a couple of times and when that happens those offices have to shut down. If the government shuts down it will include those local offices.”

The shut down, paired with what appears to be a failure to get a farm bill done before the extension expires, leaves quite a bit of uncertainty for agriculture moving forward.

“It is hard to make a case that most folks are going to see something occur Oct. 1 with the farm bill expiring, but it is certainly going to make it difficult for a farmer to go and sit down with his banker and say, ‘Here is a pretty clear picture of what next year looks like,’” Moore said.

Both the House and Senate have passed versions of the farm bill. The House passed a fiscal year 2014 Continuing Resolution (H.J.Res. 59) that would fund the federal government through Dec. 15 at current year levels (keeping sequestration in place) and also eliminates funding for the Affordable Care Act among other provisions. Meanwhile, the Senate is considering the legislation and will attempt to strike the language defunding the Affordable Care Act as well as possibly making other changes, including providing funding only through Nov. 15.

Involved in all of this debate is legislation that provides funding for export promotion programs, used by agricultural organizations like the U.S. Grains Council (USGC), which are subject to enactment of a new farm bill or an extension of current law.

“If the House and Senate cannot reach an agreement by Sept. 30, the federal government would shut down leaving only essential services in place,” said Floyd Gaibler, USGC director of trade policy and biotechnology. “Depending on the length of the shutdown, it could have impacts on USDA’s Foreign Agricultural Services program funding, which the Council relies on to develop global markets for U.S. agricultural products.”

For the USGC, for example, the immediate impact of a shutdown would be a delay in obtaining approval for 2013/2014 Foreign Market Development funding for USGC international offices and staff. This program year ends Sept. 30 and in the absence of authorization, USGC will not have access to funds for the organization’s nine international offices and international staff.

The next impact would be on USGC programs. Any previously approved programs could still be implemented, however, USGC would receive no reimbursement for these activities if a shutdown occurred.

Finally, a government shutdown in the absence of a farm bill would further delay authorization for new funds for export programs in fiscal year 2014.

 

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