The theme of the 2013 Agricultural Outlook Forum was managing risk in the 21st Century. Secretary of Agriculture Tom Vilsack opened the annual forum this week, with a dim view of the near term future for U.S. agriculture as across-the-board spending cuts loom for all Federal agencies. Vilsack told attendees Congress could solve the problem but if it fails to act, USDA will do what it has to do to cut spending under what is commonly known as “the sequester”.
Secretary Tom Vilsack. US Department of Agriculture: "... what that will mean for USDA is every line-item, virtually every line-item, of our budget will have to be reduced by a certain percentage. And that percentage could be somewhere in the neighborhood of 5 to 6 percent. The only way we can absorb a cut of this magnitude is by impacting the people who work in the food safety area of USDA.”
If lawmakers are unable to come to some kind of agreement by Friday of next week, USDA could remove inspectors from meat packing plants. Without inspectors, processing lines would come to a standstill causing a ripple effect across the entire supply chain. USDA officials calculate this could mean losses of as much as $10 billion for the entire livestock industry.
Vilsack warns the cuts will be harsh for USDA. Without permission from Capitol Hill, he will be unable to cover the potential across the board cuts that face the Department.
Secretary Tom Vilsack. US Department of Agriculture: "Congress could give us flexibility and say we didn’t really mean every line-item across the board, or they could come up with a larger deficit reduction package that would avoid sequester."
Vilsack also renewed his call for Congress to pass the 2012 Farm Bill.
Secretary Tom Vilsack. US Department of Agriculture: “And that now creates uncertainty as to what the safety net will be for farmers who are faced with the drought, who were, through no fault of theirs, they are facing economic disaster and so they now face a financial risk that is man-made."
The Secretary also called on Congress to pass immigration reform.
Secretary Tom Vilsack. US Department of Agriculture: “This is a risk to agriculture and we are beginning to see the implications of that risk because we’ve had crops that were grown last year that could not be harvested because there simply weren’t enough hands to pick them. It’s important and necessary that we have immigration reform that creates a comprehensive set of reforms that secures our border and then creates an opportunity for these folks to be here legitimately.”
While Vilsack did say he was confident about the future of U.S. agriculture it remains to be seen if Congress will act in time to calm the Secretary’s concerns.