Two weeks into the partial government shutdown and it seems there is still no clear road ahead as to when the affected seven departments and various agencies may reopen, including the U.S. Department of Agriculture (USDA), the Environmental Protection Agency (EPA), and the Food and Drug Administration (FDA). This is due to an ongoing funding dispute between President Donald Trump and House Democrats over a border wall along the United States' southern boundary with Mexico as a condition to his signing appropriations bills. Democrats oppose inclusion of funding for this purpose.
Trump met with both Democratic and Republican Congressional Leadership at the White House on Wednesday to try and resolve differences of opinion to no avail. Yesterday, as the 116th Congress was seated and Democrats took control of the House for the first time since 2010, Speaker Nancy Pelosi (D-CA) pushed a vote on a funding bill that would restart funding for all affected departments and agencies, with the exception of the Department of Homeland Security (DHS), through September 30, 2019. A separate bill was passed to fund DHS through February 8 as Congress debates the best path toward border security.
The Senate is not likely to take up either of the bills for a vote given the Administration's stated unwillingness to sign either into law. The President and Congressional Leadership met today to discuss possible ways to end the impasse. Unfortunately, no agreement was reached.
As uncertainty looms, the closure of departments the rice industry relies on for information such as trade data, promotional funding, and the ability to sign up for safety net and other critical programs is concerning. Up until this week, many of those entities were able to continue some operations utilizing carryover funds, but those have been extinguished swiftly now leading to a true shutdown.
Implicated in the shutdown are USDA mission areas directly impacting farmers, including a complete shutdown of the Farm Service Agency (FSA). According to Undersecretary Bill Northey, farmers will be unable to pay off marketing assistance loans taken out at harvest, meaning farmers will be unable to receive clearance to move the crop they intended to sell in January until that loan is repaid. Also, farmers who have FSA direct farm operating loans with payments due in the near future will be unable to make payments until FSA reopens; however, FSA says they will take into account the shutdown as a real disruption and farmers should not be at a disadvantage.
Despite reports that Market Facilitation Program (MFP) payments and other payments may still be disbursed from FSA, USA Rice understands that no FSA-derived payments, including MFP payments, are being disbursed. Northey has indicated that Ag Secretary Sonny Perdue will consider whether extending the January 15 deadline for sign up makes sense. We interpret this to mean that the deadline for sign up will be extended if the shutdown goes beyond the deadline. It is also important to note that during the shutdown, no funding awards through the Agricultural Trade Promotion program, one of the three legs of USDA's trade mitigation plan, will be made.
Other known USDA functions that have been disrupted are many, including the suspended publication of the monthly World Agricultural Outlook Board's supply and demand estimates report (WASDE), anticipated on January 11. During the last shutdown in 2013, scheduled USDA reports, including the WASDE, were canceled. Further, USDA has restricted access to any Foreign Agricultural Services' Global Agricultural Trade System (GATS) data and suspended updates to almost all USDA websites and data sources.
"USA Rice activities through the Market Access Program (MAP) and Foreign Market Development (FMD) program are severely curtailed due to no allocation of funds for this fiscal year," said USA Rice Vice President International Sarah Moran. "Additionally, awards for the new Agricultural Trade Promotion (ATP) program were expected in early January but that too will be delayed while the government is shutdown. There are limited tenders for food aid and nutrition assistance programs."
"As we approach another projected year of poor economic forecasts and a decline in net farm income, we urge Congress and President Trump to resolve these differences and fund the government so USDA will begin functioning again and the new farm bill can be implemented," said USA Rice President & CEO Betsy Ward. "This shutdown has very real implications for an industry already in distress."