Crop estimates, export promotion hit by sequester cuts

03/14/2013 06:34:00 PM
Tom Karst

Cutbacks in U.S. Department of Agriculture crop estimate reports and a 10% reduction in allocations to promote fresh produce exports are two real consequence of federal sequestration cuts that kicked in March 1.

The USDA’s National Agricultural Statistics Service said it was suspending several reports for the balance of the fiscal year because of budget cuts caused by sequestration. Among other reports cut for cattle, fish, rice, milk and other commodities, the agency announced it was suspending the monthly potato stocks report and all non-citrus fruit, nut and vegetable forecasts and estimates.

“The (potato stocks) report they eliminated was the most important report to us and it left standing reports that were less important to us,” said John Keeling, executive vice president of the National Potato Council, Washington, D.C.

Keeling said the potato industry hopes it will have a chance to give the USDA more input on how they could save money and still leave in place the potato stocks report. He said the USDA indicated industry can underwrite the cost of suspended reports if they feel the report is valuable.

“Potentially if it was a number we could live with and felt that the report was that valuable to us, we could go back in and actually pay for getting it done,” he said.

The USDA has given no cost estimates so far. Keeling said the potato council may ask about the cost of providing the potato stocks report — if for nothing else than to understand how much it costs the USDA to provide that information.

The list of suspended fruit estimates includes the July final estimate for the 2012 apple crop and the closely-watched first estimate of the 2013 apple crop, released in August. The USDA planned to eliminate that apple report last year, but relented when the industry said it would rather keep the August forecast than an October forecast.

It is possible that sequestration may be reversed by Congress and that the crop reports will be restored, said Nancy Foster, president of Vienna, Va.-based U.S. Apple Association.

“We’ve got some time on this August new crop estimate report, if they can resolve the sequestration problem,” she said. “I think that as the results of sequestration become more apparent — and I think they will — that will greatly increase the pressure for Congress to act.”

With key fruit and vegetable crop reports suspended, organizations depending on the Market Access Program to promote fresh produce exports also will have less money to work with for the balance of fiscal year 2013.

According to a USDA spokesman, speaking on condition of anonymity, the $200 million MAP budget cut is $10.2 million. and $1.76 million for the $30 million. The Foreign Market Development Program’s $30 million budget has $1.76 million less, he said.

B.J. Thurlby, president of the Wenatchee, Wash.-based Northwest Cherry Growers, said the USDA Foreign Agricultural Service told the group that the MAP allocations have been cut by 10% across the board for fiscal year 2013. Thurlby said the ultimate sequestration effect could be less than that, but accordign to the USDA, the MAP will be cut 10%.

Foster said 10% of the export program allocations were withheld earlier this year in anticipation of budget cuts.

She said the industry is hopeful that Congress will lift the sequester or at least bring some certainty to programs like crop insurance, commodity purchases, export promotion and crop estimates.

“Growers need to know what will be happening,” Foster.

A spokesman for the USDA said there were no reductions or changes in the number of market news reports for fruits and vegetables — which focus on f.o.b. and terminal market prices — as of mid-March.

Sequestration cuts were put in place during the 2011 debt ceiling negotiations as part of the Budget Control Act. The law called for close to $1 trillion in automatic cuts to begin in 2013 if Congress and the president couldn’t agree on a plan to reduce the deficit by $4 trillion. Delayed from January until March 1 this year, the Office of Management and Budget has said sequestration cuts require spending reductions of 9% for nondefense programs and 13% for defense programs for fiscal 2013.



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