Western Farm Press Logo

Government shutdown and market facilitation payments

Analysts are suggesting the likelihood of shutdown is probably less this go around than in previous years.

Logan Hawkes 1, Contributing Writer

December 19, 2018

4 Min Read
The United States Capitol building at twilight wirth reflection in water.Joecho-16/iStock/Getty Images Plus

Once again, the federal government finds itself on the brink of a possible partial shutdown over Congress and the White House failing to reach an accord over spending bills for the new year.

In today’s here-again, gone-again operational environment in Washington, no one knows (and few are willing to guess) what may happen next. But expecting the unexpected has become more of a norm in recent times as Republicans and Democrats too often put party politics above what may be best for the country.

GOP Senate leader Mitch McConnell this week poured cold water on the threat of a shutdown, at least now. But whether it happens now or in the next year, a pending shutdown carries with it a number of potential challenges, and this may especially be true for agriculture, including western tree nut producers.

After a struggle to be included in USDA’s Market Facilitation Program (MFP) announced earlier this year, nut producers who are facing potential losses as a result of tariffs and trade war developments may have felt some relief with the news they would qualify to participate in the program to help offset market limitations posed by trade issues. With a possible partial shutdown of the federal government looming, it begs the question of whether MFP payments will be forthcoming anytime soon, and whether some lawmakers will be successful in extending the program beyond the new year.

So much, it seems, rides on the latest round of developments in the Nation’s Capital.

Unless something changes before this article is published (and it certainly could), a partial shutdown of the government, if and when it happens, would include the U.S. Department of Agriculture and the many agencies included in the USDA umbrella. Could this effect the second and last round of market facilitation payments, which were announced Dec. 17? In spite of numerous phone calls and inquiries, USDA seems reluctant to speculate on the possibilities, deferring any questions about a shutdown until it is clear whether one will actually happen or not. Assuming it does happen, we can only guess there may not be anyone at home at USDA offices to answer that question, so any guess is as good or bad as the next.

But it’s not just MFP payments that could be affected by such a shutdown. A new Farm Bill was approved by Congress last week, but whether USDA will be functional to administer the provisions of the legislation if a shutdown should actually happen, remains unknown.

The topic is far too volatile to justify any meaningful speculation as of this writing, but you can be sure nut producers and U.S. agriculture-at-large are concerned about the implications of a possible shutdown.

On the brighter side perhaps, any shutdown in Washington cannot be for an extended period of time. For one thing, a shutdown (as it stands today) would include the laying off of Homeland Security personnel, including Immigration and Customs Enforcement (ICE) personnel, the very people charged with maintaining order on U.S. borders. Since President Trump is threatening a shutdown over border security issues, it is likely the threat is intended more to be a political tactic than one that would last any longer than a few days or a week if indeed it should become a reality at all.

For the farmer, including specialty crop producers, it is important to realize that any shutdown of USDA offices could have a delayed effect. Government, just like business, would be hard pressed to shut down overnight and then resume business as usual without a certain degree of work projects stacking up because of inaction. Upon return to normal operating parameters, what would be the lasting effect of playing catch-up with the day-to-day duties required of the agency?

If a new shutdown is ordered, based upon former shutdowns, here are a few of the possible affects for agriculture:

  • Meat, poultry and grain inspection should continue

  • Statistical and economic reports would likely be delayed affecting commodity markets

  • Agricultural Research Service & Foreign Agricultural Service will close

  • Supplemental Nutrition program (or WIC) would be greatly curtailed

  • USDA would probably postpone issuing mortgages through Rural Housing Service

  • Rural Development operations would cease

  • FSA would be curtailed or shutdown

In addition, other federal agencies and services would be affected, including:

  • Commerce, Justice, Science and related agencies

  • Interior, Environment and related agencies

  • Financial Services and General Government

  • Food and Drug Administration and related agencies

  • Homeland Security will be greatly curtailed or shutdown

  • Transportation, Housing and Urban Development and related agencies

  • State, Foreign Operations and related agencies

If a shutdown comes, it will likely be on or before the Dec. 21 government holiday break gets underway. But analysts are suggesting the likelihood of shutdown is probably less this go around than in previous years. For one, the House, until Jan. 1, remains controlled by Republicans who would likely give the nod to President Trump’s border wall spending plan, though a Senate majority remains in question. Also, they suggest Republicans are likely to avoid a shutdown because the President has openly accepted party blame if such a shutdown comes about, a measure most conservatives wish to avoid.

Some are saying however, in Washington – these days – the unexpected is more likely to happen than not.

About the Author(s)

Subscribe to receive top agriculture news
Be informed daily with these free e-newsletters

You May Also Like