USDA Reorganization 2.0: Cut Researchers, Cut Research

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By Steve Suppan, Institute for Agriculture and Trade Policy

Steve Bannon, President Donald Trump’s former director of strategy, aimed to “deconstruct the administrative state.” The means of deconstruction are by now a familiar litany: Eliminating or not filling administrative positions; pressuring civil service bureaucrats and scientists to quit; not enforcing laws; abandoning lawsuits against industry; deregulation; budget cutting; eliminating programs.

In agriculture, the smiling, folksy face of deconstruction is U.S. Department of Agriculture Secretary Sonny Perdue, who specializes in deconstruction through reorganizing his agency to “improve customer service.” For example, the first phase of USDA reorganization included the elimination of the position of Undersecretary for Rural Development without prior consultation from the “customers” of rural development services.

In February 2018, the Trump administration’s Office of Management and Budget (OMB) complemented that first phase with a proposed 25 percent cut to USDA’s Fiscal Year 2019 budget, which was deeply unpopular with farmers and other “customers” of the USDA reorganization. IATP joined many organizations in criticizing the proposed budget as anti-farmer and anti-rural. Congress rejected that budget in May 2018, but Secretary Perdue is attempting to achieve the budget’s ends by reorganization means.

The second phase of USDA 2.0, announced on August 9, concerns two agencies targeted for budget cuts: The Economic Research Service (ERS) and the National Institute for Food and Agriculture (NIFA). These are not obscure bureaucracies. Their data gathering, analysis and support for forward-thinking research makes possible crucial programs serving farmers and rural and urban communities, the real consumers of USDA programs.

ERS analysis of agricultural, food and financial-related data is rated third-best among 2,510 agricultural economic institutions. That analysis includes crop prices and yields, rural employment, natural resource conservation, food stamp use and trade policy impacts. OMB proposed to cut the ERS budget for FY 2019 almost in half, from $86 million to $45 million. According to an analysis by the Applied and Agricultural Economics Association (AAEA), “The budget proposes to streamline the research efforts of the Economic Research Service by eliminating [OMB designated] low priority research (rural economy, natural resources and conservation, food choices related to SNAP [Supplementary Nutritional Assistance Program, popularly known as “food stamps”], and food safety).” ERS staff would be cut from 329 to 148 to eliminate that research.

Alan Guebert’s weekly column  cited an email from a Washington insider, according to which OMB Director Mick Mulvaney and Perdue “were (angry) that Congress did not go along with their proposed huge cuts to ERS” earlier this year and saw “this [re-organization] as a way to accomplish the same objective without having to convince appropriators to cut spending.”

The Hagstrom Report for September 10 (subscription required) stated that a former USDA researcher said the White House was unhappy about ERS research concerning the effects of proposed changes to SNAP in the Farm Bill. Mulvaney, a long-time proponent of cutting SNAP, proposed in the FY 2019 budget to replace it with a ‘Harvest Box’ of USDA-selected fruits and vegetables. Food assistance professionals criticized the proposal as impractical, inadequate and a distraction from Mulvaney’s plan to cut USDA’s nutritional assistance budget by 30 percent. The former USDA researcher cited by Hagstrom said that the White House was likewise unhappy with the ERS analysis of the agricultural price impacts of the Trump administration’s tariffs on steel and aluminum, due to retaliatory tariffs on U.S. agricultural exports.

NIFA funds and coordinates a broad array of research at land-grant and other public universities. OMB proposed a 7.7 percent cut in the NIFA budget to eliminate, according to the AAEA analysis, the following programs: “Farm Business Management; Sun Grants; Global Change/UV [Ultra-Violet radiation] Monitoring; Regional Rural Development Centers; Multicultural Scholars, Graduate Fellowships and Institution Challenge Grants; New Technologies for Agricultural Extension; Rural Health and Safety Education; Renewable Resources Extension Act; and Women and Minorities in STEM [Science Technology and Mathematics] Fields.” The appropriations committees voted in May 2018 to increase slightly the NIFA budget over its FY 2018 level.

The second phase of the USDA reorganization would require most ERS and NIFA staff to relocate outside the Washington, D.C. area and would move ERS from the Undersecretary for Research, Education, and Economics (REE) to the Office of the Chief Economist (OCE), a policy office that serves the Secretary.  ERS and NIFA staff knew nothing about the relocation plan until a briefing an hour before the Secretary’s announcement. Secretary Perdue explained that the relocation would save ERS and NIFA staff the cost of living and commuting in the Washington area, and result in USDA savings. He also claimed that relocated ERS and NIFA staff would be closer to their “customers” and that USDA had difficulty recruiting and retaining qualified staff to the DC area.

The American Statistical Association criticized the Secretary’s claims about ERS staff attrition rates, noting that USDA’s numbers unfairly “includes summer interns, a large program for the ERS and one that has a 100% attrition rate.” This criticism is one of many from USDA stakeholders who were not consulted prior to the reorganization, nor given an opportunity comment to USDA on it prior to implementation, which is scheduled for completion by the end of 2019.

Stakeholders outside the White House have delayed the reorganization implementation and criticized the USDA reorganization in letters to both the Senate and House agriculture committee leadership, copied to Secretary Perdue, from the American Statistical Association, the AAEA, and the ad hoc Friends of Agricultural Statistics and Analysis (FASA). IATP is a signatory to the FASA letter, which states, “We have serious concerns that its realignment and relocation out of the Washington, D.C. area would jeopardize the ERS’s products, relevance, and timeliness.” The letter urges Congress to keep ERS in the Washington area, maintain its budget and personnel at least at FY 2018 levels, and strengthen ERS’s role as a statistical and research agency by keeping it in the REE mission area.

IATP is also a signatory to a NIFA Strong coalition letter, sent on September 6 to the Senate and House agricultural leadership. That letter questioned the Secretary’s rationale for moving 400 NIFA staff out of the Washington area and the haste with which USDA has sought expressions of interest from land grant universities to host a new NIFA headquarters. The letter pointed out that Congress had appropriated funds for a new NIFA building lease in the Washington area—not outside of the Washington area. The letter requested a delay in in the relocation implementation, in part for USDA and Congress to respond to a list of questions, linked to in the letter.

Former NIFA administrator Sonny Ramaswamy, whose term expired in May, said of the relocation, “It’s weirdly punitive. I can’t figure out why they would do this . . . There’s no compelling rationale.” After Secretary Perdue transferred ERS administrator Mary Bohman to Animal and  Plant Health Inspection Service on the day of the reorganization announcement, ERS, like NIFA, is without an administrator.

In a September 7 press release, USDA announced that it would extend the deadline until October 15 for expressions of interest to host ERS and NIFA offices outside of the Washington area. The press release also stated, “USDA is seeking approval from the Office of Personnel Management and the Office of Management and Budget for both Voluntary Early Retirement Authority and Voluntary Separation Incentive Payments.” USDA anticipates resignations and early retirements among the staff required to relocate. Indeed, relocation-driven early retirements and resignations could result in the same, or even greater, staff cuts than those in President Trump’s proposed USDA budget.

In response to stakeholder concerns, Congress has begun to question the rationale and legislative authority for the reorganization. On September 10, Congresswoman Eleanor Holmes Norton of the District of Columbia called on the congressional leadership to hold a joint committee hearing to examine the consequences of, and legal and budgetary authority for, the second phase of USDA reorganization. She wrote, “Because the proposal to relocate USDA agencies out of D.C. appears to be unlawful and done without congressional consultation, an immediate hearing by the committees of jurisdiction is in order.” One question to be asked in such a hearing is whether the relocation will disrupt the capacity of the ERS to carry out the REE obligations as defined by Congress.

Secretary Perdue might ignore Representative Holmes Norton’s request, since she is not on the House of Representatives agriculture committee; he might even ignore an August 30 letter from the Democratic members of the House agricultural appropriations subcommittee. However, it will difficult to ignore, or even delay, answering the twelve questions (some of them multi-part) about the second phase in a September 7 letter from Senate agriculture Chairman Pat Roberts (R-KS) and Ranking Member Debbie Stabenow (D-MI). The final, two-part, question is “What kind of stakeholder input did the Department conduct before announcing this proposal? Why is USDA not seeking comment from the public on this proposal before deciding to implement it?”

If Secretary Perdue does not answer the twelve questions in a timely fashion to the satisfaction of the Chairman and Ranking Member, he may find that the Farm Bill and/or the agricultural appropriations budget will contain language to prevent the ERS and NIFA relocations.

Secretary Perdue, according to the September 10 Politico Morning Ag, disagreed with stakeholder concerns that the scientific integrity and capacity of ERS and NIFA would be harmed by the relocation plans and the transfer of ERS from the Undersecretary for Research Economics and Education to the Office of the Chief Economist.

However, the OCE itself is under fire for the farmer payout allocations in the USDA’s “Trade Mitigation Program,” announced on September 4, to compensate farmers for reduced income attributed to tariff retaliation against U.S. agribusiness exports. There was a large disparity in payment rates, ranging from a penny per bushel for corn, to 14 cents a bushel for wheat, to $1.65 a bushel for soybeans. According to Ryan McCrimmon in the September 5 Politico Pro Agriculture, Secretary Perdue responded to questions from the National Association of Corn Growers and the National Association of Wheat Growers that the methodology absent on September 4 would be forthcoming. According to the September 11 Politico Ag/Trade, the Wheat Growers estimate their tariff retaliation-related losses at 75 cents a bushel.

Secretary Perdue said that OMB and the White House Office of Economic Advisers “affirmed the numbers” for the compensation plan. The four-page methodology, released on September 13, explains how “USDA, in consultation with the Office of Management and Budget (OMB) and other White House offices” developed the methodology. The controversy triggered by releasing the payout allocations without simultaneously releasing the methodology and its trade policy assumptions underscores the imperative for sound data gathering and analysis delinked from White House exigencies.

IATP is one of many co-sponsors of a September 20 webinar, “Understanding USDA Relocation and Reorganization : Perspectives from Former USDA Chief Scientists and Administrators.”

Originally posted here.

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