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MN2020 - Shutdown’s Economic Perils in the Information Age
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Shutdown’s Economic Perils in the Information Age

October 09, 2013 By Lee Egerstrom, Economic Development Fellow

Around this time of the year, Minnesotans start seeing the harvest reports rolling in from USDA, showing how many bushels of corn, soybeans, sugarbeets and potatoes have been plucked. But this Monday there was no weekly Minnesota crop-weather report from USDA.

A computer search for the weekly crop-weather report redirects you to a static webpage, which states: “Due to the lapse in federal government funding, this website is not available. After funding has been restored, please allow some time for this website to become available again.”

With headlines, such as “Shutdown hitting Main St. as well,” and “Farms hungry for information,” people are starting to realize government's important role in providing information that allows markets to functions, and households to make decisions.

Meanwhile, Kevin Diaz wrote “Farmers Get Lost in Budget Standoff” in the Oct. 7 edition of the Star Tribune. He looked at how some farm program provisions are reverting to 1949 “permanent law” because of the House’s collapse as a legislative body. One problem with that, Minnesota Sen. Amy Klobuchar was quoted as saying, is that “nobody really knows” what it will mean.

Agricultural media have been thoroughly reporting on how the shutdown is bottling up market information for livestock producers, meatpackers, food and ag importers and exporters, and out on the farm.

One especially helpful report, from Agrimoney.com reads, “US shutdown prompts investors ‘to cut ag exposure’.”  Commodity traders and analysts worried what lack of information will do to markets, and the U.S. Grains Council warned of “significant damage” to grain exports.

Katie Fitzsimmons at Minnesota Farmers Union has assembled the following list of USDA programs that relied on discretionary funds provided through the now-expired federal farm program:

“Beginning Farmer and Rancher Development – Healthy Forests Reserve Program – Biobased Market Program – Biorefinery Assistance – Repowering Assistance – Bioenergy Program for Advanced Biofuels – Biodiesel Fuel Education Program – Rural Energy for America (REAP) – Market Loss Assistance for Asparagus Producers – National Sheep Industry Improvement Center – Survey of Foods Purchased by School Food Authorities …"

And, there are: “Assistance for Community Food Projects – Rural Microenterprise Assistance Program – Funding of Pending Rural Development Loan and Grant Applications – Organic Agriculture Research and Extension Initiatives – Disaster programs – Supplemental Revenue Assistance Payments (SURE) – Outreach and Technical Assistance for Socially Disadvantaged Farmers and Ranchers – Value-added Agricultural Market Development Program grants – Wetlands Reserve Program – Grassland Reserve Program – Voluntary Public Access and Habitat Incentive Program – Small Watershed Rehabilitation Program – Desert Terminal Lakes Program – McGovern-Dole International Food for Education and Child Nutrition Program – Local and Regional Food Aid Procurement Projects – and Pilot projects to evaluate health and nutrition promotion in the supplemental nutrition assistance program (SNAP).”

Wait. There’s more: “Study on Comparable Access to Supplemental Nutrition Assistance for Puerto Rico – Whole Grain Products for school lunches and breakfasts – Biomass Research and Development – Biomass Crop Assistance Program – Farmers’ Market Promotion Program – National Clean Plant Network – National Organic Certification Cost-Sharing – Organic Production and Market Data Initiatives – Determination on Merits of Pigford Claims – and the Specialty Crop Research Initiative.”

Fitzsimmons’ entire list is offered here with a purpose.

Yes, there are subsidies for farmers and rural business people included in these programs, triggering criticism from some Americans. Yes, there are feeding programs for children and the poor. These programs, too, become targets for class-conscious Americans who think those little beggars ought to be more selective in choosing affluent parents, or that we can starve the poor out of poverty.

Looking deeper, however, it becomes obvious that an underlying role of most of these USDA programs involves information gathering and information sharing. This flow of information helps make markets transparent and accessible to all Americans. That is especially helpful for farmers and small business people.

But leveling the playing field has never served everyone’s interests. As W.C. Fields reminded friends (1941), “Never give a sucker an even break.”

The information flow is precious for academic researchers, state and local government agencies, nonprofit organizations, faith-based community service groups and everyone else committed to making government and community services efficient and cost-effective.

Then again, that isn’t a goal of the anarchists, ideological extremists and their befuddled allies in the House of Representatives. Reasons for holding hostage the U.S. budget, the farm bill’s programs, and the useful flow of market-sensitive information don’t include improving government and community service.

Time, it is often said, is money. In this age, so is information.

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