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Government Shutdown Impacts On Fresh Produce Industry
On Dec. 22, 2018, while many of us were getting ready for the holidays, federal offices across the country shuttered their doors.
In sum, nine federal agencies employing some 800,000 employees were closed for 35 days because of the inability for Congress and the Administration to reach an agree- ment on funding for border security that the President demanded is included in the appropriations package for the Department of Homeland Security. Ultimately, Congress passed a three-week stopgap measure allowing federal employees to return to work.
After the passage of that stopgap measure, Congress approved, and the Pres- ident signed, funding for the remainder of the fiscal year, which included an additional $1.375 billion in border security funding. In addition, the President also declared a national emergency, giving him the authority to move funds approved for Department of Defense construction to be used for the building of a wall along our southern border. This action is likely to be tested in the courts but has resulted in the reopening of the federal government for fiscal year 2019.
Although it is a welcome sign to see federal agencies reopen their doors, the longest shutdown in government history also shined a light on just how important it is to make sure federal agencies and their employees continue their work to ensure the safe production, transportation and sale of fresh produce for the American public.
The impact of this shutdown also has caused a ripple effect across the country, particularly in Washington, DC, where federal employees tasked with facilitating food safety, security and agricultural initia- tives had been prevented from working on issues under their purview. The President
10 / MARCH 2019 / PRODUCE BUSINESS
indicated in his remarks upon reaching a deal that either funding for a border wall will be included in a new agreement or he will use his executive authority to declare a federal emergency at the border, an issue likely to be contested in Congress and the courts.
There are many federal agencies vital to the fresh produce industry that were impacted by the shutdown. The USDA is set to release the updated Dietary Guidelines in 2020. However, the Advisory Committee has not yet been named as a result of the shutdown, and the Dietary Guidelines could be delayed. Specific to school nutrition, schools are reimbursed quarterly, so there is no lapse in funding during a shutdown. However, there were reports of schools reducing offerings, including fresh fruits and vegetables, but that appeared to be a precautionary move to save money in the event of lack of funding in later months. Because of the short-term funding bill, the USDA has authority to fund SNAP through April. Congress released funds for March benefits, and the USDA has the option to utilize reserve funds to carry through April. Furthermore, recipients did not experience a reduction in benefits because of the January shutdown, but because the USDA needed to provide February benefits in January, recipients likely will go more than a month before their March benefits are distributed. In addition, the USDA distributed $600,000 in funding during the shutdown to allow WIC agencies to continue to operate.
Additionally, implementation of the recently signed Farm Bill has been hindered since more agencies within the department have been closed; further delays in the implementation of these programs could have impacts on the 2019 growing season if the final resolution of the FY 2019 appro- priations bill is not agreed to. Consequently,
BY JOHN HOLLAY, SENIOR DIRECTOR, PUBLIC POLICY, UNITED FRESH
the shutdown has delayed the release of the report on the impact of the proposed United States Mexico Canada Agreement (USMCA), further delaying Congressional consideration of approval of the new trade agreement.
Programs available to producers also were impacted since Farm Service Agency offices were closed (except for two days) during the shutdown, which impacted the ability to access programs such as trade assistance, the Tree Assistance Program and the Non-in- sured Crop Disaster Assistance Program. In addition, the shutdown has further exacer- bated the efforts of producers to bring in vitally needed workers in a timely manner through H2A Visas. For many in the produce sector, the shutdown has complicated the already overburdened staff that process visa applications under the H-2A program.
At the Food and Drug Administration, we saw inspections of high-risk foods, including fresh-cut produce, temporarily interrupted during the shutdown, while the closure of the Environmental Protection Agency included the suspension of all new contracts and the cessation of enforcement activities not deemed necessary for security or public health. Additionally, the shutdown delayed the publication of the WOTUS (Waters of the US) rule and the comment period, and we are still awaiting clarity on a new timeline.
The entire supply chain of the fresh produce industry is impacted during a government shutdown. From SNAP and school nutrition, to trade assistance, food safety and Farm Bill implementation, it is vital government remains open to support the programs necessary to growing and consuming fresh produce. Although the storm seems to have passed for this fiscal year, it is clear neither the federal govern- ment nor the produce industry can afford another lapse in government spending.