A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
A look at the news

Towards a shutdown of American agriculture?

October 14, 2013

The current American farm bill expired on October 1, just when the American government began its “shutdown”1 plan. This situation is especially problematic for American farming, as it slows down not only the pursuit for a compromise on the next Farming Bill, but also the basic activities of farmers.

While the American economic growth does not seem to have been impacted by the shutdown, the failure to issue federal statistics is more worrisome. For instance, the Commodity Futures Trading Commission (CFTC), the National Agriculture Statistics Service (NASS) and the various USDA divisions––including the Foreign Agricultural Service (FAS) and the Agricultural Marketing Service (AMS)––have not released any data since the start of the shutdown.

The situation is having an impact on farmers and, in a wider sense, on agricultural market operators, who are forced to play it by ear. Without federal statistics, farmers cannot make decisions, such as setting harvest prices or deciding when to sell crops. In addition, this state of affairs has threatened to reduce the transparency and reliability of agricultural futures contracts on the Chicago Mercantile Exchange (CME) Group, especially regarding settlement prices for some agricultural products. Furthermore, various disbursements linked to federal programs scheduled for October have been delayed for lack of administrative activity.

The effects of the absence of these statistics are all the more unfortunate in light of the fact that farmers have never been so dependent on markets, and that a prolonged privation of key indicators could increase agricultural price volatility.

To make the situation even worse, the government shutdown postpones the Farm Bill negotiations between Democrats and Republicans. On September 19, the Republican-controlled House of Representatives passed a bill that reduces food aid programs by close to $40 million over the next ten years. But the vote is far from having eased people’s minds. The 2008 Farm Bill expired on October 1, and a compromise text still has to be proposed, since food aid represents a key area of contention between the House and the Senate. Only two options are available to the American elected representatives: A new prolongation of the 2008 Farm Bill, or the adoption of an agreement before the end of 2013.

In the end, the absence of a vote on the next Farm Bill and the consequences of the shutdown on American agricultural activities are magnifying uncertainty on the future of U.S. agriculture, especially on financial markets. This uncertainty could have particularly disruptive effects, such as increased volatility, market laissez-faire and soaring prices, especially for milk…

If the work conducted by American analysts––spared by the shutdown––is justly deemed crucial to safeguard the United States, it might be urgent to consider the vote on a new farm bill and the future of American agriculture as a component of national security, in order to avoid the worst.

1 Budget deadlock
Page Header
Paris, 16 June 2019