By Leah Douglas, P.J. Huffstutter and Julie Ingwersen
WASHINGTON (Reuters) -The U.S. federal government shutdown that began Wednesday will halt some payments to farmers and delay access to federal farm loans, the latest blow for producers already facing low crop prices, record-high debts and a trade war at the height of the fall harvest.
The shutdown began at midnight after Republican and Democratic lawmakers could not agree on a plan to fund federal government operations. It will last until one party gets enough votes for its funding plan.
On Wednesday, the scope of the shutdown’s potential impact to U.S. farmers was beginning to emerge. Even short interruptions in payments could deepen farmers’ economic turmoil.
“It costs money to run those combines,” said Chad Hart, agricultural economist with Iowa State University.
During shutdowns, significant numbers of federal employees are furloughed and many operations temporarily stop. The U.S. Department of Agriculture furloughed about half of its 85,907-person staff, according to agency shutdown plans posted on its website.
The plans show the USDA will continue some operations deemed mission-critical, like administration of nutrition programs and food inspections.
But much of its other work will cease, such as processing of farm loans and making payments to farmers, including billions of dollars in disaster aid contained in President Donald Trump’s tax-cut and spending bill.
Tim Wells, who raises sheep in Paragould, Arkansas, was planning to apply this month for disaster aid for losses from recent weather events, but new applications are not being accepted during the shutdown. He also worries about payment delays for a USDA conservation project that he installed as a contractor.
“The way the farm economy’s been, nobody needs to wait because it takes so much just to operate,” he said.
The Trump administration and the USDA have blamed the shutdown on Democrats. Agriculture Secretary Brooke Rollins posted on social media: “billions in disaster aid blocked from reaching farmers.”
Democrats have said Republicans are to blame because they control both chambers of Congress and the White House.TRADE WAR, LOW PRICES
Farmers have significant economic concerns this autumn. Trump’s trade war with China has prompted the world’s top soybean buyer to shun U.S. shipments for rival Brazil.
Record-high corn harvests are expected to drive down prices, and the costs of farming necessities like seeds and fertilizer are surging.
Now, the USDA has stopped issuing weather-related disaster payments, accepting and processing farm loans, providing technical assistance for conservation programs and swaths of other agency work, the agency shutdown plan said.
It will also not process annual commodity and land conservation payments, typically issued by or in October, or advance money for loans the agency has already approved, according to the plan.
The USDA was in the process of issuing the last round of payments to farmers from the $10 billion Emergency Commodity Assistance Program, a one-time economic assistance payment to some commodity farmers, in the days before the shutdown.
Four farmers told Reuters they had received payments on Tuesday night, and while the amount of money was small in some cases, it would aid them through the shutdown.
The timing of this shutdown is particularly disruptive because farmers often rely on USDA loans to pay for machinery, fertilizer and other expenses during harvest season, said economist Hart.
Farmers planning for next year’s growing season could also hit roadblocks, said Zach Ducheneaux, administrator of the USDA’s Farm Service Agency under the Biden administration.
“If you’re trying to buy land with an FSA (Farm Service Agency) loan, you could have that opportunity disappear,” Ducheneaux said.
(Reporting by Leah Douglas in Washington and P.J. Huffstutter and Julie Ingwersen in Chicago. Editing by Emily Schmall and David Gregorio)
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