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A mess at FAS

WASHINGTON -- On Jan. 9, during his last news conference, outgoing Agriculture Secretary Ed Schafer pointed out that U.S. agricultural exports had grown to a record $150 billion in the last year, one-third of U.S. cash farm receipts, and challeng...

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WASHINGTON -- On Jan. 9, during his last news conference, outgoing Agriculture Secretary Ed Schafer pointed out that U.S. agricultural exports had grown to a record $150 billion in the last year, one-third of U.S. cash farm receipts, and challenged Obama, who was President-elect at the time, and Agriculture Secretary-designate Tom Vilsack to match that standard.

"The next president and his secretary of Agriculture will have to decide whether we will continue to see broader opportunities for our producers in global markets or to pull back," Schafer added.

That sounds high minded, but now come the revelations in USDA employee memos that the Bush team has left the Foreign Agricultural Service -- the agency Obama and Vilsack presumably would use to promote exports -- with such a deficit that the agency has had to curtail international travel and may have to furlough employees.

The very same day that Schafer held his news conference, FAS employees received a memo from outgoing FAS Administrator Mike Yost, a Minnesota soybean farmer, that he had begun the process of a notice of intent for an agency-wide furlough, government parlance for a short term layoff. He also attached a memo he had sent two days earlier to Schafer informing him that FAS had to cut expenses because it might soon be subject to one of the most embarrassing developments that can happen to a federal agency: violating the Antideficiency Act, the law that says federal agencies cannot spend money that Congress has not appropriated for them to spend.

Important functions

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FAS is an agency that many farmers do not even know exists. But for any farmer whose products are exported, it's important. For all the rhetoric in recent years about the superiority of the private sector, FAS is an example of a federal agency that performs functions that wheat and machinery salesmen can't function without. FAS's officers at embassies around the world and in Washington cover every country on the globe, tracking agricultural production and export sales and providing U.S. officials with intelligence on what foreign officials think about such developments as genetically modified seeds and biofuels. FAS handles U.S. donations of food to the world's hungry. It also distributes and oversees the use of $200 million per year in market development funds to groups ranging from the Alaska Seafood Marketing Institute to U.S. Wheat Associates to promote U.S. exports.

FAS's fiscal year 2009 budget deficit of $9 million, possibly a few million more, is so small by federal standards the problem is almost laughable. Appropriators could fix it with the swipe of a pen and no one would notice. In fact, FAS's entire budget -- $158.4 million in fiscal year 2008 -- is tiny compared with other parts of the Agriculture Department, much less the whole federal government. Yet this problem, if unresolved, could crimp an agency that is vital to U.S. agricultural exports just as the world economy is reducing demand.

How did the situation at FAS get to this point? Who's to blame?

A number of factors have raised FAS's cost of doing business in recent years. When the dollar's value was low, FAS's money did not go as far to pay foreign rents and local employees went up. When the State Department increased security for overseas U.S. facilities after the Sept. 11 terrorist attacks, it began charging other agencies for those costs. USDA has been pushing each division to put up money to modernize the overall information technology system. According to Yost's memo, the deficit consists of $2.05 million for increased costs overseas, $2.308 million to pay the State Department for rent and increased security and $4.35 million to fund USDA's departmental information technology initiative.

Who's to blame?

In his memo, Yost said the problems began when FAS did not get $10 million in mandatory cost increases in President Bush's fiscal year 2008 budget request and got worse when Congress passed a continuing resolution through March for FY09 rather than a full appropriations bill.

But Hill aides and FAS bureaucrats say the problems at FAS had accumulated since the beginning of the Bush administration, long before Yost and Schafer arrived. High level Bush administration officials, they say, never thought FAS was as important as the Office of the U.S. Trade Representative, which negotiates trade agreements, and did not make budget requests as big as were needed. They also say the Bush team never organized the marketing and food aid groups to whom FAS programs are important to go to Capitol Hill to lobby for FAS's budget they way previous administrations did.

A key Senate aide said the Bush administration never alerted the Hill to how bad the problems were. One cut that might have gotten the Hill's attention was the reduction in the budget for the international fellows program named for Senate Appropriations ranking member Thad Cochran from $3.45 million to $1.725 million.

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At the moment, FAS was stopped in its tracks.

The future of FAS

The Obama administration has not yet appointed an FAS administrator. But Yost's memo has gotten the attention of the new administration.

A senior USDA official said, "The department is going to be reviewing all of the options at our disposal and work to insure that in the future, FAS is funded appropriately."

Perhaps the new administrator and can rally farm groups and industries and anti-hunger advocates to give the agency the resources to do its job.

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