USDA's Vilsack to Reuters TV: To Be Meat Shortages Even if Inspector Furloughs Staggered

February 28, 2013 04:43 AM

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USDA chief insists furloughs are unavoidable but says any shortages wouldn't be immediate.

Even if USDA were to stagger meat inspector furloughs in the event of sequester-forced cuts, meat shortages would eventually arise, USDA Secretary Tom Vilsack said in an interview with Reuters TV while in New York.

Vilsack insisted that under a sequester, furloughs of inspectors are unavoidable, detailing that "80% of the budget of food safety is personnel. Of that amount, 88% is frontline personnel. Fifteen percent of the remaining portion of 20% of the budget is for the support of those frontline inspectors. So nearly 87% to 88% of the budget is those frontline inspectors. So if you're going to basically cut 5% to 6% of your annual budget, you're obviously going to impact frontline inspectors. And that's an unfortunate circumstance."

Under a furlough of inspectors, Vilsack explained that meat and poultry processing lines could not operate. "So that creates a huge problem with the market," he warned. "And obviously, at some point, you're going to have shortages, at some points, you're going to have more than adequate supplies. It just depends on how this is all worked out and how many days we have to furlough and how we stagger those days."

This is the first that Vilsack has mentioned staggering those inspector furloughs should they happen, but he also acknowledged that the furloughs would not take place immediately and the inspectors have not been notified of any potential furlough.

"They have not been given notice yet because we don't have the sequester," Vilsack explained. "But on March 1 or shortly thereafter, we will begin that process. It's not just about notice with reference to food inspectors, it's also about oral conferences that have to take place with the various employees who are impacted and affected by this decision. So it will take some time before the furloughs actually occur."

Vilsack also briefly mentioned other impacts, such as to the Women and Infant Children (WIC) Program where USDA estimates some 600,000 people will be placed on a waiting list and would not be able to buy as many groceries. Also, he said it could cause farmers to not be able to get loans and it could have impacts on conservation programs and other areas. He said those would be "micro" impacts and he also noted the potential macro impacts to the US economy if the sequester cuts unfold.

Some have raised the issue of what could happen at the USDA Agricultural Marketing Service which gathers market information that is used by the CME Group for some futures trading contracts. While Vilsack was asked about impacts to non food areas such as cotton inspections, and he replied, "Obviously, hopefully, we'll be able to figure out a way in which these furloughs can be structured in such a way to provide the least disruption I would say." However as he continued his answer, he returned to the food inspection situation.


Comments: Vilsack appears to be, as expected, toeing the administration line on the sequester cuts and continues to focus almost solely on the issue of food inspectors and now raising the prospect of meat shortages occurring on a spot basis if inspectors are furloughed. He also repeatedly urged Congress to act to avoid the furloughs. Recall he also called on Congress to approve a new farm bill with little success in pushing them to act. That situation was one that ended up being part of a "larger" picture and the sequester cuts appear to fall into that category. But he has been pressing the hardest on the sequester issue relative to meat inspections, seemingly escalating the rhetoric with each passing day while still not being overly specific on the impacts.


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