Collection of Accurate & Voluntary Data = Federal Program Integrity

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farmdoc daily, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign

On January 19, farmdoc Project- University of Illinois at Urbana-Champaign posted a USDA Study by Robert Johansson, USDA Chief Economist, Anne Effland, USDA Economic Research Service and Keith Coble, Mississippi State University, entitled “Falling Response Rates to USDA Crop Surveys: Why It Matters.”

As background and explained in the report, “USDA’s National Agricultural Statistics Service (NASS) conducts a series of surveys throughout the year to assess farmer planting decisions and production conditions. Among other things, those surveys use farmer responses to estimate crop acreage and yields and provide early information on likely production outcomes for various crops in the current crop year. Those estimates underlie USDA and private analysis that affect markets throughout the year. The public benefits of those surveys are notable, and the literature on those benefits was recently reviewed by the Council on Food, Agricultural and Resource Economics (C-FARE), which highlighted how public information on market prices and quantities helps improve market efficiency (Lusk, 2013).

Producers and other decision makers depend on the objective information and decision support tools that analysts and researchers develop from NASS producer survey data. NASS survey enumerators have long responded to producer questions about the value of USDA surveys by pointing out how accurate NASS data can lead to improved data for RMA crop insurance payments and revenue support programs; improved crop recommendations by local extension agents; improved information for local agribusiness planning; and improved information for individual producers’ marketing and future planting decisions (USDA-NASS, 2015). The quality of the information and analysis provided from NASS data, however, depends on a high level of producer participation in these surveys. As the number of respondents falls, the statistical reliability of estimates and forecasts decline and the value of NASS estimates for a host of other purposes declines as well…”

Collection of Accurate Data = Integrity of Federal Programs

The falling number of respondents to surveys that are designed to provide valuable market information and facilitate the administration of government programs that eventually benefit those respondents is troublesome, in many respects.  Because without good data voluntarily provided by producers USDA cannot administrate federal programs efficiently and effectively. The collection of accurate and voluntary data equates to the integrity of any federal government program.

To cite a recent example where participation and data collection is critical to program integrity, in the 2014 Farm Bill a revenue-protection program known as Agriculture Risk Coverage County (ARC-CO) was enacted.  Overall, producers actively elected ARC-CO on 76% of participating program acres.  Corn and Soybean farmers elected the ARC-CO program for 94% and 97%, respectively, of base acres – likely because they are similar to decisions made on their crop revenue insurance coverage, another farm program reliable on accurate data from participants.

But now, some corn and soybean farmers who signed up for the ARC-CO program are raising concerns about significant differences in payments received between adjacent counties.  Clearly there must be some misunderstanding about the program because the ARC-CO program is working as designed by Congress.  ARC-CO is an upright farm safety net program designed to target federal taxpayer dollars where they are most needed. Payments to farms are triggered when crop revenues, at the most-honed county level, are less than the calculated ARC-CO guarantee (86 percent of the most recent 5-year Olympic average price multiplied by the most recent 5-year Olympic average county yield). During periods of low market-year average commodity prices, those producers in counties with high average yields will witness less revenue losses than farmers in counties with low average yields. The ARC-CO program uses county level data to help target benefits where they are most needed and keeps program costs down.  But again, this is a federal program that is highly dependent on accurate and sufficient survey responses to support NASS county yield estimates used in calculating ARC-CO payments to federal program beneficiaries who are also survey respondents.

The incoming Trump Administration has an electoral mandate to clean up Washington.  Coupling this with U.S. budget challenges suggests that federal programs better have a way of showing American taxpayers a significant return on investment (ROI).  If there is little-to-no ROI and/or a challenge to program integrity, don’t be surprised when that program is targeted for budget reductions or elimination.  Moreover, President Trump has tapped Congressman Mick Mulvaney  (R-SC) to lead the Office of Management and Budget.  Mulvaney is a member of the fiscally conservative House Republican Study Committee and maintains a 93 percent approval rating from Heritage Action for America, a group known for its opposition to farm policies.

Programs Are Already Targeted For Spending Reductions

On January 17, the U.S. Government Accountability Office (GAO) released a report – The Nation’s Fiscal Health: Action is Needed to Address the Federal Government’s Fiscal Future, stating “Federal spending continues to outpace revenue—by $587 billion in 2016—and, absent policy changes, the structural gap between revenues and spending puts the federal government on an unsustainable long-term fiscal path.”

Conservative groups in Washington have already been talking to Trump Tightening budgetadministration officials about spending reductions in many federal programs, including the elimination of some programs.  Some of those programs targeted include school meal standards, conservation technical assistance and the catfish inspection program.

Other groups are also targeting federal regulations to review and eliminate.  One of those groups, the House Freedom Caucus, made up of about 40 House Republicans, has released a report, “First 100 Days – Rules, Regulations & Exec Orders to Examine, Revoke & Issue Dec 2016,” that identifies federal programs including;

  • Electronic Export Application and
    Certification Charge,
  • Viruses, Serums, Toxins, and Analogous Products; Single Label Claim for Veterinary Biological Products,
  • Compliance With the National Environmental Policy Act and Related Authorities,
  • Corrections to Rural Broadband Access Loans and Loan Guarantees, and
  • Agricultural Conservation Easement Program

Without question all federal programs are going to be reviewed thoroughly during the Trump Administration.  To date, many agricultural programs have averted budget reductions, or elimination. But if waning program integrity becomes the issue, this places federal lawmakers in a much different position and could begin to erode their typical staunch political support.

Turnaround Needs to Happen Quickly

This situation can be turned around, but with debate beginning in a few months on the 2018 Farm Bill it needs to happen quickly.  To start, two things must happen:

  1. All farms groups must cooperate and coordinate consistently with USDA to increase emphasis to producers on the value in supplying timely and accurate data. It is squarely up to U.S. producers to provide their data timely and accurately to USDA.
  2. USDA must ensure producers and continually strive to strongly uphold their legal obligation to provide access to the data under a controlled environment to prevent accidental or willful disclosure of information that might identify a survey respondent.

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