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AGRIBUSINESS: Automatic Federal Spending Cuts

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Tomorrow the automatic across-the-board federal spending cuts, or sequestration, are virtually guaranteed to kick in. The cuts are intended to reduce government spending over a 10 year period, but for USDA, the effects will be somewhat more immediate, particularly in the area of meat inspection, as Ag Secretary Tom Vilsack told the crowd at USDA's annual Agricultural Outlook forum.

Vilsack also said what that will mean for USDA is every line-item of our budget will have to be reduced by a certain percentage, he said that could be somewhere around five to six percent and it impacts all of the processing facilities and plants and production facilities across the country.

In Iowa, the effect of a sequester on the Iowa Department of Agriculture is unclear. With about 10 million in federal dollars in its budget, IDALS handles meat inspection at small locker plants in the state; the money also funds aspects of both feed inspection and inspection of anhydrous ammonia tanks.

Iowa Ag Secretary, Bill Northey says IDALS would adapt if funding is disrupted for those and other programs supported by federal money. He stated that if programs are impacted it would be a small percentage, but there is still uncertainty on what Congress might do. Northy suggested, either give more flexibility to the folks in USDA, EPA, FDA and other parts of Federal government or decide to fund some of those things that are cut by the sequester.