Selling off USDA research agency to the highest bidder is a mistake

During August recess, USDA Secretary Sonny Perdue announced that the department would be relocating both the Economic Research Service (ERS) and the National Institute of Food and Agriculture (NIFA) outside of the Washington, D.C. area. Beside recruitment challenges, department cited high attrition, the difficulty of hiring agricultural economists into D.C., the desire to lower costs, and the importance of the agencies being closer to their stakeholders.

The department then asked for bids from states, cities, educational establishments, private entities, and other parties who might be interested in having all or parts of the two agencies located on their sites. Reportedly, 136 bids have been received.

{mosads}As a former administrator of the Economic Research Service — one of 13 primary federal statistical agencies — under Presidents Ronald Reagan and George H.W. Bush, my view is the USDA’s proposal will be a long-term negative for the department.

The primary criterion for locating a federal agency should be the purpose or mission of that agency and where that mission can be best accomplished. Certainly, not all federal entities have to be located with the nation’s capital. In the case of ERS, there were reasons 75 and even 50 years ago for a portion of its staff to be located away from Washington, mostly in Departments of Agricultural Economics in Land Grant Universities. An important policy goal of USDA back then was to improve agricultural productivity and efficiency to meet food needs of the future, and to help farmers make profitable adjustments to a changing agriculture. ERS staff worked on these issues jointly with their university colleagues.

Productivity, efficiency, and structural adjustments in agriculture are still important USDA policy goals. But, huge changes have taken place in American agriculture: farms are large and efficient, and farmers now get their management, marketing, and technology information from private and public sources worldwide. What they need most today are unbiased data and research that provide the bigger picture, the larger economic context within which business decisions are made. What are the trends in global markets and what factors will affect those trends? How do policies in other countries affect market opportunities? How do changes in patterns of consumer behavior change market opportunities for producers of various commodities? The answers to these and hundreds more questions like them need to be known and understood by decision-makers in all parts of our $1 trillion food industry as they consider their management strategies and long-term investments. 

{mossecondads}It is equally important that federal policymakers know the answers to these same questions as they consider policy effectiveness, changes, and alternatives, or just a need to understand what is happening in the food system. This is what ERS does. ERS is heavily linked to other federal agencies that both supply and use ERS information and research. There are regular staff interactions, sometimes through joint working committees, with, as examples, Commerce, Defense, Bureau of Economic Analysis, Energy, Census, and multiple USDA agencies. Partly through all these interactions, ERS remains constantly reminded of key policy issues and industry concerns, all of which help shape ERS research priorities. The data and research produced by ERS inform USDA officials and agencies, Congress, and food and agricultural organizations headquartered in Washington. In short, moving ERS out of the Washington area will move it away from its most direct stakeholders.

ERS has generally been effective in hiring experienced and new economists. The new OPM hiring authorities for economists, announced in October, will make it even easier to hire and retain economists in Washington. Other agencies, especially in USDA, have long seen ERS’s staff as potential recruits, resulting in a slightly higher rate of attrition than the overall average for USDA. This should be seen as a compliment to the agency’s staff and management. 

Over the years, ERS has built a reputation for quality and objectivity in its research, statistics, and analysis. The agency is now ranked the No. 3 agricultural economics research institution in the world. A major physical move that causes the loss of many experienced staff would cripple the agency and mean years of re-building and training to regain its present eminence. The secretary and the Congress should reconsider this counterproductive move.

John E. Lee, Jr. was administrator of the USDA Economic Research Service from 1981-1993. He is professor and department head emeritus at Mississippi State University.