The Hagstrom Report

Agriculture News As It Happens

Reorganization proposal could impact food safety, USTR

President Barack Obama’s proposal, announced today, to reorganize six agencies that promote business and trade would not have an immediate impact on agriculture, but it could have an impact down the line on trade agencies and on food safety inspections if Congress grants Obama “consolidation authority.”

A consumer advocate has told The Hagstrom Report that administration officials want to merge the Food Safety and Inspection Service, which is located at the at the Agriculture Department, with the food regulatory functions of the U.S. Food and Drug Administration, which is part of the Health and Human Services Department.

The merger would probably involve moving FSIS to FDA on the grounds that FDA would be independent from the Agriculture Department, which has the role of promoting food as well as assuring its safety. The advocate noted that food safety experts have long called for the food safety function to be independent of USDA, but that merging the two agencies would raise questions about the division of the budget for inspections

FSIS, whose inspectors must be present in every meat plant in the country, has a much bigger budget than FDA, which has responsibility for other foods. Twelve agencies are involved in food safety.

Saying “overlapping responsibilities among agencies have made it harder, rather than easier, for our small businesses to interact with their government,” Obama also proposed merging the Commerce Department’s core business and trade functions, the Small Business Administration, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, and the U.S. Trade and Development Agency.

The proposal under consideration originally also included moving the Foreign Agricultural Service into the newly merged agency, but USDA officials and farm groups said that FAS needs to interact with other divisions of USDA and so that merger would not make sense, and it was not included.

FAS, for example, gathers data for the monthly release of world supply and demand for agricultural products and also interacts closely with the Animal and Plant Health Safety and Inspection Service and the Food Safety and Inspection Service, both of which have domestic and international operations.

Farm leaders have sometimes complained about the need to deal with USDA, Commerce and USTR on trade matters, and the reorganization, if it is finalized, could potentially resolve some of the inefficiencies.

The location and the status of the Office of the U.S. Trade Representative is likely to become an issue as Congress considers whether to give Obama authority for this reorganization.

USTR was established as a separate office within the executive office of the president because Commerce Department officials continually urged U.S. trade negotiators to take a pro-business position, while State Department officials said that non-business foreign policy matters should determine whether the United States wanted to pursue an agreement or a liberalization or tightening up of trade rules.

In addition, the trade representative has ambassadorial status and heads an agency -- factors that are impressive to foreign officials. The proposal announced today did not make clear how those USTR matters would be handled.

Sen. Max Baucus, D-Mont.
Sen. Max Baucus, D-Mont.
Senate Finance Committee Chairman Max Baucus, D-Mont., said today he is concerned about merging USTR with other agencies.

“While we welcome the ability to reduce duplication and streamline government services, we are concerned about the impact that the president’s proposal could have on the ability of the United States to aggressively open new markets to American-made goods and services and create U.S. jobs,” Baucus said in a news release.

“Creating jobs must remain our number one priority, and a smart, aggressive trade policy that promotes our world-class agricultural and manufactured goods and services is critical to accomplishing that goal,” Baucus said.

“The Office of the U.S. Trade Representative is nimble, lean and effective -- and time and again it delivers on its mission and creates jobs here at home. Taking USTR, one of the most efficient agencies that is a model of how government can and should work, and making it just another corner of a new bureaucratic behemoth would hurt American exports and hinder American job creation.”

Jeffrey Zients

Jeffrey Zients
Office of Management and Budget Deputy Director for Management Jeff Zients said today that if Congress grants Obama the consolidation, the first proposal will be to merge the six business-oriented agencies, with a follow-up proposal to cover the food safety agencies to be one of the next.

Zients said there has not been a major reorganization of government in 50 years and that the government needs to be modernized. If Obama gets consolidation authority it would function like fast-trade trade negotiating authority, he said. Congress could only vote up or down on the proposal.

Zients also said the first proposal would include moving the National Oceanic and Fisheries Administration from Commerce to the Interior Department. That move, Zients said, would bring all regulation of salmon into one agency.

Obama has often noted that it makes no sense for different types of salmon to be regulated in different agencies.

The American Soybean Association issued a statement against merging the trade office.

“We believe that USTR should remain an independent agency within the executive office of the president, focusing on trade negotiations, trade agreements and trade enforcement,” the statement said.

The ASA said it was concerned that "folding USTR into a massive Department of Commerce or Industry structure would significantly weaken the coordination role played by USTR on trade interests across sectors, and the work on agricultural trade opportunities and barriers would be diminished."