USDA touts cost benefit savings of $300 million over 15-year lease to provide $20 million more for research each year.

Jacqui Fatka, Policy editor

June 13, 2019

6 Min Read
KC Animal Health

After months of evaluations and voiced opposition, the U.S. Department of Agriculture will relocate the Economic Research Service (ERS) and National Institute of Food &  Agriculture (NIFA) to the Kansas City Region of Kansas and Missouri. The USDA team is evaluating multiple Class A office properties in Kansas and Missouri for a 120,000 sq. ft. space that will house both agencies and 568 employees and expects to be operational this fall.

“The Kansas City Region has proven itself to be hub for all things agriculture and is a booming city in America’s heartland,” Agriculture Secretary Sonny Perdue said in a statement. “There is already a significant presence of USDA and federal government employees in the region, including the Kansas City ‘Ag Bank’ Federal Reserve. This agriculture talent pool, in addition to multiple land-grant and research universities within driving distance, provides access to a stable labor force for the future. The Kansas City Region will allow ERS and NIFA to increase efficiencies and effectiveness and bring important resources and manpower closer to all of our customers.” 

The Kansas City region was selected for its existing concentration of USDA employees and operations, the more than 150 federal agencies in the area, the proximity to 13 land-grant universities and its central location in the agricultural heart of the country. This concentration is enhanced by the area's research capabilities and industry-led initiatives like the KC Animal Health Corridor.

Related:ERS, NIFA relocation discussion shows partisan divide

For months, details on a cost/benefit analysis were unknown, which was a main criticism of the proposal to move. In the announcement, USDA said a cost/benefit analysis and conservative estimates show a savings of nearly $300 million nominally over a 15-year lease term on employment costs and rent, or about $20 million per year, which will allow more funding for research of critical needs like rural prosperity and agricultural competitiveness and for programs and employees to be retained in the long run, even in the face of tightening budgets. On top of that, state and local governments offered generous relocation incentives packages totaling more than $26 million.

USDA stated that this relocation will give it the opportunity to attract a diverse staff with training and interest in agriculture. 

There are 13 land-grant universities, including agricultural research giants Kansas State University and the University of Missouri, within 300 miles of Kansas City — more than any other U.S. location. The National Bio & Agro Defense Facility (NBAF), USDA's state-of-the-art biocontainment laboratory for the study of diseases threatening the nation's animal agricultural industries, is opening in Manhattan, Kan., in 2022.

Related:ERS, NIFA move focus of House hearing

"With 56% of total worldwide animal health, diagnostics and pet food sales, the Kansas City region is home to more than 300 animal health companies, representing the largest concentration in the world," KC Animal Health Corridor president Kimberly Young said. "We welcome the opportunity to collaborate with the USDA to advance cutting-edge discoveries, develop the next generation of agriculture talent and ensure the safety of the nation's food supply."

Kansas City is already home to more than a dozen USDA agency operations. More than 5,000 USDA employees and contractors work in Kansas City for operations such as the Office of Animal & Plant Health Inspection Service and the Farm Service Agency. The Kansas City area also boasts 35,000 federal employees and a robust federal executive board serving the metro's 150 federal agencies.

Senate Agriculture Committee chairman Pat Roberts (R., Kan.) said the vital research that will occur at NBAF and the Animal Health Corridor makes the site selection a “natural fit.” Roberts added, “Agricultural research is a critical function of USDA, and I am committed to ensuring we continue to support and strengthen the research mission that our U.S. producers rely on. “

Sen. Jeff Moran (R., Kan.) added that the decision bolsters Kansas City’s status as a national leader in the agriculture industry. “It is always positive when our government can operate outside of Washington [D.C.] and closer to the people it serves, and I am certain that the decision to relocate NIFA and ERS to Kansas City is a good one.”

In a letter to employees, Perdue said although he announced in August the realignment of ERS under the Office of the Chief Economist, after hearing feedback, USDA will not move forward with the realignment plans. ERS will remain under the Research, Education & Economics mission area of USDA.

Opposition remains

Still, concerns over the move remain. Ron Wasserstein, executive director of the American Statistical Assn. (ASA), said there will be costs under a dismantled ERS.

“The relocation disrupts the quality, breadth and timeliness of ERS’ reports on topics ranging from trade and farm income to nutrition assistance and commodity projections to rural economies and food safety. Being located outside of [Washington] D.C. will also mean it will be far removed from its primary audiences and collaborators, not to mention the rich talent pool so appealing to Amazon for its new headquarters. Such setbacks will impact the work of ERS in the long run,” Wasserstein stated.

“We will also pay for USDA’s research funding agency being dissociated from the planning and collaborations that happen in person in Washington with funding agencies for health, energy, international development, basic research and more. The interdisciplinary research NIFA coordinates with the other agencies is especially important to ensuring we keep a growing population fed and nourished on existing farmland,” Wasserstein added.

ASA criticized the cost/benefit analysis, saying it failed to show the “bigger savings that could have been achieved by moving the agencies into USDA-owned spaces in the National Capital Region.” Its analysis is also unlikely to show the additional costs of doing business from two locations, ASA added.

“Leadership and staff will have to travel between the two locations, in addition to the locations they currently visit. There will also be the additional costs for the ERS and NIFA stakeholders who will need to travel to Kansas City in addition to [Washington] D.C. One should also consider the costs already noted of the likely impacts to the quality, breadth and timeliness of the agencies’ work,” Wasserstein said.

Mike Lavender, senior manager of government affairs for the Food & Environment Program of the Union of Concerned Scientists, said, “The damage was already done before Secretary Perdue made his decision. It was clear from the start that the Trump Administration was systematically hollowing out USDA’s ability to produce objective science. The White House proposed budget cuts to eliminate research that’s inconvenient to its interests, and at the same time, they’ve created this unnecessary relocation crisis, which is driving off scientists who conduct that very research.”

The House agriculture appropriations bill includes language to stop the relocation, and those opposed to the move encouraged the Senate to follow suit.

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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