Monday, June 24, 2019

Ag economists say moving USDA research agencies to Kansas City would cost, not save, millions of dollars

The U.S. Department of Agriculture recently announced plans to relocate the Economic Research Service and the National Institute of Food and Agriculture from Washington, D.C., to Kansas City this fall, on the grounds that it would move the agencies closer to stakeholders and save taxpayers $300 million over the next 15 years. But an analysis by the Agricultural and Applied Economics Association found that the move will actually cost taxpayers between $37 million and $128 million, Bryce Oates reports for The Daily Yonder.

"The AAEA economists, including two former ERS administrators, criticized USDA for overstating the costs of keeping ERS and NIFA in the capital region while failing to account for lost value of employees who choose to retire or resign rather than move. Analysts also criticized USDA for not making the full cost-benefit-analysis available to the public," Oates reports.

The economists also criticized the USDA for ignoring cost-saving measures that would have allowed the agencies to stay in the D.C. area, such as moving to cheaper real estate nearby. "USDA owns three buildings in the capital region already, AAEA said in the analysis, and the agency neglected to evaluate the option of eliminating rental payments altogether by moving employees into existing available space," Oates reports. 

"AAEA criticism of USDA’s projections also included lost value of research by employees. AAEA estimates that between 50 to 70 percent of ERS and NIFA employees would choose to retire or quit rather than move," Oates reports. The report estimates that between 250 and 400 employees will quit, and most of them are highly skilled workers with a Ph.D. The USDA will only be able to rehire about a quarter of them per year, the report projects, and even after the new workers are hired, it will take them about four years to match the expertise and productivity level of their predecessors. And employees who stay with the agencies and move from Washington D.C. will likely suffer a 25% reduction in productivity in the first year because some of their time will be occupied by moving, selling and buying homes, finding new schools and places of worship, and more, the report predicts.

The report adds another wrinkle to the already controversial issue. Since the USDA announced preliminary plans last August to move the agencies, many have protested that the move was an attempt to force out agency employees whose research has often proven unhelpful to President Trump's policies. Both agencies' employees recently voted to unionize and have joined the American Federation of Government Employees, Oates reports.

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