January 18, 2019

5 Ways the Government Shutdown Affects the Food and Nutrition Sector

It’s day 28. The federal government shutdown is the longest in history due to a standoff over $5.7 billion in border wall funding. The unprecedented length of the shutdown means significant impacts on every sector. Here are 5 (of many!) ways the shutdown affects the world of food, agriculture and nutrition:


1. Growing concerns about the safety of the food supply

The news that the U.S. Food and Drug Administration (FDA) isn’t conducting regular inspections or reviewing imported foods can be alarming. And, consumer groups have already raised concerns about the safety of America’s food supply. But, there is debate around the shutdown’s real impact on food safety. Even when the government is fully functioning, the food industry isn’t inundated with food safety inspectors on daily, or even monthly basis, and continue to follow food safety regulations. Plus, the government’s response to outbreaks or other food safety emergencies remain fully funded, and FDA Commissioner Scott Gottlieb has announced his intent to prioritize on-going inspections of “high risk” facilities throughout the shutdown. A more subtle but troubling problem, is that low morale among workers who continue to work without pay could lead to missteps or oversights if the shutdown drags on.


2. Businesses that depend on government action are starting to get antsy

Many in the food and agriculture industries depend on some level of government support, approval, or feedback to keep their businesses or product development running. Without it, there could be revenue setbacks, that when combined with the other “small” effects of the shutdown, could result in more severe consequences. For example, there is limited support of farmers and ranchers from the U.S. Department of Agriculture (USDA) Farm Service Agency which normally helps them navigate tax paperwork, secure trade aid payments, apply-for and receive loans or participate in dairy programs. Some of the government’s “non-critical” functions such as approving labels, issuing guidance, or reviewing GRAS notifications or food contact notifications are essential for product development and launches. Another example: one DC Brewery may be at risk for going out of business because the Treasury Department’s Alcohol and Tobacco Tax Bureau has not approved labels necessary for the brewery to ship and sell their beer.


3. Important food-related government initiatives and regulations stall out

Academics, health professionals, consumer groups, and industry alike are eagerly anticipating the announcement of the Dietary Guidelines Advisory Committee. Delays in the announcement may impact related Dietary Guidelines activities making an on-time 2020-2025 Dietary Guidelines for Americans less likely. The Dietary Guidelines are essential for several reasons – they are the basis for critical changes to federal feeding programs, industry reformulation efforts, health professional care protocol, and nutrition education services. Additionally, the 2018 Farm Bill that was passed with bi-partisan support in December hasn’t seen the light of day at USDA. As Senator Debbie Stabenow (D-MI) said in her statement on the matter, “this shutdown will greatly slow implementation of this important bill, making it even more difficult for farmers to make planting decisions for this new crop year.”


4. Funding for programs that fight hunger bottoms out

Federal feeding program funding has taken a hit. Some programs, like funding for food banks that provide hungry community members with food are completely un-funded, and other programs are projected to run out of money in a matter of months.  While some programs like the National School Lunch Program (NSLP) will be funded through March, some programs, like the Supplemental Nutrition Assistance Program (SNAP) and Women, Infants and Children (WIC) will only last through February. The government hasn’t indicated how it will manage to feed the millions of Americans that depend on programs like these if the shutdown continues. Originally, it seemed like SNAP participants wouldn’t even receive benefits through February, but USDA recently announced that due to an obscure budgetary provision, they would be able to issue 4.8 billion in SNAP benefits in January, for use in February. States, hunger groups, and retailers alike are concerned that rolling out early payments could result in some people running out of food early in February.


5. Confidence in the food and agriculture economy is shaken

The above impacts, combined, could cause major economic ripple effects in the food and agriculture sector. As the shutdown stretches on, economists are starting to predict how it could affect the U.S. economy in a lasting way.  Even the White House has doubled its original estimate of the shutdown’s reduction of economic growth. Congress has asked Treasury Secretary Mnuchin to testify before the House Ways and Means Committee, as consumer and business confidence in the economy begins to crumble.


We’ll be keeping a close eye on the shutdown’s effects on the food and agriculture world. For more information, contact Emma Gregory at [email protected].


Emma Gregory, RD, is a senior account executive at FoodMinds, a division of Padilla in Washington, D.C.

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