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Rolling furlough may ease meat industry pain from US budget cuts

by
A customer looks browses the meat section at a supermarket in Milan, September 5, 2012. REUTERS/Stefano Rellandini
A customer looks browses the meat section at a supermarket in Milan, September 5, 2012. REUTERS/Stefano Rellandini

WASHINGTON (Reuters) - The Obama administration may institute a "rolling" furlough to keep meat plants open during automatic budget cuts rather than idle all 8,400 U.S. meat inspectors at the same time, a House subcommittee chairman said on Tuesday.

Meat packing and processing plants would have to close if all inspectors were furloughed at the same time to comply with the cuts. By law, plants cannot ship meat without the Agriculture Department inspection seal.

The administration estimates some $10 billion in production would be lost if inspectors were laid off en masse for two weeks, or their agency's share of cuts. Stores and restaurants could run short of meat temporarily.

"It appears now it's a rolling furlough," Texas Republican Michael Conaway, chairman of a House Agriculture subcommittee, told reporters. "No one plant would be shut down."

The timing and assignment of furloughs would be spread across the country to minimize the impact on processors, said Conaway, who asked the USDA last week to explain in detail how it would apply the budget cuts. A USDA spokesman was not immediately available for comment.

The USDA also did not respond to questions about how the agency would approach possible furloughs at its Agricultural Marketing Service (AMS), which among other things generates prices used as benchmarks for livestock futures at CME Group Inc. The USDA has not mentioned AMS in its comments about the sequester.

Conaway said the administration has not replied in writing to his request for information about meat inspections and the White House budget office "owes us an explanation." The budget office was the first to raise the prospect of a furlough of all 8,400 inspectors and a resultant meat industry shutdown.

Although the spending cuts are due to take effect on Friday, it could be weeks or months before the meat industry is directly affected. Meat inspectors are guaranteed at least 30 days' notice of a furlough.

The USDA has not specified a date when furloughs would begin, but has insisted they are unavoidable.

"This is a direct prescription from Congress to reduce every line item," Agriculture Secretary Tom Vilsack said last week.

Up to one-third of the USDA's 100,000 employees may be affected by furloughs. The USDA says the cuts would deny food aid to 600,000 pregnant women, new mothers and infants and also force closure of hundreds of Forest Service campgrounds, picnic areas and visitors centers during the spring and summer.

(Reporting By Charles Abbott.; Editing by Ros Krasny and Andre Grenon)

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