The USDA failed to follow federal guidelines when it determined it would save money by moving two research agencies to Kansas City, said a review by the Agricultural & Applied Economics Association on Wednesday. The review “finds a major underestimate of true costs,” said the group, which calculated the government would actually lose money on the relocation.
While the USDA said the relocations would save $193 million on rent and salaries over 15 years, the AAEA, a professional society, estimated a loss of between $83 million and $182 million. The AAEA said the USDA exaggerated the cost of keeping the Economic Research Service and the National Institute of Food and Agriculture in Washington and did not consider the loss of brainpower that inevitably accompanies a long-distance move.
“If this relocation leads to a loss of expertise at ERS and NIFA that results in just a 1 percent reduction in the cost-effectiveness of farm bill expenditures over just two years, that would cost U.S. taxpayers $2.8 billion,” said AAEA president David Zilberman.
The AAEA said the USDA’s cost-benefit analysis did not consider securing lower-cost leases or moving the agencies into USDA-owned space in Washington. Research productivity will suffer from a relocation, it said, because of staff attrition, the time spent in hiring new staff, and the time those new staffers would need to familiarize themselves with the USDA’s research agenda.
The USDA cost-benefit analysis is available here.
The AAEA analysis is available here.