June 12, 2015
CapitalPress.com
3
USDA computer overhaul $140 million over budget
Farm program
system incomplete
despite $444
million investment
By MATEUSZ PERKOWSKI
Capital Press
The USDA’s Farm Ser-
vice Agency is seriously over
budget on a computer system
overhaul that achieves only a
fraction of its intended goals,
an internal audit found.
The agency has spent
$444 million on the project
— known as Modernize and
Innovate the Delivery of Ag-
ricultural Systems, or MIDAS
— which is roughly $140 mil-
lion more than projected in
2010, according to USDA’s
Office of Inspector General.
The MIDAS project also
remains unfinished about
two years after its expect-
ed completion date. USDA
stopped work on it last year
for re-evaluation.
“These cost and time over-
runs were caused by ineffec-
tive project management and
oversight,” the audit said.
The MIDAS project was
intended to revamp the Farm
Service Agency’s comput-
erized system for oversee-
ing farm subsidies and other
programs, improving overall
performance while reducing
the agency’s reliance on “high
risk antiquated technology.”
At this point, though, the
MIDAS system has only re-
placed one of the 66 comput-
er applications that are used
to implement the farm pro-
grams. By another measure,
MIDAS has accomplished
fewer than 22 percent of the
1,800 “detailed requirements”
for overseeing farm records,
acreage reporting, informa-
tion management and other
tasks, auditors said.
Even with this reduced
scope, the total cost of the
system, including mainte-
nance, will hit $824 million
by 2022, which is nearly 45
percent higher than initially
estimated, they found.
However, it’s possible that
USDA may decide that con-
tinuing MIDAS isn’t worth
the expense.
With the help of a
third-party evaluator, the
agency “must determine
whether the benefits derived
from the solution warrant
that level of resource com-
mitment,” the audit said. “If
not, USDA and FSA must
look for alternative options
for modernizing the delivery
of farm programs.”
Auditors largely blamed
the mismanagement of MI-
DAS on how the agency
structured its project team and
handled its financial arrange-
ments with contractors.
Employees who were as-
signed to develop MIDAS
were segregated from the
rest of the agency to “foster
a competitive spirit,” but the
decision created an “adversar-
ial relationship” in which they
worked at cross purposes with
other information technology
experts, the report said.
As MIDAS employees
made decisions in a “bubble”
and worked on similar tasks
as other IT professionals, the
conflict resulted in “cost over-
runs and timeline delays,” the
audit said.
“Thus, these two teams
were working toward a sim-
ilar goal using two separate
and unique solutions, leading
to an ‘us versus them’ mental-
ity among MIDAS and other
staff members,” according to
auditors.
Auditors also faulted the
agency for its dealings with
outside contractors, who re-
ceived more than 80 percent
of the $444 million spent on
MIDAS.
The USDA used “time and
materials” contracts that com-
pensate outside companies
for labor and materials but
provided “no positive profit
incentive to the contractor for
cost control or labor efficien-
cy,” the report found.
Such contracts require dili-
gent government surveillance,
but auditors found the US-
DA’s oversight lacking.
For example, one contrac-
tor “did not properly plan
staffing and labor hours, and
had provided poor status
reports to the government,
which misled the government
team and hindered visibility
into ongoing schedule issues.”
In a response letter to the
audit, FSA Administrator Val
Dolcini — who was appoint-
ed after work on MIDAS
was halted — said he agreed
with the audit’s recommen-
dations, such as conducting a
third-party independent anal-
ysis of the system and estab-
lishing clearly defined mile-
stones for future information
technology projects.
In a statement to Capital
Press, USDA said that it’s
successfully working through
management and budget chal-
lenges related to MIDAS.
Auditors found that the sys-
tem “increased functionality
in the field and oversight has
improved during the past two
years” and agreed that ceasing
work on MIDAS was the right
decision, USDA said.
Study: Organic farming good for bank account
Profits compare
favorably to
conventionally
grown crops
By DON JENKINS
Capital Press
Dan Wheat/Capital Press
Freshly loaded hay hits the highway near George, Wash., on June
8. Rain damaged the first cutting and no one is buying a lot yet,
one grower says.
Columbia Basin
first-cutting rough go
By DAN WHEAT
Capital Press
Photos courtesy of Washington State University
Washington State University soil scientist John Reganold has co-written a paper with WSU entomolo-
gist David Crowder on the profitability of organic farming.
Washington State University entomology professor David Crowder has co-written a paper with WSU
soil scientist John Reganold.
decades, not just recently, Re-
ganold said. “That was kind
of a surprise finding.”
Organic farm yields were
10 to 18 percent lower, but
the food sold for 29 to 32 per-
cent more than conventionally
grown crops.
Reganold and Crowder
calculated that even if the
price difference dropped to
only 5 to 7 percent, organic
farmers would still match the
profits of their conventional
counterparts.
“Our findings suggest that
organic agriculture can con-
tinue to expand even if premi-
ums decline,” the professors
wrote.
Labor costs were 7 to 13
percent higher on organic
farms, but overall production
costs were not significantly
different, according to the
study. Reganold said organic
farmers spent less on pesti-
cides and fertilizers.
The U.S. Department of
Agriculture does not have an
official estimate for organic
retail sales. Based on industry
reports, USDA cites estimates
that domestic organic food
sales reached $35 billion in
2014, more than 4 percent of
total U.S. food sales.
The labor-intensive nature
of organic farming may be a
plus in developing countries,
Reganold said.
In the Pacific Northwest,
dry summers and innovative
farmers suggest the region
can expand organic produc-
tion, he said.
“The Northwest is a good
place to be organic from ev-
erything I’ve seen,” Reganold
said. “People want to buy or-
ganic food. They also want to
buy local food.”
WARDEN, Wash. —
First-cutting alfalfa is wrap-
ping up in the northern Co-
lumbia Basin and Timothy is
right behind.
It hasn’t been the best year
for first-cutting. A big rain
May 13 and intermittent rains
through the end of the month
took its toll on quality.
“We had thunder clouds
almost every four days with
some rain. It would hit here
one day and there the next,”
said Shawn Clausen, a War-
den alfalfa grower.
“Probably over half my
acres are feeder hay,” he
said. It’s under contract, but
on the open market feeder
hay is fetching about $130 to
$150 per ton, he said.
Premium hay is more
than $200 per ton if anyone
can find any, Clausen said.
But no one is buying a lot
right now, he said. Exporters
still have a lot of 2014 crop
left because of the long-
shoremen work slowdown
at ports over winter. A lot of
that carryover is probably
better quality than first-cut-
ting, Clausen said. Dairy-
men aren’t buying because
the quality’s not there, he
said.
Chep Gauntt, of Pasco,
was one of the few to har-
vest early, before the May
13 rain. He said about 30 to
50 percent of first-cutting
alfalfa in the lower Colum-
bia Basin — Basin City to
Hermiston — was cut with
20 percent of that baled be-
fore the rain.
Most everyone since then
experienced mild to severe
damage, Clausen said.
A
year
ago,
drought-stricken California
dairies were snapping up a
lot of great quality first-cut-
ting in Washington. That’s
not happening this year.
“Today is my first day
baling hay with no rain dam-
age but it’s way over mature
so it won’t test real well (for
protein and nutrient quali-
ty),” he said on June 9.
He is finishing at 4 tons
per acre, up from a normal
2.5 to 3.
“Right now is ideal Timo-
thy conditions (hot and dry).
A lot of beautiful Timothy
is being put up. But rain
lodged some Timothy on the
ground, causing brown leaf.
So some growers are battling
that,” he said.
For alfalfa growers,
first-cutting is normally tops
in protein and profits.
“It’s usually where 35 to
40 percent of my production
is,” Clausen said. “I have
three more chances (cuttings)
to get it right.”
Growers in the Kittitas
Reclamation District, around
Ellensburg, are figuring on
just one cutting of Timothy
this year because of drought.
Growers of Timothy and al-
falfa in the Roza Irrigation
District in the Yakima Valley
are also planning for just one
cutting because of drought.
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Organic foods worldwide
are significantly more prof-
itable than conventionally
grown crops and will stay a
moneymaker even if organic
prices fall as production rises,
according to a new study by
two Washington State Univer-
sity scientists.
Soil scientist John Re-
ganold and entomologist
Dave Crowder collaborated
on a paper published Tuesday
in the Proceedings of the Na-
tional Academy of Sciences.
In a key finding, they con-
cluded that organic farming
was 22 to 35 percent more
profitable than conventional
farming.
The finding held up for
dozens of crops on several
continents over many de-
cades, according to the study.
“I think both John and I
were surprised,” Crowder
said. “We really didn’t know
what to expect.”
The Pullman-based pro-
fessors decided two years
to compare the profitability
of organic and conventional
farming. To their surprise, no
one had studied the question
from a global perspective.
“Although organic agricul-
ture is rapidly growing, it cur-
rently occupies only 1 percent
of global cropland. Whether
organic agriculture can con-
tinue to expand will likely
be determined by whether it
is economically competitive
with conventional agricul-
ture,” Reganold and Crowder
wrote in an article summary.
They reviewed 44 studies
published over the past 40
years comparing the financial
performances of 55 organic
and conventionally grown
crops on five continents. Most
of the studies were done in
Europe and North America,
including one in Washington
state. The surveys dated back
to the 1970s and the profit-
ability of organically grown
Midwest corn.
“I felt like there was a nice
set of data,” Crowder said.
The reports showed that
organic farmers have been
enjoying consistently high re-
turns on their investments for
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