Congressional Decision Needed on Necessity of Federal Wool Program

CED-82-86: Published: Aug 2, 1982. Publicly Released: Aug 2, 1982.

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GAO reviewed the Department of Agriculture's wool incentive payment program to determine whether it is accomplishing its objectives and whether these objectives are still valid.

The federal wool incentive program has had little effect on encouraging wool production and improving wool quality because decisions to raise sheep are based primarily on the profitability of the lamb market. Since most producers decide to raise sheep regardless of federal encouragement, program payments do not necessarily encourage production. Furthermore, the increased use of synthetic fibers in military items, once made entirely of wool, and in commercial products has reduced the need for wool, and it is no longer on the list of strategic commodities. GAO found that, although program payments to producers have been substantial, wool production has declined by over 50 percent since the inception of the program. Furthermore, reports on the domestic wool market indicate that wool quality has not improved. Therefore, the major reasons for establishing a program to encourage wool production are not as important as they were when the program was initiated.

Matters for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: GAO continues to believe that the recommendation is valid. However, since Congress has been aware of the recommendation for some time and has not acted on it, GAO has no reason to believe that it will do so in the future.

    Matter: Congress should consider whether federal financial assistance should: (1) continue to be provided to encourage wool production; and/or (2) be provided to generally assist the sheep industry.

  2. Status: Closed - Not Implemented

    Comments: GAO continues to believe that the recommendation is valid. However, since Congress has been aware of the recommendation for some time and has not acted on it, GAO has no reason to believe that it will do so in the future.

    Matter: Congress should, if the program is retained, eliminate payments to noncommercial producers and payments for unshorn lambs because these payments are not accomplishing their intended objectives.

 

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