International Trade:

FAS Management of Livestock Cooperator Program

NSIAD-88-24: Published: Oct 26, 1987. Publicly Released: Oct 26, 1987.

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In response to a congressional request, GAO examined livestock cooperator activities under the Foreign Agricultural Service's (FAS) Cooperator Market Development Program to determine whether non-profit cooperators were distributing trade leads in a timely manner to other livestock exporters.

GAO found that: (1) although FAS knew of problems with certain livestock cooperators, it did not initiate actions to alleviate the conditions that permitted conflicts of interest and unfair competition; (2) FAS proposed a conflict-of-interest provision to amend program guidelines, but did not act expeditiously to prevent some livestock cooperators from entering into contracts with their subsidiaries; and (3) existing guidelines did not address distribution of trade leads, receipt of commissions, operation of for-profit subsidiaries, or restrictive trade standards.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: The conflict-of-interest regulation has been finalized as of October 13, 1989, and cooperator agreements have been modified to include the regulation's provisions. Certain cooperators that would not abide by the regulation's provisions have been terminated from the program.

    Recommendation: The Secretary of Agriculture should direct the Administrator, FAS, in finalizing and implementing the proposed conflict-of-interest provision as a regulation to: (1) include a requirement for cooperators to certify that their activities under the program will comply with the regulation and applicable FAS guidelines and agreements; and (2) set out procedures for handling cases of cooperator noncompliance, including possible corrective actions to be taken by cooperators and the potential sanctions to be levied by FAS, such as withholding of funding or being declared ineligible for participation in the program.

    Agency Affected: Department of Agriculture

 

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