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Department of Agriculture and Producer Costs To Operate the Tobacco Program

RCED-85-30 Published: Feb 08, 1985. Publicly Released: Feb 08, 1985.
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Highlights

Pursuant to a congressional request, GAO provided information on: (1) whether the tobacco program operated at no net cost to the government; (2) whether assessments against tobacco producers were sufficient to meet possible losses in stored tobacco purchased with Department of Agriculture (USDA) loans; (3) the extent to which active tobacco farmers have purchased allotments or quotas and whether leasing has diminished; (4) alleged voting irregularities in a 1982 referendum in North Carolina that approved a tobacco price-support program; and (5) the actual value of tobacco stored by producer associations and the percentage of that tobacco expected to deteriorate over the next 5 years.

Recommendations

Matter for Congressional Consideration

Matter Status Comments
If Congress wishes to ensure that no costs to the taxpayer will result from CCC interest computation practices for the tobacco program, the No Net Cost Tobacco Program Act of 1982 should be amended to require that the amount of payments on principal and interest that the tobacco producer associations pay CCC on tobacco price-support loans must equal the amount of payments on principal and interest that CCC pays the Treasury for borrowed funds.
Closed – Not Implemented
After talking to relevant committee staff, it was found that, since the actions recommended by GAO would probably result in higher tobacco assessments to producers, Congress did not intend to act on it.

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Topics

Agricultural productsAgricultural programsCost accountingHealth hazardsLoan interest ratesPrice supportsTobacco industryBudget allotmentAgricultural marketingAgricultural commodities