Agriculture Overview:

U.S. Food/Agriculture in a Volatile World Economy

RCED-86-3BR: Published: Nov 6, 1985. Publicly Released: Nov 6, 1985.

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GAO reported on issues relevant to the development of U.S. food and agriculture policies, including: (1) the current state of the U.S. agricultural industry; (2) current trends in agriculture; and (3) potential future concerns.

GAO found that the agricultural sector: (1) accounts for 20 percent of the nation's gross national product and work force and helps to offset a growing U.S. trade deficit; (2) provides an important world development tool by helping to ensure adequate and reliable sources of food throughout the world; (3) has become more capital-intensive and technologically advanced and more dependent on the nonagricultural sector of the economy for production inputs; and (4) is highly sensitive to such broader economic problems as inflation rates and interest costs. GAO also found that, in the last 50 years, the government has assisted farmers with programs that provide price supports, research and development credits, marketing programs, and policies designed to support rural development. However, a number of programs are becoming costly and counterproductive because they: (1) provide high support prices in weak markets, which increases program costs and stimulates agricultural production in competing countries; (2) sometimes promote competing objectives; and (3) are based on production levels that result in a minority of large farmers receiving the highest level of support. GAO also identified a number of issues to be considered in the formulation of agricultural policy, including: (1) structural changes in the agricultural sector; (2) farm credit problems and their implications; (3) the impact of technological changes on agricultural production; and (4) the balance between efforts to promote agricultural production and resource conservation.

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