Farm Payments:

Farm Reorganizations and Their Impact on USDA Program Costs

RCED-87-120BR: Published: Apr 1, 1987. Publicly Released: Apr 14, 1987.

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Pursuant to a congressional request, GAO provided information on farm reorganizations related to the $50,000 statutory limitation on direct payments under the Department of Agriculture's (USDA) crop subsidy and acreage reduction programs.

GAO found that: (1) the number of producers that USDA paid under its crop programs increased by 49 percent from 1984 to 1986; (2) USDA estimated that total payments subject to the limitation could increase to almost $8.8 billion for crop year 1986; (3) the number of new producers that resulted from farm reorganizations involving producers near the payment limit increased from about 1,400 in 1984 to almost 5,700 in 1986; (4) cumulative payments to new producers from 1984 to 1986 totalled about $328 million; (5) continuation of this trend over the 1987 to 1989 crop years could result in 22,300 new producers, and cumulative payments to those producers could total about $1.23 billion; and (6) annual costs for payments to new producers could be almost $900 million by 1989, and cumulative costs of new producers from 1984 to 1989 could be as high as $2.3 billion.

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