Farm Programs:

Analysis of Options for Targeting Payments and Crop Loans

RCED-87-144: Published: Sep 10, 1987. Publicly Released: Sep 10, 1987.

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In response to a congressional request, GAO examined the various options for targeting farm price and income stabilization programs, including: (1) redistributing payments from financially sound to financially stressed farmers; (2) lowering the statutory payment limit; and (3) limiting crop loans.

GAO found that: (1) based on two different models, the first option would decrease farm payments from 10 to 45 percent and increase cash flow for many farmers; (2) lowering the payment limit would reduce federal spending, but could significantly reduce some financially stressed farms' income and net worth; and (3) limiting farm loans would not severely impact the farm sector, but would not necessarily lead to budget savings, depending on loan repayment rates.

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