Flex Acres Enhance Farm Operations and Market Orientation
RCED-94-76, Dec 30, 1993
Pursuant to a congressional request, GAO reviewed whether 1990 farm legislation will reduce government costs and increase farmers' flexibility and responsiveness to market demands.
GAO found that: (1) although flex acres are designed to reduce the government's agricultural support costs and increase U.S. farmers' market competitiveness, the total impact of flex acres on farm income is unknown; (2) the Department of Agriculture (USDA) estimates that flex acres and other legislative changes will reduce government costs and federal payments to farmers by about $12 billion from 1991 through 1995; (3) farmers have gained greater flexibility by using flex acres and believe that flex acres' overall impact on farm operations has been positive and has improved farmers' crop rotation practices, response to weather conditions, compliance with conservation objectives, and efficiency; (4) farmers have increased their income by using flex acres to plant alternative crops; (5) allowing farmers the flexibility to grow crops outside of federal income support programs gives farmers the opportunity to use their land to respond to market demands; and (6) the government should expand the concept of flex acres in future farm legislation so that farmers can become more responsive to market forces.
- Closed - implemented
- Closed - not implemented
Matter for Congressional Consideration
Matter: While conclusive data on the full impact of flex acres on farmers' economic well-being are not available, flex acres have generally had a positive impact on farmers' operations and are projected to reduce federal spending. Because of the advantages of flex acres as a tool for reducing the budgetary costs of farm programs and for transitioning farmers to a market orientation, Congress should consider reauthorizing or expanding flex acres provisions in the 1995 farm bill.
Status: Closed - Implemented
Comments: Changes to farm programs made through the 1996 Farm Bill removed the link between deficiency payments and farm prices, and provided farmers much greater flexibility to make planting decisions. Farmers now have the freedom to plant any commodity they want on contract acres, with some limitations for fruits and vegetables.