Agriculture and Food:

Rebuttal to the Cotton Council

RCED-96-117R: Published: Apr 24, 1996. Publicly Released: Apr 24, 1996.

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Pursuant to a congressional request, GAO reviewed a National Cotton Council report that criticized a GAO review of the Department of Agriculture's (USDA) cotton program. GAO noted that the Council believes that the review was flawed because GAO: (1) used improper factors in evaluating program costs; (2) did not properly evaluate the benefits of the marketing loan program; (3) improperly evaluated the costs of producing cotton; and (4) failed to consider the impact of the breakup of the Soviet Union on cotton prices. GAO believes that: (1) it properly evaluated cotton program costs by using the gross domestic product implicit price deflator as a measure to compare costs over a period of time and 1993 as the base year for program costs; (2) it properly determined that cotton exports and market share declined during the 3 years that the marketing loan program was in effect; (3) its use of multiyear averages instead of individual year averages did not affect its evaluation of the costs of producing cotton; (4) it properly took into consideration the breakup of the Soviet Union on the cotton market during 1991 and 1992; and (5) its evaluation methodologies were sound, its staff was experienced, competent, and fair, it adequately discussed its report with USDA and the National Cotton Council, and it took into consideration the Council's comments.

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