Lessons To Be Learned From Offsetting the Impact of the Soviet Grain Sales Suspension
CED-81-110
Published: Jul 27, 1981. Publicly Released: Jul 28, 1981.
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Highlights
On January 4, 1980, the President announced that, for foreign policy and national security reasons, the federal government was suspending the shipment of about 18 million metric tons of agricultural commodities to the Soviet Union. The President directed the Department of Agriculture (USDA) to take actions to offset the suspension's impact on farmers. These offsetting actions, most of which were concerned with stabilizing market prices, included removing the suspended grain from the market by increasing the wheat and corn price-support loan rates, adjusting the farmer-owned reserve program, purchasing grain directly from farmers and country grain elevators, and purchasing exporters' undeliverable grain contracts with the Soviet Union.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Agriculture | The Secretary of Agriculture should develop and keep current a contingency plan that would include: (1) an assessment of whether existing farm programs are flexible enough to efficiently and effectively offset the impact of a grain sales suspension on farmers; (2) an evaluation of the types and availability of data needed to determine on short notice the extent and severity of a suspension's impact on farmers, grain elevators, grain transporters, and exporters; and (3) an analysis of the extent, if any, to which the impact on each of the agricultural sectors should be offset. |
Closed – Not Implemented
GAO believes that the recommendation is valid. Although USDA has been required by law, since 1981, to act, it has not done so, and GAO has no reason to believe that it will act in the near future. Additionally, the committees have not pressed the issue.
|
| Department of Agriculture | The Secretary of Agriculture should, after assessing existing farm programs, develop and submit to Congress any legislative recommendations for modifying existing programs or instituting new programs that the Secretary finds are necessary in developing a contingency plan. |
Closed – Not Implemented
GAO believes that the recommendation is valid. Although USDA has been required by law, since 1981, to act, it has not done so, and GAO has no reason to believe it will act in the near future. Additionally, the committees have not pressed the issue.
|
| Department of Agriculture | If the Commodity Credit Corporation again considers purchasing exporters' contracts to offset the impact of any future suspensions, the Secretary of Agriculture should direct it to: (1) prepare an economic justification for each commodity involved in the suspension to determine if such purchase is necessary; and (2) estimate any suspension-related benefits and detrimental effects to the exporters and use both estimates in determining the extent of federal assistance needed. |
Closed – Not Implemented
GAO believes that the recommendation is valid. Although USDA has been required by law, since 1981, to act, it has not done so, and GAO has not reason to believe that it will act in the near future. Additionally, the committees have not pressed the issue.
|
| Department of Agriculture | If the Commodity Credit Corporation again considers open-market purchases as an offsetting action, the Secretary of Agriculture should direct it to purchase only the types and grades of commodities suspended from shipment and to make such purchases at prices within a reasonable amount of the existing market price. |
Closed – Not Implemented
GAO believes that the recommendation is valid. Although USDA has been required by law, since 1981, to act, it has not done so, and GAO has no reason to believe that it will act in the near future. Additionally, the committees have not pressed the issue.
|
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Topics
Agricultural policiesAgricultural programsExportingFarm income stabilization programsForeign salesGrain and grain productsInternational food programsInternational tradeMonitoringPlanning