International Trade:

Implementation of 1985 Food Security Act Barter Provisions

NSIAD-87-181BR: Published: Jun 30, 1987. Publicly Released: Jun 30, 1987.

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In response to a congressional request, GAO investigated the Department of Agriculture's (USDA) failure to implement the mandated pilot barter program. The 1985 Food Security Act requires USDA to complete, by September 30, 1987, barter agreements with at least two countries to trade surplus agricultural commodities for strategic materials for the national stockpile.

GAO found that: (1) USDA did not take any implementation action because of the administration's proposed reductions in stockpile requirements and conclusion that the stockpile had excess quantities of strategic materials; (2) USDA and Department of Energy (DOE) officials believe that reimbursement and accounting issues cause inter-departmental problems, but do not expect them to prevent completion of the barter deals; (3) USDA would price its commodities at world market prices and would not expect to recoup acquisition and storage costs in order to prevent impairment of its ability to conclude barter transactions; (4) the previous inter-agency working group on barter was disbanded, since its work was completed and deemed unnecessary unless current efforts proved otherwise; (5) although some government officials believe that barter deals are difficult to implement, USDA stated that it is not resisting the program's mandated provisions and expects to comply with the provisions before the September 1987 deadline; and (6) although USDA is actively pursuing a barter arrangement with DOE for petroleum, bid invitation structuring and inter-agency payment terms may delay implementation past the deadline.

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