Dairy Termination Program:

An Estimate of Its Impact and Cost-Effectiveness

RCED-89-96: Published: Jul 6, 1989. Publicly Released: Jul 6, 1989.

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Pursuant to a congressional request, GAO estimated the cost-effectiveness of the Dairy Termination Program and its impact on milk production and dairy surpluses through 1990.

GAO found that: (1) although the program could reduce milk production from 1986 through 1990 by 39.4 million pounds, it will not have a lasting effect, since annual reductions have declined each year since 1987; (2) reductions in federal purchases of surplus dairy products led to estimated net savings of $2.4 billion from 1986 through 1990; and (3) although the program temporarily reduced surplus purchases in a cost-effective manner, the cost and impact of any future program was unknown because of the factors influencing farmers' decisions to bid on a future program.

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