Wool and Mohair Program:

Need for Program Still in Question

RCED-90-51: Published: Mar 6, 1990. Publicly Released: Apr 19, 1990.

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Pursuant to a congressional request, GAO assessed the Department of Agriculture's (USDA) wool and mohair program.

GAO found that: (1) USDA made $665 million in wool payments from 1981 through 1988; (2) wool production declined from 110 million pounds in 1981 to 89 million pounds in 1988; (3) from 1977 through 1983, payments boosted wool production by 18 percent; (4) industry representatives have contended that the payments have improved wool quality and production and stabilized the domestic wool industry; (5) military purchases account for 8 percent of the annual domestic wool production, but could substantially decline as new synthetic materials are used; (6) from 1981 through 1988, mohair producers received $173 million in program payments; and (7) in 1988 alone, mohair payments represented $47.1 million, or 53 percent, of total program payments.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: The 1990 farm legislation continued the wool and mohair payment program for another 5 years. Some modification to the payment limits were imposed, but Congress did not act on the recommendation to consider what the program objectives should be. Therefore, Congress decided that the recommendation was not applicable, so it should be dropped. GAO may perform further analysis on this program.

    Matter: In light of the current budget constraints, the high per-pound subsidy cost, the broad objectives for the wool portion of the program, and the absence of objectives for the mohair portion, Congress should consider the need for the wool and mohair program. If Congress decides to continue the program, it needs to consider, in light of current conditions, what it wants the program's objectives to be. This could include establishing specific, measurable objectives for both wool and mohair and deleting from the Wool Act all references to wool as a strategic commodity and as a measure of national security, since those references are no longer applicable.

 

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