Wheat Commodity Program:

Impact on Producers' Income

RCED-93-175BR: Published: Sep 8, 1993. Publicly Released: Sep 16, 1993.

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Pursuant to a congressional request, GAO provided information on the Department of Agriculture's (USDA) wheat commodity program's effect on wheat producers' incomes, focusing on the: (1) program's costs and benefits to wheat producers and buyers; (2) distribution of payments to program participants by county and farms; and (3) distribution of government payments to farms whose wheat production accounted for 50 percent or more of the farms' crop and livestock production.

GAO found that: (1) the wheat commodity program cost the government an average of $2.2 billion annually from 1990 through 1992; (2) wheat producers' economic program benefits averaged 63 percent of total government costs due to idled crop lands; (3) the program cost wheat buyers $32 million annually due to the restricted wheat supply; (4) in 1990, USDA paid over $2.4 billion in wheat deficiency payments; (5) about 85 percent of the deficiency payments went to wheat-producing counties located in the Plains and northwestern states; (6) in general, a county's share of wheat deficiency payments was directly related to its share of wheat acres; (7) about 72 percent of the farms in the program received less than $5,000 each, since wheat was a supplementary crop in their operations; (8) one percent of the farms received more than $50,000 in deficiency payments and one farm received a total of $666,475; and (9) specialized wheat farms received about $782 million in all types of government payments in 1990.

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