Federal Dairy Programs: Insights Into Their Past Provide Perspectives on Their Future
RCED-90-88
Published: Feb 28, 1990. Publicly Released: Feb 28, 1990.
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Highlights
Pursuant to a congressional request, GAO reviewed: (1) changes in the dairy industry over the last several decades; (2) the evolution of federal dairy programs; and (3) how federal dairy programs have affected dairy supplies.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Congress should continue to use the supply-demand adjuster tied to a relatively low level of expected surplus purchases by the Department of Agriculture (USDA) to set price support levels. |
Closed – Not Implemented
|
Congress rejected this approach in the 1990 farm bill. |
| Congress should gradually decrease the federal role in milk pricing. This could be accomplished by establishing new basing points for calculating distance differentials. |
Closed – Implemented
|
The Federal Agriculture Improvement and Reform Act of 1996 made substantial changes in the dairy program. Specifically, it directed USDA to develop and implement a new pricing system within the next 3 years. The act further directs USDA to establish new basing points and consolidate marketing orders. |
| Congress should gradually decrease the federal role in milk pricing. This could be accomplished by removing down allocation and compensatory payment provisions. |
Closed – Implemented
|
USDA has addressed this issue under its authority and has removed down allocation and compensatory payment provisions. |
| Congress should gradually decrease the federal role in milk pricing. This could be accomplished by eliminating the grade-A and distance differentials in federal orders. |
Closed – Implemented
|
The Federal Agriculture Improvement and Reform Act of 1996 made substantial changes in the dairy program. Specifically, it directed USDA to take steps to phase out distance differentials in federal orders over the next three years. |
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Topics
Agricultural assistanceAgricultural programsCommodity marketingDairy industryDairy productsFarm income stabilization programsFood supplyMicroeconomic analysisPrice regulationPrice supports