Honey Program

Pursuant to a congressional request, GAO reviewed payment limitations governing the Department of Agriculture's (USDA) honey price support program, focusing on: (1) the statutory provisions that apply to payment limitations for the honey program as compared with those of other farm commodity programs; (2) payments received by honey producers and associated loan forfeitures for 1991 and 1992; (3) the potential for honey producers to reorganize their businesses in response to lower payment limitations; and (4) the potential impact on government costs if the payment limitation is set at zero dollars. GAO found that: (1) the honey program is not subject to statutory payment limitations applicable to other farm commodity programs; (2) the honey program aims to limit payments to producers by attributing benefits to individuals; (3) USDA data show that most honey producers received government payments of $10,000 or less, and only a few received more than $50,000 for 1991 and 1992; (4) in 1991, 4,186 honey producers received about $11.3 million in payments, and 3,477 producers received about $11.0 million in 1992; (5) the honey program has experienced loan forfeitures amounting to about $1.4 million in 1991 and $204,000 in 1992; (6) honey producers have had little incentive to insulate themselves from these limits since existing payment limitations have substantially exceeded the payments actually received; (7) it is unlikely that a reduction in the payment limitation will reduce government costs; and (8) if a zero dollar payment limitation is approved for the honey program without limiting loan forfeitures, government costs will likely increase.