Food and Agriculture Issue Area Plan--Fiscal Years 1995-96 (Letter
Report, 08/01/95, GAO/IAP-95-21).
GAO presented its Food and Agriculture issue area plan for fiscal years
1995 to 1996.
GAO plans to: (1) identify approaches to help farmers adapt to a more
market-oriented farm economy; (2) recommend changes to improve the
fiscal integrity of crop insurance programs and farm risk management;
(3) evaluate the efficiency of commodity programs' administration; (4)
identify U.S. trade and marketing issues to enhance competitiveness; (5)
recommend improvements to food inspection programs and food safety laws;
(6) identify ways to achieve budgetary savings by consolidating food
safety programs and evaluating alternative funding mechanisms; (7)
analyze the government's multiprogram approach for delivering food
assistance; (8) provide information on the environmental impact of
current agricultural policies and practices; (9) address the
environmental problems caused by agriculture while improving
productivity; (10) help develop a long-term rural development strategy;
(11) review the implementation of agricultural legislation; and (12)
propose methods to save money by reducing bad debts on farm loans.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: IAP-95-21
TITLE: Food and Agriculture Issue Area Plan--Fiscal Years 1995-96
DATE: 08/01/95
SUBJECT: Agricultural programs
Consumer protection
Financial management
Environmental monitoring
Farm credit
Risk management
Agency missions
Rural economic development
Commodity marketing
Agricultural products
IDENTIFIER: 1995 Farm Bill
NAFTA
North American Free Trade Agreement
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Cover
================================================================ COVER
Resources, Community, and Economic Development Division
August 1995
FOOD AND AGRICULTURE ISSUE AREA
PLAN - FISCAL YEARS 1995-96
GAO/IAP-95-21
Abbreviations
=============================================================== ABBREV
USDA - U.S. Department of Agriculture
GATT - General Agreement on Tariffs and Trade
GPRA - Government Performance and Results Act
NAFTA - North American Free Trade Agreement
FOREWORD
============================================================ Chapter 0
As the investigative arm of Congress and the nation's auditor, the
General Accounting Office is charged with following the federal
dollar wherever it goes. Reflecting stringent standards of
objectivity and independence, GAO's audits, evaluations, and
investigations promote a more efficient and cost-effective
government; expose fraud, waste, abuse, and mismanagement in federal
programs; help Congress target budget reductions; assess financial
and information management; and alert Congress to developing trends
that may have significant fiscal or budgetary consequences. In
fulfilling its responsibilities, GAO performs original research and
uses hundreds of databases or creates its own to compile and analyze
information.
To ensure that GAO's resources are directed toward the most important
issues facing Congress, each of GAO's 35 issue areas develops a
strategic plan that describes its key issues and their significance;
the objectives and focus of its work; and the planned major job
starts. Each issue area relies heavily on input from congressional
committees, agency officials, and subject-matter experts in
developing its strategic plan.
The Food and Agriculture issue area reviews the activities and
operations of the U.S. Department of Agriculture (USDA), which is
the third largest civilian agency in the federal government with an
annual budget of over $60 billion. Because the U.S. food and
agriculture sector accounts for 17 percent of the gross domestic
product, 20 million jobs, and about 10 percent of the U.S. export
dollar, USDA's programs not only affect the lives of all Americans,
but also millions of people around the world. USDA's programs have
historically provided a safety net for farmers, rural America, and
millions of low-income households that depend on federal food and
nutrition assistance. However, over the last 3 decades federal
expenditures have grown tenfold.
GAO's food and agriculture work assists Congress in reexamining
USDA's programs and determining which ones can be eliminated,
streamlined, or consolidated to help reduce government expenses while
continuing to provide services efficiently. The principal issues
covered by the Food and Agriculture issue area are
-- reducing producers' reliance on, and the costs of, federal
agricultural commodity programs;
-- promoting a more market-oriented agriculture sector to enhance
U.S. global competitiveness;
-- restructuring the food safety system to eliminate fragmentation
among agencies and protect consumers from food-borne health
risks;
-- streamlining food and nutrition assistance programs by
eliminating overlap and reducing federal costs;
-- encouraging the development of more effective and efficient
resource conservation and environmental protection programs;
-- fostering the development of rural areas by helping to ensure
that federal funds are targeted to be more responsive to rural
needs;
-- reducing the federal government's exposure to financial risk
while continuing to provide the credit assistance needed by
farmers; and
-- revitalizing USDA so that it can better achieve its goals and
meet the challenges of the 21st century.
In the following pages, we describe our key planned work on these
issues. Because the 1995 farm bill will shape agricultural policy
for the next 5 years, this current plan should be considered an
interim one until the new policy structure is in place. If you have
any questions or suggestions, please call me at (202) 512-5138, or
one of my associates Bob Robinson or Bill Gahr at (202) 512-9801.
John W. Harman
Director
Food and Agriculture Issues
CONTENTS
============================================================ Chapter 1
FOREWORD
---------------------------------------------------------- Chapter 1:1
1
TABLE I: KEY ISSUES
---------------------------------------------------------- Chapter 1:2
4
TABLE II: PLANNED MAJOR WORK
---------------------------------------------------------- Chapter 1:3
8
TABLE I: KEY ISSUES
============================================================ Chapter 2
Issue Significance
---------------------------- --------------------------------------------------
Income support and commodity Continuing federal budget constraints and growing
programs: How effectively world market opportunities have resulted in the
and efficiently are U.S. need to reassess the risks and rewards of federal
agricultural commodity intervention in agriculture as well as its impact
programs supporting greater on U.S. market competitiveness. Most farm
U.S. competitiveness in assistance is provided to farmers through USDA's
world markets? commodity programs. However, these programs have
contributed to reducing the market orientation of
U.S. agriculture by guaranteeing farmers specific
prices, often higher than the market price, for
program commodities.
International agricultural International agricultural trade, once dominated
trade and market by the United States, is now highly competitive.
development: Have federal Some countries that were once the United States'
programs been effective in best customers have become strong competitors and
developing new markets and high-value products have emerged as the fastest-
enhancing U.S. global growing component of international agricultural
competitiveness? trade. Despite these changes, USDA's programs and
policies continued to favor bulk commodities.
Although the United States maintains a competitive
advantage in bulk commodities, it risks the loss
of opportunities in food processing and marketing.
Adapting to a new post-General Agreement on
Tariffs and Trade (GATT) and North American Free
Trade Agreement (NAFTA) trading environment also
poses major challenges for USDA.
Food safety: Are the federal Although the United States has one of the safest
government and the states food supplies in the world, contaminated food
effectively ensuring a safe causes billions of dollars in losses and about
food supply? 9,000 deaths every year. As a result, public
awareness and congressional interest in food
safety and quality issues have grown over the past
few years. However, the federal structure for
ensuring food safety is complex, fragmented, and
ill-equipped to handle this responsibility and
reduce public health concerns about food safety.
Food and nutrition The federal government spends about $40 billion
assistance: Can federal food annually on food and nutrition assistance programs
and nutrition assistance be that account for over 65 percent of USDA's budget.
provided more effectively USDA's patchwork of 14 federal programs provides
and economically to meet assistance to over 41 million Americans, and the
recipients' needs? majority of these recipients are children.
Budgetary constraints; concerns about fraud,
waste, and abuse in the programs; and the larger
welfare reform debate have contributed to the need
for congressional action in this area.
--------------------------------------------------------------------------------
Objectives Focus of work
---------------------------------------- --------------------------------------
--Assist Congress in identifying --Program changes and alternatives to
approaches to help farmers adapt to a move to a more market-oriented
more market-oriented farm economy. agricultural sector
--USDA's actions to improve the fiscal
--Recommend changes to improve the integrity of crop insurance programs
fiscal integrity of crop insurance and farm risk management
programs and farm risk management. --Program administration issues that
could reduce costs and enhance
--Evaluate the efficiency and effectiveness
effectiveness of commodity programs'
administration.
--Evaluate existing U.S. trade and --International factors that must be
marketing activities and identify ways considered in agricultural market
to improve U.S. competitiveness. development
--Ways to increase the competitive
--Identify barriers to marketability of position of U.S. agriculture in the
U.S. agricultural products and ways to world market
overcome these barriers. --Alternatives to improve the
competitiveness of U.S. agriculture
--Identify strengths and weaknesses of
marketing strategies and ways to improve
U.S. agriculture's market share and
balance of trade.
--Propose options for agricultural
programs that enhance the competitive
position of U.S. agriculture.
--Recommend improvements to regulatory, --The design and management of federal
inspection, and enforcement programs as food safety and quality programs to
well as food safety laws and make them more responsive, efficient,
regulations. and economical
--Benefits and drawbacks of proposed
--Recommend ways to achieve budgetary changes to food safety inspection
savings by streamlining and/or programs
consolidating duplicate and inefficient
food safety and quality programs and
evaluating alternative funding
mechanisms, such as user fees.
--Provide information on and analyses of --Current and proposed approaches for
the federal government's multiprogram providing food and nutrition
approach for delivering food and assistance to determine more cost-
nutrition assistance, including effective and efficient mechanisms for
relationships among various programs, delivering this assistance
populations served, and measurements of --Food assistance program mechanisms
program effectiveness. for promoting participant self-
sufficiency
--Analyze and recommend alternative
systems to better provide food and
nutrition assistance.
--Provide analyses of federal and state
activities to help participants in food
assistance programs become self-
sufficient.
--------------------------------------------------------------------------------
Table I
Key Issues
Issue Significance
---------------------------- --------------------------------------------------
Agriculture and the Productivity increases in U.S. agriculture have
environment: How can the relied on intensive management and chemical
government promote an nutrients. However, growing concern about the
effective and efficient negative impacts of these high-yield agricultural
balance between agricultural practices on the environment requires the
production and environmental development of new technologies. Congress and the
protection goals? agricultural community are searching for the
appropriate mix of technologies and policies that
will result in environmentally sound agricultural
practices that optimize long-term productivity and
profitability.
Rural development: How can The social and economic vitality of rural America
federal programs help deteriorated in the 1980s and continues to be
develop and improve the affected by the decline in employment in
economic viability of rural traditional rural industries. Improving the
areas more efficiently and conditions in rural America are vital to improving
effectively? the economic health of the nation. However,
historically the federal government's rural
development programs have not been coordinated,
flexible, or tailored to the individual needs of
rural communities.
USDA Organization and USDA is positioning itself to meet the challenges
management: How can USDA of the 21st century. As a result of the Department
streamline its organization of Agriculture Reorganization Act of 1994, USDA
and management systems to has begun implementing the most massive
better meet its missions and reorganization in its history. Over the next 5
goals? years, USDA estimates that it will reduce the
number of agencies from 43 to 29, reduce staff by
13,000, and close over 1,200 field offices. By
doing this, USDA hopes to improve services to its
customers and save the taxpayer over $4 billion.
With a new farm bill and this reorganization, USDA
will be in a stronger position to establish and
implement U.S. farm policy for the rest of this
century.
Other issue area work--farm The federal government provides farm assistance
finance: How effectively do through farm finance programs. These programs
federal farm credit programs provide subsidies in the form of lower loan rates,
meet farm credit needs while write-downs, and write-offs. However, this is a
minimizing financial risk? high-risk area for the federal government, and
billions of dollars loaned to farmers through
these programs are at risk.
--------------------------------------------------------------------------------
Objective Focus of work
---------------------------------------- --------------------------------------
--Provide Congress with information on --Environmental impacts of animal
the environmental impact of existing agriculture and crop production on
agricultural practices and policies. water quality and wildlife habitat
--Help Congress target limited resources --The costs and effectiveness of
devoted to mitigating the environmental current programs aimed at managing the
impact on agricultural production. environmental impacts of agriculture
--Evaluate strategies to respond to the --Integrative approaches (such as
environmental problems caused by whole-farm, watershed, and ecosystem
agriculture while continuing to improve management) that may better address
agricultural productivity. the wide array of environmental issues
facing agriculture
--The research priorities needed to
support the transition to sustainable
agricultural practices that improve
the environment and agriculture
--Help Congress develop a long-term --The role of the federal government
rural development strategy that in arresting the decline of rural
effectively and efficiently targets America and in developing rural
federal resources towards achievable assets
goals. --The efficiency and effectiveness of
federal efforts to improve rural
America's human resources and
infrastructure
--Review the implementation of the --USDA's efforts to implement the
Department of Agriculture Reorganization multiyear reorganization plan and
Act of 1994. reinvention efforts, such as
streamlining, National Performance
--Monitor and report on the federal Review recommendations, GPRA pilots,
government's implementation of the and other activities
Government Performance and Results Act --USDA's eight key ongoing pilot
of 1993 (GPRA). efforts implementing the GPRA
--Help Congress redirect USDA's farm --The balance between the need to
loan programs to reduce federal provide credit assistance to farmers
financial risk from bad debt. and reduce the government's financial
exposure to bad debt
--Recommend ways to strengthen USDA's --USDA's efforts to improve its
internal controls over farm loans to management and reduce loan losses in
prevent mismanagement, fraud, waste, and its farm loan programs
abuse.
--Save millions of dollars by proposing
methods to reduce bad debts on USDA's
farm loans.
--------------------------------------------------------------------------------
Table II
Planned Major Work
Issue Planned major job starts
------------------------- -----------------------------------------------------
Income support and --Assess the impact of the proposed 3-percent
commodity programs reduction in agricultural target prices.
--Review rice and cotton loan processing through
cooperatives.
--Review Federal Milk Marketing Orders.
--Evaluate commodity, conservation, and food
assistance issues relevant to the 1995 farm bill.
International --Review treatment of state-trading enterprises under
agricultural trade and GATT.
market development --Assess the impact of GATT and NAFTA on U.S.
agriculture.
--Evaluate new and alternative uses for agricultural
products.
Food safety --Evaluate alternative sources of funding for food
safety inspection and testing programs.
--Assess effectiveness of new seafood inspection and
quality control requirements.
--Assess effectiveness of USDA's changes to the meat
and poultry inspection system.
--Review structure of new food safety regulatory
system.
--Assess the impact of GATT and NAFTA on the safety
of the U.S. food supply.
Food and nutrition --Evaluate alternative systems for delivering food
assistance assistance.
--Review current system of disbursing food stamp
coupons and assess alternative delivery methods, such
as electronic fund transfers and cash payments.
--Evaluate federal and state efforts to assist food
stamp recipients to become self-sufficient.
Agriculture and the --Review how other countries are addressing the
environment problem of animal waste.
--Evaluate USDA's environmental research priorities
and its ability to meet farmers' needs.
Rural development --Evaluate how efficiently rural economic development
programs provide services.
--Assess the impact of federal and state interagency
coordination groups on the delivery of rural economic
assistance.
USDA's organization and --Review and analyze USDA's streamlining,
management reorganizing, and reinventing activities and
initiatives.
--Analyze USDA's programs to identify areas of
potential fraud, waste, and abuse.
--Evaluate items in USDA's budget that could be
eliminated or reduced.
--Analyze USDA's planned and ongoing computer and
telecommunications systems' policies, procurement
practices, and implementation efforts.
Other issue area work-- --Assess impact of alternatives for reducing USDA's
farm finance farm loan risks.
--Review USDA's beginning farmer program.
--------------------------------------------------------------------------------
*** End of document. ***