Commodity Programs: Flex Acres Enhance Farm Operations and Market
Orientation (Letter Report, 12/30/93, GAO/RCED-94-76).

Congress recently began allowing farmers to plants crops other than
their designated program crops on up to 25 percent of their base acres.
This flexibility was one of the principal elements of the 1990 farm
legislation aimed at improving U.S. competitiveness in the international
agricultural market.  Another law passed that same year eliminates
income support payments on 15 percent of the base acres, even when the
designated program crops are planted on that land.  Taken together,
these provisions establish what are commonly known as flex acres.
According to the Agriculture Department (USDA), flex acres and other
changes in the law will cut government costs by about $12 billion from
1991 through 1995.  In addition, USDA officials say that although
farmers dislike losing part of their deficiency payments, they generally
like the increased flexibility they gain from flex acres and believe
that the overall impact on their operations is positive.  The net
economic impact of flex acres is inconclusive at this time. But given
the generally positive views of farmers and the projected savings to the
federal government, GAO sees no reason why flex acres should not be
continued or expanded in future farm legislation.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-94-76
     TITLE:  Commodity Programs: Flex Acres Enhance Farm Operations and 
             Market Orientation
      DATE:  12/30/93
   SUBJECT:  Farm subsidies
             Commodity sales
             Agricultural policies
             Agricultural programs
             Cost control
             Farm income stabilization programs
             Agricultural production
             Commodity marketing

             
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