Rice Program: Government Support Needs to Be Reassessed (Chapter Report,
05/26/94, GAO/RCED-94-88).

The rice program, run by the Agriculture Department, cost an average of
$1 billion annually between 1986 and 1992 to support rice producers and
rice exports. These costs remained substantial because of (1) increased
government costs resulting from the marketing loan provision and (2)
continuing high deficiency payments. In addition, the government spent
$157 million annually over this period to promote exports. The rice
program has increased the percentage of farmers' income derived from
government support. Government payments as a percentage of producers'
total rice revenues nearly doubled, from an average of 27 percent in
1982-84 to 50 percent in 1992. Without the program, some producers would
probably go out of business. However, with the program, producers
receive rice revenues that, on average, exceed the amount needed to stay
in business over the long term. Moreover, although all rice producers
benefitted from the program, the benefits were concentrated. For the
1990 crop year, 15 percent of the rice farms received 52 percent of the
deficiency payments. Despite federal efforts to boost U.S. exports, the
U.S. share of the world rice market dropped from 24 percent in 1980 to
15 percent in 1992. This decline occurred because Thailand began
exporting rice of comparable quality at a lower price, some countries
lowered their rice imports, and U.S. exports were limited by increased
domestic consumption and supply restrictions on the U.S. rice program.

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

 REPORTNUM:  RCED-94-88
     TITLE:  Rice Program: Government Support Needs to Be Reassessed
      DATE:  05/26/94
   SUBJECT:  Agricultural production
             Farm subsidies
             Grain and grain products
             Farm income stabilization programs
             International trade
             Exporting
             Commodity marketing
             Cost control
             Agricultural programs
             Microeconomic analysis
IDENTIFIER:  USDA Rice Program
             USDA 50/92 Program
             USDA 50/85 Program
             China
             Thailand
             Vietnam
             European Community
             Arkansas
             California
             Louisiana
             Texas
             Mississippi
             Missouri
             USDA Acreage Reduction Program
             USDA GSM-102 Program
             USDA GSM-103 Program
             USDA Foreign Market Development Program
             USDA Market Promotion Program
             USDA Export Enhancement Program
             USDA Targeted Export Assistance Program
             USDA Flex Acres Program
             Japan
             South Korea
             North American Free Trade Agreement
             NAFTA
             
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