Farm Programs: Service to Farmers Will Likely Change as Farm Service
Agency Continues to Reduce Staff and Close Offices (Letter Report,
05/01/1998, GAO/RCED-98-136).

Staff cuts and office closures at the Farm Service Agency, a lending
agency within the Department of Agriculture, do not appear to have
affected the quality of service provided to farmers so far. GAO found
that most farmers are highly satisfied with the service they receive
from their local office of the Farm Service Agency. Farmers generally
continue to receive prompt service when they walk into their county
office and have the Farm Service Agency staff complete most of their
required paperwork. If staff reductions at the Farm Service Agency
continue and county offices are closed, however, the traditional level
of service provided to farmers is likely to decline. Farmers will have
to accept greater responsibility for program requirements, including
completing paperwork, with less help from agency staff. However, this
change is consistent with changes in the 1996 Federal Agriculture
Improvement and Reform Act, which reduce federal controls over
production and places more responsibility on farmers for planting and
marketing decisions.

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

 REPORTNUM:  RCED-98-136
     TITLE:  Farm Programs: Service to Farmers Will Likely Change as
	     Farm Service Agency Continues to Reduce Staff and
	     Close Offices
      DATE:  05/01/1998
   SUBJECT:  Agricultural programs
	     Reductions in force
	     Federal downsizing
	     Locally administered programs
	     Customer service
	     Federal agency reorganization
	     Human resources utilization
	     Reporting requirements
IDENTIFIER:  USDA Conservation Reserve Program

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GAO/RCED-98-136

Cover
================================================================ COVER

Report to the Honorable
Gil Gutknecht, House of Representatives

May 1998

FARM PROGRAMS - SERVICE TO FARMERS
WILL LIKELY CHANGE AS FARM SERVICE
AGENCY CONTINUES TO REDUCE STAFF
AND CLOSE OFFICES

GAO/RCED-98-136

Quality of Service to Farmers

(150074)

Abbreviations
=============================================================== ABBREV

  USDA -
  FSA -

Letter
=============================================================== LETTER

B-279518

May 1, 1998

The Honorable Gil Gutknecht
House of Representatives

Dear Mr.  Gutknecht:

For more than 60 years, farmers have relied on their local U.S.
Department of Agriculture (USDA) county office to provide them with
personalized advice and assistance with federal agriculture programs.
However, since 1994, USDA's Farm Service Agency (FSA)--the primary
agency charged with administering farm programs at the local
level--has reduced its staff by about 15 percent and closed more than
300 offices.  In addition, USDA's 1998 budget proposal included an
additional reduction of 5,000 staff, or over 50 percent of the
current staffing level, and 500 more office closings by fiscal year
2002.

You asked us to examine the impact of actual and proposed staff
reductions and office closings by FSA on the quality of service to
farmers.  To address this issue, we reviewed USDA's 1997 National
Customer Service Survey of farmers, conducted phone discussions with
farmers, and spoke with agency officials.

   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

The Farm Service Agency's staff reductions and office closures to
date do not appear to have affected the quality of service provided
to farmers.  According to the U.S.  Department of Agriculture's 1997
customer survey and our recent discussions with farmers and Farm
Service Agency officials, most farmers are highly satisfied with the
service they receive from their local office of the Farm Service
Agency.  Farmers are still generally able to receive prompt service
when they walk into their county office and have the Farm Service
Agency staff complete most of their required paperwork.  If the Farm
Service Agency's staffing continues to be reduced and county offices
are closed, however, the traditional level of service provided to
farmers is likely to decrease.  Among other things, farmers will be
required to accept greater responsibility for program requirements,
including completing paperwork, with less assistance from agency
staff.  However, this change is consistent with changes in the 1996
Federal Agriculture Improvement and Reform Act, which reduces federal
controls over production and places more responsibility on farmers
for planting and marketing decisions.

   BACKGROUND
------------------------------------------------------------ Letter :2

Historically, most farm programs have been implemented at the county
office level.  The current county-based delivery structure originated
in the 1930s, when the first agricultural acts established farm
support programs.  At that time, more than one-fourth of all
Americans engaged in farming, and the lack of an extensive
communication and transportation network limited the geographic
boundaries that could be effectively served by a single field office.
In addition, most farm programs required farmers to visit the local
office to learn about and sign up for these programs.\1 FSA staff
assisted farmers in completing the administrative requirements,
including the necessary paperwork, associated with the programs.

Over the last 60 years, the number of farms in the United States has
declined significantly, as has the number of people engaged in
farming.  Improvements in communication and transportation in rural
areas have mitigated some of the problems associated with large
distances between farmers and program resources.  Additionally, two
recent legislative changes have significantly affected USDA's
delivery of farm programs.  The Federal Crop Insurance Reform and
Department of Agriculture Reorganization Act of 1994 (P.L.  103-354,
Oct.  13, 1994) directed the Secretary of Agriculture to streamline
and reorganize USDA to achieve greater efficiency, effectiveness, and
economies in its organization and management of programs and
activities.  In addition, the Federal Agriculture Improvement and
Reform Act of 1996 (P.L.  104-127, Apr.  4, 1996) fundamentally
changed the federal government's role in supporting production
agriculture by replacing traditional commodity programs and reducing
many of the administrative requirements related to the remaining
agriculture programs.\2 Prior to the 1996 act, farmers participating
in federal commodity programs were restricted to planting certain
types and amounts of crops.  Following the 1996 act, farmers are
expected to plant and market crops by considering market conditions
rather than by relying on government programs.

As a result of the 1994 act, USDA has closed more than 300 offices,
or about 14 percent of the 2,773 offices that were operating at the
end of 1994.  These closures required the farmers served by those
offices to travel to a neighboring county for assistance.  In
addition to these office closings, USDA reduced FSA's nonfederal
staff from 13,432 in 1995 to 11,399 in 1997, a reduction of 2,033
employees, or about 15 percent.  According to the 1998 budget
proposal, USDA is scheduled to close 500 additional offices and
reduce FSA's county office staff by an additional 57 percent, from
11,399 employees in 1997 to 4,879 by 2002.\3

The proposal's estimated savings would total more than $1 billion for
the 6 years through 2002.  To date, USDA's reductions in county
office staff have been achieved primarily by reducing the staff at
larger county offices and by closing or consolidating smaller county
offices (those with three or fewer employees).

Furthermore, USDA is undertaking an effort to streamline its
administrative activities at the state and national level, which may
affect the quality of service farmers receive.  In December 1997, the
Secretary of Agriculture approved a plan that will consolidate a
number of administrative activities at headquarters and in state
offices.  The plan establishes a Support Services Bureau in
headquarters and one state administrative support unit in each state.
This organization will provide administrative services--including
financial management, human resources, services supporting civil
rights, information technology, and management services (including
procurement)--to field-based agencies.

USDA also has contracted for an independent study to examine FSA, the
Natural Resources Conservation Service, and the Rural Development
mission area for opportunities to improve overall customer service
and the efficiency of the delivery system.  The results of this
study, expected to be completed in October 1998, will be incorporated
into the future iterations of FSA's strategic plan.

--------------------
\1 FSA administers a range of farm programs:  farm loan programs;
conservation programs such as the Conservation Reserve Program; and
7-year production flexibility contracts, which replaced the commodity
programs for wheat, feed grains, cotton, and rice.

\2 Farm Programs:  Administrative Requirements Reduced and Further
Program Delivery Changes Possible (GAO/RCED-98-98, Apr.  20, 1998).

\3 The 11,399 FSA employees do not include 2,220 former Farmers Home
Administration employees who were assigned to FSA's county offices to
help administer agricultural credit programs.

   REDUCTIONS TO DATE HAVE NOT
   AFFECTED MOST FARMERS' POSITIVE
   VIEWS OF FSA'S SERVICE
------------------------------------------------------------ Letter :3

Despite recent office closings and staff reductions, most farmers
continue to be very satisfied with the quality of service they have
been receiving from USDA, according to a USDA survey and our
discussions with farmers.

In USDA's 1997 national survey, 90 percent of the more than 4,000
respondents said that they were very satisfied with the service they
received from their county office and that local staff were
responsive to their needs, provided reliable service, and showed
empathy towards customers when conducting business.\4 In addition,
the participants said that "personalized face-to-face service" was
important to them.  In fact, when asked to identify alternative ways
of doing business with the county office, such as by computer or
telephone, nearly 60 percent of the farmers said that they did not
want any changes and preferred to continue to conduct most business
in person.

According to all 60 farmers we spoke with by telephone, the quality
of service in late 1997 was the same or better than it was in 1995,
despite staff reductions and office closures.  These farmers lived in
all parts of the nation and had participated in the Conservation
Reserve Program, the farm loan programs, and/or the commodity
programs.  In some cases, these farmers lived in counties in which
their local county office had been closed.  They stated that the
quality of service was high because FSA staff were efficient and
knowledgeable.  One farmer said that service in the county office was
good because the county office employees took the time to become
familiar with each farmer's operation.

Farmers we spoke with were particularly pleased with FSA staff's
performance in the following areas:

  -- Completing paperwork.  FSA staff have historically completed
     most farmers' paperwork for the commodity programs for them.
     FSA staff told us that by completing the paperwork, they reduce
     the possibility of errors that would occur if farmers completed
     the paperwork on their own.  Many farmers we talked to said that
     they like having FSA staff fill out their paperwork because it
     is very complex and they would have difficulty doing it by
     themselves.

  -- Storing and maintaining records.  FSA staff maintain farmers'
     commodity program records because, according to one FSA county
     executive director, many farmers like FSA to keep their
     historical farming records, such as acreage reports, on file in
     case farm programs change and the information is needed to
     establish eligibility for the new programs.

  -- Reminding farmers about key sign-up dates.  FSA uses mail and
     telephone calls to remind farmers of key dates for enrolling in
     a program because officials are concerned that some farmers may
     otherwise forget to sign up.  One farmer said that he
     appreciated receiving postcards from his county office when it
     was time for him to visit the office.  Under the commodity
     programs, for example, FSA staff reminded farmers 15 days prior
     to the ending date of a sign-up period that they had not
     enrolled in the current year's programs.

  -- Providing prompt walk-in service.  At most county offices,
     farmers can visit without an appointment and receive prompt
     service for commodity programs.  This service could range from
     answering simple questions to filling out a farmer's paperwork.
     Farmers like the flexibility of coming into the office when it
     is convenient for them--when the weather is bad, for instance,
     without having to make an appointment.

In commenting on a draft of this report, FSA officials noted that
while the results of USDA's survey and our discussions with farmers
indicate that most farmers are satisfied with the service that they
receive, some are not.  For example, some small and minority farmers
involved in the farm loan programs have criticized USDA recently for
not providing adequate service.  FSA officials stated that they would
like to provide a better level of service for participants in the
farm loan programs, but they lack adequately trained staff.

--------------------
\4 USDA conducted this nationwide survey of over 4,000 farmers in
various farm programs between Feb.  and Apr.  1997.

   ADDITIONAL REDUCTIONS WILL
   LIKELY CHANGE THE LEVEL OF
   SERVICE FSA PROVIDES TO FARMERS
------------------------------------------------------------ Letter :4

As of December 1997, FSA had 2,396 offices and 11,399 county office
employees.  These office and staffing levels reflect the closing of
more than 300 offices and staff reductions of about 15 percent since
December 1994.  If the 1998 budget proposal to further reduce
staffing by an additional 50 percent and to close an additional 500
offices were carried out, FSA would average about two to three
employees per office, in comparison with the current average of about
five.  As we have previously reported, county offices need a minimum
of two staff just to conduct the administrative functions for
maintaining basic office operations, such as obtaining and managing
office space and processing the paperwork for the payroll.\5 As a
result, FSA staff in these smaller offices will have less time to
provide service to farmers than they did when county offices were
staffed more fully.  The proposed staffing reductions will result in
more county office closures than the 500 proposed, according to FSA
officials we interviewed.

As FSA closes offices, farmers will have to travel farther and visit
offices that serve more farmers.  Although they stated that they are
still receiving quality service, some farmers we spoke with whose
county office had recently closed have already experienced the
service impacts associated with these changes.  For example,
according to one farmer--whose current county office is 45 miles away
compared with his former office, which was 10 miles away--the staff
at the new office did not have personal knowledge of his specific
operations, such as the crops he grows, the farming techniques he
uses, and the programs in which he normally participates.

FSA officials recognize that additional staff reductions and office
closings will reduce the level of personalized service to farmers and
require them to accept greater responsibility for program
requirements, including completing paperwork.  At the same time,
officials recognize that the 1996 act places more responsibility on
farmers for planting and marketing decisions.  In this regard, FSA
officials told us that they are beginning to talk with farmers and
the various groups involved in farming about the types of services
FSA should provide in the future.

--------------------
\5 Farm Programs:  Impact of the 1996 Farm Act on County Office
Workload (GAO/RCED-97-214, Aug.  19, 1997).

   AGENCY COMMENTS
------------------------------------------------------------ Letter :5

We met with USDA officials, including the Associate Administrator for
the Farm Service Agency, the Deputy Administrator for Farm Programs,
and the Deputy Administrator for Farm Loan Programs.  USDA generally
agreed with the information presented in the report.  In their
comments, however, the officials noted that the services provided to
farmers vary among the USDA programs.  For example, Farm Service
Agency officials stated that because the staff for the farm loan
programs are not located in each county, these staff are not able to
provide the same level of service that farmers participating in the
traditional commodity programs received, such as having their
paperwork filled out for them.  Furthermore, these officials stated
that some small and minority farmers have recently criticized USDA
for not providing adequate service.  We made changes to the report to
reflect these concerns.  In addition, USDA provided technical and
clarifying comments that we incorporated as appropriate.

   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :6

To determine farmers' opinions of the quality of service FSA provides
in county offices, we reviewed selected aspects of the results of
USDA's National Customer Service Survey of farmers in 1997.
Specifically, we analyzed and summarized responses on (1) the
services that matter the most to farmers and (2) farmers' general
satisfaction with services provided by USDA's service centers.  This
survey included over 4,000 farmers nationwide who participated in
various farm programs.  To verify and update these results, we
obtained a database from USDA of the names, location, and phone
numbers of farmers who had previously completed a USDA customer
service survey.  We judgmentally selected 90 farmers who had
participated in the Conservation Reserve Program, the farm loan
programs, and/or the Acreage Reduction Program in 1995.  We were able
to contact 60 of these farmers across the nation by telephone to
obtain information on the quality of service in FSA county offices in
1997 compared with the quality of service in 1995.  Some of these
farmers lived in counties in which the local county office had been
closed.

We also visited FSA officials at headquarters and FSA state and
county office officials in eight states to discuss the quality of
service farmers currently receive.  The offices we visited were
located in California, Connecticut, Illinois, Massachusetts,
Missouri, Nebraska, North Carolina, and Washington State.  In most of
these county offices, we met with the county executive director,
agricultural credit manager, and farmers from the FSA county
committee.  We also met with the state executive director in six
states and members of the state committee in two states.

We conducted our work from October 1997 through April 1998 in
accordance with generally accepted government auditing standards.

---------------------------------------------------------- Letter :6.1

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 15 days
after the date of this letter.  At that time, we will provide copies
to the House and Senate Committees on Agriculture; other interested
congressional committees; the Secretary of Agriculture; and the
Director of the Office of Management and Budget.  We will also make
copies available to others on request.

Please call me at (202) 512-5138 if you or your staff have any
questions about this report.  Major contributors to this report were
Ronald E.  Maxon, Jr.; Fred Light; Renee D.  McGhee-Lenart; Paul
Pansini; Carol Herrnstadt Shulman; and Janice M.  Turner.

Sincerely yours,

Robert A.  Robinson
Director, Food and
 Agriculture Issues
*** End of document ***