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RCED-00-173R 1 (2000-06-15)

handle is hein.gao/gaobaalpb0001 and id is 1 raw text is: I GAO Accountability * Integrity * Reliability United States General Accounting Office Resources, Community, and Washington, DC 20548 Economic Development Division B-285338 June 15, 2000 The Honorable John R. Kasich Chairman, Committee on the Budget House of Representatives Subject: Food and Commodities: Federal Purchases and Major Regulations That Potentially Affect Prices Paid Dear Mr. Chairman: Each year the federal government purchases a large volume of food and commodities for its domestic, international, and military programs. These purchases are made for diverse purposes, such as supporting commodity prices in domestic markets, providing nutritious meals for children, supplying humanitarian food aid, and feeding U.S. military personnel worldwide. Federal agencies make purchases through various means and at various levels in the marketplace. Bulk commodities, such as unprocessed grain, are procured directly from producers or processors through competitive bidding and commodity support programs. Food, such as ground beef, fruit products, and infant formula, may be purchased directly for specific items or, as is often the case, under contracts with vendors for broad categories of items that a program or facility may need. The prices federal agencies pay for these purchases are influenced by general market conditions that are also applicable to other consumers of food and commodities. Among the many conditions affecting the prices at each level of the food distribution chain-from the farm gate to the dinner table-are federal regulations. The regulations are issued for a variety of purposes, such as implementing agricultural programs, regulating agricultural production, ensuring food safety, and protecting the environment. Concerned about the impact of federal regulations on the prices of food and commodities that the federal government purchases, you requested that we provide (1) details about federal agencies' purchases of food and/or agricultural commodities from fiscal year 1997 through fiscal year 1999 and (2) information on major regulations that may affect the prices paid by these agencies for these products. To respond to the first objective, as agreed with your office, we identified federal agencies that individually purchased at least $50 million in food and/or commodities annually. To address the second objective, we agreed to review the cost-benefit analyses for major regulations issued during the last 4 years-March 29, 1996 through March 31, 2000-that relate to food or agriculture. These analyses are required by Executive Order 12866.' Under this order, an agency must conduct an economic analysis of a regulation determined to be economically significant.2 The analysis should estimate the costs and benefits of the proposed regulation to consumers and/or 'Regulatory Planning and Review, Sept. 30, 1993. 2In general, an economically significant or major regulation is one estimated to have an annual effect on the economy of $100 million or more. GAO/RCED-00-173R Regulations' Effect on Food Prices

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