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RCED-85-126 1 (1985-07-29)

handle is hein.gao/gaobabffd0001 and id is 1 raw text is: BY THE COMPTROLLER GENERAL Report To The Congress OF THE UNITED STATES Effects And Administration Of The 1984 Milk Diversion Program The Department of Agriculture's purchases of surplus dairy prod- ucts increased from about $247 million in fiscal year 1979 to about $2.7 billion in fiscal year 1983. To help reduce the dairy surplus and government costs, the Congress in November 1983 authorized a temporary (January 1984 through March 1985) milk diversion pro- gram that was funded primarily from an assessment on milk pro- ducers' sales. Some 38,000 milk producers were paid about $955 million to reduce their milk sales from a base period by 7.5 billion pounds in 1984 and 1.9 billion pounds in the first quarter of 1985. GAO estimates that the program reduced 1984 milk production by about 3.74 billion to 4.11 billion pounds below the level that could otherwise have been expected. Because this milk would likely have been added to the Department's surplus purchases, an estimated $614 million to $664 million in costs were avoided. However, evi- dence suggests that milk production and Agriculture's surplus dairy product purchases will increase now that the program has ended. GAO's survey of milk producers indicates that participants were more likely than nonparticipants to have already reduced their sales before the program's inception, and this was an impor- tant factor in their decisions to participate. GAO presents matters for consideration by the Congress in the event that the program is used in the future. VD S1D 127525 tua 7 GAO/RCED-85-1 26 JULY 29. 1985 7 1C~ou~4~7 5,04c?

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