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RCED-84-88 1 (1984-01-17)

handle is hein.gao/gaobabnfv0001 and id is 1 raw text is: 4 *UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 2054 JANUARY 17, 1984 RESOURCES COMMUNITY AND ECONOMIC DEVELOPMENT DIVISION B-21 2726 t* be rl The Honorable Joseph G. Minish RELEASED House of Representatives Dear Mr. Minish: Subject: Feasibility of Providing the Armed Services With Additional Surplus Dairy Commodities Owned by the U.S. Department of Agriculture (GAO/RCED-84-88) In :esponse to your October 7, 1983, request concerning the U.S. Department of Agriculture's (USDA's) surplus dairy inventory, we gathered some preliminary information on the feasibility of providing the bulk of USDA-owned surplus dairy commodities to the Armed Services. We discussed this information with your office and agreed to prepare a brief written summary of the information for your use in determining whether to pursue this matter further. According to the Dairy Division Director of USDA's Agricul- tural Stabilization and Conservation Service, two major issues are involved in providing the Armed Services with greater quantities of surplus products than are currently provided: --The Armed Services' normal needs for dairy products are met by purchasing such products on the open market. Under Section 202(b) of the Agricultural Act of 1949, as amended (7 U.S.C. 1446a(b)), the Armed Services can order dairy products from USDA's Commodity Credit Corporation (CCC) only in quantities which exceed their normal needs. --If the law were revised to eliminate this restriction, providing the Armed Services' normal needs with CCC-owned dairy products would displace their commercial purchases. This would result in increased market surpluses which CCC would have to purchase under its dairy price-support program and add to its dairy surplus inventories. During the past several years, the dairy industry has pro- duced much more milk than can be marketed commercially at estab- lished prices. As a result, CCC's purchases of surplus dairy 1(990516) 123280

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