Farm Payments

Evaluation of Changes in County Loan Rates Gao ID: RCED-89-47BR February 15, 1989

In response to a congressional request, GAO examined selected aspects of the Department of Agriculture's (USDA) county loan program, specifically to determine: (1) why USDA changed its loan rate calculation procedures for the individual counties; and (2) whether the changes resulted in reasonable and justifiable loan rates.

GAO found that USDA revised its county loan rate procedures to: (1) update commodity price relationships among counties; and (2) ensure consistency in price relationships between its loan program and its commodity certificates. GAO believes that: (1) USDA reasonably changed loan calculation procedures in response to changes in county commodity prices; (2) the procedural changes were not entirely responsible for the 1986 and 1987 changes to the county loan rates; and (3) the price relationships USDA used to calculate county loan rates might not reflect true current market prices and the differences in county commodity prices.



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