Wheat Commodity Program

The U.S. Department of Agriculture (USDA) supports wheat farm income mainly through direct payments--technically called deficiency payments because they make up the difference between a target price set by USDA and the amount that producers receive for their wheat. This briefing report examines (1) the program's overall costs, including producers' gains or losses from the program; (2) the distribution of wheat deficiency payments to program participants by counties; (3) the distribution of wheat deficiency payments to program participants by farms; and (4) the distribution of government payments, including wheat deficiency payments, to farms whose wheat production accounted for 50 percent or more of the value of the farms' crop and livestock production.

GAO found that: (1) the wheat commodity program cost the government an average of $2.2 billion annually from 1990 through 1992; (2) wheat producers' economic program benefits averaged 63 percent of total government costs due to idled crop lands; (3) the program cost wheat buyers $32 million annually due to the restricted wheat supply; (4) in 1990, USDA paid over $2.4 billion in wheat deficiency payments; (5) about 85 percent of the deficiency payments went to wheat-producing counties located in the Plains and northwestern states; (6) in general, a county's share of wheat deficiency payments was directly related to its share of wheat acres; (7) about 72 percent of the farms in the program received less than $5,000 each, since wheat was a supplementary crop in their operations; (8) one percent of the farms received more than $50,000 in deficiency payments and one farm received a total of $666,475; and (9) specialized wheat farms received about $782 million in all types of government payments in 1990.