Water Subsidies
Basic Changes Needed to Avoid Abuse of the 960-Acre Limit Gao ID: RCED-90-6 October 12, 1989Pursuant to a congressional request, GAO reviewed the Bureau of Reclamation's implementation of the Reclamation Reform Act of 1982, which set a 960-acre limit on farm land eligible to receive federally subsidized water for irrigation purposes.
GAO found that, although the act's legislative history clearly showed congressional intent to provide federally subsidized water to a maximum of 960 acres of owned or leased land being operated collectively as one farm, the act: (1) did not actually address leased acreage; (2) used the term landholding instead of the terms farm or farming operation; and (3) did not address whether farmers could operate multiple landholdings as one farm while separately qualifying landholdings for federally subsidized water. GAO also found that: (1) in response to the act, some farmers reorganized their farms into multiple, smaller landholdings that were individually eligible to receive federally subsidized water, although they continued to operate the landholdings collectively as a farm; (2) farmers reorganized their landholdings through partnerships, corporations, and trusts; (3) such landholding reorganizations reduced the federal government's 1987 revenues by $1.3 million; and (4) although Congress amended the act in 1987 to require the Department of the Interior to audit individual or legal entities whose landholdings or farming operations exceeded 960 acres, farmers' reorganizations of their landholdings complied with the regulations.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:
