Water Subsidies

Pursuant to a congressional request, GAO determined whether the Bureau of Reclamation's sale of a ranch to a private company was an example of a large farming operation continuing to receive federally subsidized water on its entire acreage.

GAO found that: (1) since the Reclamation Reform Act of 1982 did not preclude multiple landholdings from being operated collectively under a trust as one farm while qualifying individually for federal subsidized water, the seller reorganized the ranch, with the individual landholdings eligible to receive federally subsidized water; (2) its criteria suggested that the buyer's acreage was one farming operation; (3) companies did not implement the act's acreage limit in a manner consistent with congressional expectations; (4) after the act's passage, companies reorganized their large farms to receive subsidized water on acreage that would have otherwise exceeded the mandated limit; and (5) by amending the act, Congress could prevent such operations from receiving subsidized water on land in excess of the 960-acre limit.