United States Government Accountability Office

GAO Report to the Committee on Finance, 

U.S. Senate 

TRADE 

ADJUSTMENT 

ASSISTANCE 

New Program for 

Farmers Provides 

Some Assistance, but 

Has Had Limited 

Participation and Low 

Program Expenditures

December 2006 

 

GAO-07-201 
Contents 

Letter 1

Appendix I Briefing slides 7 

Appendix II Cash Payment Formula 45 

Appendix III GAO Contacts and Staff Acknowledgments 47 

Related GAO Products 48 

Tables 

Table 1: Adjustment Assistance Payment Formula 45 

Table 2: Examples of USDA Cash Payments 46 

Figure 

Figure 1: Salmon and Shrimp Producers Received 92 Percent of 

Payment Funds, Fiscal Years 2004 and 2005 4 

Page i GAO-07-201 Trade Adjustment Assistance
Abbreviations 

CSREES Cooperative State Research, Education, and Extension Service 

ERS Economic Research Service 

FAS Foreign Agricultural Service 

FSA Farm Service Agency

PRC Petition Review Committee 

TAA Trade Adjustment Assistance 

USDA United States Department of Agriculture 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 

Page ii GAO-07-201 Trade Adjustment Assistance
United States Government Accountability Office

Washington, DC 20548 

December 18, 2006 

The Honorable Charles E. Grassley 

Chairman 

The Honorable Max Baucus 

Ranking Minority Member 

Committee on Finance 

United States Senate 

The Honorable Max Baucus 

Ranking Minority Member 

Committee on Finance 

United States Senate 

While tens of thousands of manufacturing workers have received services 

through the Trade Adjustment Assistance (TAA) program, until 2002, 

farmers and fishermen impacted by imports did not have access to similar 

assistance. The Trade Act of 2002 (Trade Act) established a new program, 

TAA for Farmers, administered by the U.S. Department of Agriculture 

(USDA) to provide technical assistance, a cash payment of up to $10,000 a 

year, and access to Department of Labor (Labor) training and 

reemployment services for farmers and fishermen who face significant 

price declines due to increased imports. The Trade Act provides for up to 

$90 million each year through fiscal year 2007 for the costs to carry out the 

program. Trade Act programs are due for reauthorization in 2007. 

While tens of thousands of manufacturing workers have received services 

through the Trade Adjustment Assistance (TAA) program, until 2002, 

farmers and fishermen impacted by imports did not have access to similar 

assistance. The Trade Act of 2002 (Trade Act) established a new program, 

TAA for Farmers, administered by the U.S. Department of Agriculture 

(USDA) to provide technical assistance, a cash payment of up to $10,000 a 

year, and access to Department of Labor (Labor) training and 

reemployment services for farmers and fishermen who face significant 

price declines due to increased imports. The Trade Act provides for up to 

$90 million each year through fiscal year 2007 for the costs to carry out the 

program. Trade Act programs are due for reauthorization in 2007. 

To be eligible for benefits, farmers and fishermen—called producers—

must complete a two-part process each year. 1 First, a group of producers 

of a commodity must submit a petition to USDA on behalf of all producers 

in one or more states. The petition must demonstrate that the price of the 

commodity for the most recent marketing year declined by at least 20 

percent from the average price for the previous 5 years and that imports 

contributed importantly to the decline in price. If USDA certifies the 

petition, any producer of that commodity in the region covered by the 

petition may then apply for benefits under the program. Individual 

producers must meet additional conditions to receive cash payments. For 

example, their net farm or fishing income must be less in the petition year 

than it was in the previous year.2

 

To be eligible for benefits, farmers and fishermen—called producers—

must complete a two-part process each year. 1 First, a group of producers 

of a commodity must submit a petition to USDA on behalf of all producers 

in one or more states. The petition must demonstrate that the price of the 

commodity for the most recent marketing year declined by at least 20 

percent from the average price for the previous 5 years and that imports 

contributed importantly to the decline in price. If USDA certifies the 

petition, any producer of that commodity in the region covered by the 

petition may then apply for benefits under the program. Individual 

producers must meet additional conditions to receive cash payments. For 

example, their net farm or fishing income must be less in the petition year 

than it was in the previous year.2

1

Producers include qualified fishermen or owners, operators, landlords, tenants, or

sharecroppers who share in the risk of producing a commodity and are entitled to share in

the crop available for marketing from the farm. 

2

 For recertified petitions, the term “previous year” is the year before the first petition was 

approved. 

Page 1 GAO-07-201 Trade Adjustment Assistance
The TAA for Farmers program was first authorized in 2002, and no 

comprehensive review has been completed to guide reauthorizing the 

program. To help prepare for reauthorization, you asked us to assess the 

status of implementation of the TAA for Farmers program. Specifically, we 

examined: (1) how the USDA promotes the TAA for Farmers program and 

the extent to which the agency has received and certified petitions from 

producers, (2) the extent to which participants have received benefits, 

including technical assistance and cash payments, and (3) what is known 

about the results of the program. To respond to these issues, we 

interviewed USDA program officials involved with implementing TAA for 

Farmers, analyzed USDA program data on petitions, payments, and 

technical assistance from fiscal years 2004-2006, and reviewed the results 

from a 2006 survey of TAA for Farmers participants conducted by 

Washington State University Extension for USDA’s risk management 

education centers.3

 We conducted our work from August 2006 to October 

2006 in accordance with generally accepted government auditing 

standards. 

On October 24, 2006, we briefed your staffs on the results of our work. 

This report formally conveys the information provided during that 

briefing. Appendix I contains the briefing slides.

In summary, we found that, while USDA uses various means to promote 

TAA for Farmers, the numbers of both petition submissions and 

certifications are lower in fiscal year 2006 than they were in 2005. USDA 

officials attribute the decline to the difficulty farmers and fishermen have 

in meeting the eligibility criteria. Out of 101 petitions submitted for the 

program to date, USDA reviewed the 64 that were complete, appropriate

and timely. Of these, 30 petitions were certified and 34 were denied. 

Producers of Concord grapes, lychees, olives, wild blueberries, fresh 

potatoes, Florida avocados, snapdragons, shrimp, salmon, and catfish 

were among those that were certified under the program. The number of 

petitions submitted by producers declined by nearly half from fiscal year

2004 to 2006, while the number of petitions USDA denied more than 

doubled between 2005 and 2006. Most of the petitions that were denied

were up for recertification and no longer met key program eligibility 

criteria. Officials attribute this to two factors—the requirement to 

demonstrate a 20-percent price decline and the requirement to show a 

 3

 USDA’s Cooperative State Research, Education, and Extension Service (CSREES) 

operates the risk management education centers. 

Page 2 GAO-07-201 Trade Adjustment Assistance
further increase in imports for petitions up for recertification. For 

example, in 2006, 14 of the 15 petitions that were denied were up for 

recertification and were not recertified because imports did not increase 

over the previous year’s level. 

While USDA provides technical assistance to producers, the amount of 

cash payments made to producers has been relatively small and, according 

to program officials, some program eligibility criteria may limit their 

participation. To date, about 13,000 producers have received technical 

assistance; USDA has provided about 8,000 cash payments; and few 

producers—estimated at 3 percent or less—have taken advantage of 

Labor’s training and reemployment services. 4, 5

 USDA’s Cooperative State

Research, Education, and Extension Service (CSREES) provides technical 

assistance through various means–in person, online, and through training

materials–to producers nationwide, and has implemented a basic and an 

intensive technical assistance curriculum. The basic curriculum, which is 

mandatory for all certified producers who wish to receive a cash payment,

provides a brief overview of world trade, business improvements 

producers can make, and other resources. The intensive curriculum, 

which was implemented in 2006, is optional, and provides individual oneon-one counseling to help producers develop and implement changes to 

their business. Of those who applied to receive cash payments, two-thirds 

received it. The median cash payment was relatively low: $1,605 in fiscal 

year 2004 and $2,520 in 2005, but fewer payments were made in 2005 

compared to 2004. About 1,000 payments, out of a total of about 8,000 

payments, were at the maximum of $10,000. Salmon and shrimp producers 

received more than 90 percent of all payments in fiscal year 2004 and 2005

(see fig. 1). 

 4

 The estimate of participation in Labor’s reemployment services is based upon the survey

of TAA for Farmers participants conducted by Washington State University Extension for 

USDA’s risk management education centers. Labor does not routinely track this 

information. 

5

 The survey collected information on all producers who applied for benefits in fiscal years 

2004 and 2005, and analyzed the data using commodity-based groups. The estimate of 

3-percent is based on respondents in the majority of groups who reported receiving training

from Labor. Some commodity groups, for example, salmon and shrimp fishermen generally 

reported higher participation.

Page 3 GAO-07-201 Trade Adjustment Assistance
Figure 1: Salmon and Shrimp Producers Received 92 Percent of Payment Funds, 

Fiscal Years 2004 and 2005 

Source: GAO analysis of USDA data.

8%

37% 55%

Others

Shrimp

Salmon

Note: Payments for fiscal years 2004 and 2005 totaled $28,056,454.

Agency officials identified certain criteria in the legislation as factors that 

may affect individual participation. In particular, the net farm income 

test—that requires producers to show that income was less in the petition 

year than the previous year—may disqualify some producers who seek 

cash payments. In addition, the payment formula, which resulted in most 

producers receiving less than $3,000, may also discourage producers from 

participating.6

 Low producer participation and low payments have resulted 

in USDA spending falling far below the $90 million provided for by the 

Trade Act—program spending totaled about $16 million in fiscal year 2004 

and $21 million in 2005. Given the low expenditures, USDA only requests 

about one-third of the $90 million in its annual budget request. 

Producers were generally satisfied with the technical assistance and 

thought applying for the cash payment was worthwhile, according to a 

USDA survey of producers who applied for benefits in fiscal years 2004 

and 2005. Overall, at least half of the respondents found that the basic 

 6

 See appendix II for more information on the payment formula. 

Page 4 GAO-07-201 Trade Adjustment Assistance
technical assistance training was worthwhile, and about a quarter of the 

respondents reported making changes to their business as a result of the 

assistance. Generally, respondents were satisfied with the quality of 

technical information they received on issues such as how to improve the

marketing of their commodity. However, a substantial number of 

respondents reported that the basic curriculum provided inadequate 

information on some topics, such as how to evaluate other commodities as 

substitutions for their own. According to USDA officials, it was the need to 

provide additional assistance tailored to a specific business that resulted 

in the development of the intensive technical assistance curriculum. 

Regarding the cash payment, about 80-percent of respondents said the 

payment was worth the effort of applying, though slightly more than half

of the producers said they experienced some difficulty in applying for and

receiving a cash payment. However, the survey provides no insight into 

why some producers did not apply for benefits at all. 

In conclusion, TAA for Farmers is a new program and we have only an 

early view of how this program is working. While the cash benefits and 

technical assistance appear to assist farmers and fishermen in adjusting to

the effects of import competition on a limited, short-term basis, the cash 

payments are relatively low and must be approved each year. 

Furthermore, the criteria for program eligibility are difficult for many 

farmers and fishermen to meet and the low cash payments may discourage

others from applying. As a result, USDA spending for this program is well 

below the amount provided for by the Trade Act. 

We provided a draft of this report to officials at USDA for their technical

review and incorporated their comments where appropriate. 

As arranged with your offices, unless you publicly announce the contents 

of this report earlier, we plan no further distribution of the report until 30 

days from its issue date. At that time, we will send copies of this report to 

the Secretary of Agriculture, relevant congressional committees, and other 

interested parties and will make copies available to others upon request. 

The report will also be available at no charge on GAO’s Web site at 

http://www.gao.gov. 

Page 5 GAO-07-201 Trade Adjustment Assistance
If you or your staff have any questions about this report, please contact me 

at (202) 512-7215. You may also reach me by e-mail at nilsens@gao.gov. 

Key contributors may be found in appendix III.

Sigurd R. Nilsen 

Director, Education, Workforce, and Income Security Issues 

Page 6 GAO-07-201 Trade Adjustment Assistance
Appendix I: Briefing slides Appendix I: Briefing slides 

Trade Adjustment Assistance 

for Farmers

Briefing for Staff of

Senator Charles E. Grassley, Chairman

Senate Committee on Finance 

and

Senator Max Baucus, Ranking Minority Member

Senate Committee on Finance

October 24, 2006

Page 7 GAO-07-201 Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 8 GAO-07-201 

2

Introduction

• Until the Trade Act of 2002, farmers and fishermen1 impacted by 

increased imports typically could not benefit from trade adjustment

assistance (TAA) under the Department of Labor’s (Labor) TAA 

program for various reasons, including:

• Farmers are generally self-employed and rarely qualify for 

unemployment benefits, and thus TAA benefits.

• Agricultural producers are less likely than other workers to want

to be retrained for a new occupation, which was the emphasis

of Labor’s TAA program.

• TAA for Farmers, established in the Trade Act of 2002, provides 

limited, short-term trade adjustment assistance specifically to

farmers and fishermen through fiscal year 2007.

• No comprehensive review of the program is currently available to

guide reauthorization.

1 By regulation, the Department of Agriculture extended benefits to qualified fishermen–-those whose catch is

adversely affected by imported aquaculture products.

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 9 GAO-07-201 

3

Research Objectives

• How does the Department of Agriculture (USDA) promote the 

TAA for Farmers program and to what extent has the agency 

received and certified petitions from producers?

• To what extent have participants received benefits, including 

technical assistance and cash payments?

• What is known about the results of the program?

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 10 GAO-07-201 

4

Scope and Methodology

To address our research objectives, we:

• interviewed USDA program officials and Office of Inspector

General staff;

• analyzed USDA program data on petitions, payments, and 

technical assistance from fiscal years 2004-2006;

• reviewed results from a 2006 survey of TAA for Farmers

participants conducted by Washington State University for 

USDA’s risk management education centers, which develop 

technical assistance for the program; and

• conducted our review from August 2006 to October 2006 in 

accordance with generally accepted government auditing 

standards

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 11 GAO-07-201 

5

TAA for Farmers Legislation

• The TAA Reform Act of 2002 established a new program of 

trade adjustment assistance for farmers, providing technical 

assistance, cash benefits, and access to training and 

reemployment services offered through the Department of 

Labor.

• To be eligible, producers (farmers and fishermen) must 

demonstrate significant price declines (of at least 20 percent) 

as a result of increased imports, and that imports increased

in the year of the petition.

• The statute provides for up to $90 million for each fiscal year, 

from 2003 through 2007, to carry out the program. 

BACKGROUND

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 12 GAO-07-201 

6

Producers Petition for a Commodity to Be 

Eligible for the Program

• In order to receive benefits, a group of producers (three or

more) or their authorized representatives must submit a 

petition to USDA.

• There may be many producers represented under one 

petition. Petitioners may file on behalf of all producers in an

impacted area of one or more states in the United States.

• The petition must include data showing how the price of the 

commodity has declined, justification for why the producers

should be eligible for assistance, and other information.

• Petitions are considered for recertification in subsequent

years.

BACKGROUND

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 13 GAO-07-201 

7

Conditions for Certification

USDA certifies petitions that meet the following criteria:

• Petition must be submitted to USDA between August 15 and 

January 31

• Average price of the commodity in the marketing year2 under 

review must be at least 20 percent less than the average 

price over the past 5 marketing years 

• Imports of like or directly competing products must have 

increased during the petition period 

• Increase in imports must have “contributed importantly” to the 

price decline

BACKGROUND

2 “Marketing year” means the marketing season or year as defined by the National Agriculture Statistic Service, or a

specific period as proposed by the petitioners and certified by the Administrator of the Foreign Agricultural Service. 

Trade Adjustment Assistance
Appendix I: Briefing slides 

8

USDA Agency Roles

•Intra-agency committee that reviews ERS study and

petition and makes recommendation to FAS Administrator

Petition Review 

Committee (PRC)

Economic Research •Conducts market study of each petition 

Service (ERS)

•Provides technical assistance to producers 

Cooperative State 

Research, Education,

and Extension Service 

(CSREES) 

•Assists petitioners in completing applications for cash

payments

•Provides outreach service to petitioners and producers

•Accepts applications and determines producers’ cash

payment eligibility

•Makes payments to all eligible producers

Farm Service Agency 

(FSA)

•Lead agency for administering the program

•Receives and reviews petitions

•Determines producers’ eligibility to apply for TAA benefits

Foreign Agricultural

Service (FAS) 

USDA Agency Responsibilities for TAA for Farmers

BACKGROUND

Page 14 GAO-07-201 Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 15 GAO-07-201 

9

USDA Petition Process

BACKGROUND

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 16 GAO-07-201 

10

Producers of Certified Commodities Must 

Apply to Receive Benefits

• After USDA certifies a petition, producers covered by that

petition must apply to receive the following benefits:

• technical assistance training to improve competitiveness 

and marketability of the adversely affected commodity

and to assess feasibility of substituting a new commodity

• cash payment for those who meet eligibility requirements 

each year

• Producers who are eligible for cash payments may also be 

eligible for career training and reemployment services 

through Labor

BACKGROUND

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 17 GAO-07-201 

11

Producers Must Meet Additional Conditions to

Receive Cash Payments

• Producers include qualified fishermen or owners, operators,

landlords, tenants, or sharecroppers who share in the risk of

producing a commodity and are entitled to share in the catch 

or crop available for marketing

• Producers must provide documentation that:

• Net farm or net fishing income was less than what it was 

in the previous year3

• Average gross revenue was less than $2.5 million for the 

last 3 years

• They received the technical assistance training provided 

by USDA's Cooperative State Research, Education, and 

Extension Service (CSREES)

BACKGROUND

3 For recertified petitions, the term “previous year” is the year before the first petition was approved.

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 18 GAO-07-201 

12

Producers’ Cash Benefits Are Capped

• Each producer can receive no more than $10,000 in TAA 

payments per federal fiscal year.

• Each producer may not receive more than $65,000 a year in 

both TAA payments and countercyclical payments, which are 

another form of federal farm income support for certain 

commodities.

• Payments are based on a standard formula, which replaces a 

portion of the lost income from a price decline. 

BACKGROUND

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 19 GAO-07-201 

13

Payment Application Process

BACKGROUND

Note: Applications that cannot be approved by FSA are sent to the Foreign Agricultural Service for 

disapproval.

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 20 GAO-07-201 

14

USDA Promotes Program through Federal

Register, Local Media, and Other Means

• The Foreign Agricultural Service announces the petition 

process through a Federal Register notice, distributes press

releases in local media and trade publications, and has emailed state secretaries of agriculture to inform them about

the program’s benefits and requirements.

• The Farm Service Agency (FSA) announces certified 

petitions and publicizes the application process through 

notification letters sent to all known producers identified by

the petitioner and FSA county offices, holds town hall

meetings to discuss the program, and if appropriate, 

publishes information in multiple languages.

OBJECTIVE 1: PETITIONS

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 21 GAO-07-201 

15

USDA Has Certified and Denied About the 

Same Number of Petitions to Date

Out of 101 petitions submitted to date, 64 petitions from fiscal years 2004-

2006 were considered complete, appropriate, and timely, and were

accepted for review:

• 30 petitions were certified:

• Half covered shrimp producers in multiple states.

• Others generally covered specialty commodities with small markets

that do not receive benefits from other USDA programs, e.g., Concord 

grapes, lychees, and snapdragons.

• 34 petitions were denied:

• Half were up for recertification for a subsequent year. For example, in 

fiscal year 2006 all 8 shrimp petitions up for recertification were denied 

because they could not demonstrate a further increase in imports.

• The remainder generally did not meet certain other program criteria.

OBJECTIVE 1: PETITIONS

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 22 GAO-07-201 

16

Certified Petitions, Fiscal Years 2004-2006

2004 2005 2006

Catfish (multistate) Concord grapes (PA, NY, OH) Avocados (Florida)

Lychees (Florida) Fresh potatoes (Idaho) Concord grapes (Michigan)

Salmon (Alaska) Lychees (Florida) Concord grapes (Washington)

Salmon (Washington) Olives (California) Snapdragons (Indiana)

Shrimp (Alabama) Salmon (Alaska)

Shrimp (Arizona) Salmon (Washington)

Shrimp (Florida)a Shrimp (Alabama)

Shrimp (Georgia) Shrimp (Arizona)

Shrimp (North Carolina) Shrimp (Georgia)

Shrimp (South Carolina) Shrimp (Louisiana)

Shrimp (Texas) Shrimp (Mississippi)

Wild blueberries (Maine) Shrimp (North Carolina)

Shrimp (South Carolina)

Shrimp (Texas)

OBJECTIVE 1: PETITIONS

a While the first petition submitted on behalf of Florida shrimp producers was denied, USDA certified a revised

petition submitted in the same fiscal year.

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 23 GAO-07-201 

17

Denied Petitions, Fiscal Years 2004-2006

2004 2005 2006

Alfalfa seed (regional) Avocados (Florida) Concord grapes (PA, OH, NY)

Catfish (Michigan) Cabbages (New York) Fresh potatoes (Idaho)

Crawfish (Louisiana) Catfish (multistate) Fresh potatoes (Washington)

Garlic (California) Seed potatoes (Washington) Lychees (Florida)

Longans (Florida) Shrimp (Florida) Olives (California)

Navel oranges (California) Wild blueberries (Maine) Salmon (Alaska)

Olives (California) Salmon (Washington)

Prawns (Kentucky) Shrimp (Alabama)

Rice (national) Shrimp (Arizona)

Salmon (Oregon) Shrimp (Georgia)

Shrimp (Florida) Shrimp (Louisiana)

Shrimp (Mississippi) Shrimp (Mississippi)

York apples (Virginia) Shrimp (North Carolina)

Shrimp (South Carolina)

Shrimp (Texas)

OBJECTIVE 1: PETITIONS

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 24 GAO-07-201 

Petition Submissions Have Declined

OBJECTIVE 1: PETITIONS

Note: The number of certified and denied petitions do not sum to the total number of petitions submitted. Some submitted

petitions are returned without further review if FAS determines that they are not complete, timely, or appropriate. 18

FY 2004-2006 TAA for Farmers petitions

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 25 GAO-07-201 

Many Petitions Were for Recertifications and 

None Were Approved in Fiscal Year 2006

OBJECTIVE 1: PETITIONS

19

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 26 GAO-07-201 

20

Program Criteria Have Limited Producer

Certification, According to USDA Officials

• Petition denials have increased over time because 

commodities often fail to meet the 20-percent price decline

requirement, officials say.

• Recertification is difficult in part because:

• The level of imports in the recertification year must be 

greater than the previous year, and

• Imports must still contribute importantly to the decline in

price.

OBJECTIVE 1: PETITIONS

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 27 GAO-07-201 

21

Producers Received Technical Assistance

Through Various Means

• Over 13,000 producers have received technical assistance.

• USDA provides technical assistance in person, online or 

through training materials. For example: 

• About 230 workshops were provided to Alaska salmon 

producers in a year.

• Catfish producers nationwide had access to online 

training workshops and referrals to other resources.

• USDA’s Cooperative State Research, Education, and 

Extension Service (CSREES) has implemented a basic

(Phase One) and recently introduced an intensive (Phase

Two) technical assistance curriculum.

OBJECTIVE 2: BENEFITS-TECHNICAL ASSISTANCE

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 28 GAO-07-201 

22

Phase One: Basic Technical Assistance 

Curriculum

• Mandatory workshop for all certified producers who wish to

apply for cash benefits, divided into four areas: 

• Overview–informs producers of program and other

assistance available

• Where am I?–includes discussions on world trade 

situation and outlook, evaluating financial viability of the 

business, etc.

• Where do I want to be?–includes discussions on 

production efficiencies, marketing opportunities, and 

alternative enterprises

• How do I get there?–includes brief discussion on

resources available at Phase Two training

OBJECTIVE 2: BENEFITS-TECHNICAL ASSISTANCE

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 29 GAO-07-201 

23

Phase Two: Intensive Technical Assistance

Curriculum

• Optional program available to producers since January 2006 

that provides individual counseling to improve 

competitiveness and profitability, specifically addressing:

• Commodity assessment–provides advice on producing 

a higher quality product, reducing production costs, etc.;

• Assistance analyzing business and options–provides 

resources for producers to develop a financial analysis of 

current business, new marketing plan, etc.; and

• Written technical assistance plan–includes financial

projection of selected alternatives, business and 

marketing plan, and an implementation plan.

OBJECTIVE 2: BENEFITS-TECHNICAL ASSISTANCE

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 30 GAO-07-201 

24

Two-Thirds of Applicants Received Cash 

Payments in Fiscal Years 2004 and 2005

• Producers submitted nearly 12,000 applications for cash

payments for fiscal years 2004 and 2005.

• USDA provided over 8,000 cash payments to producers.

• The median payment for 2004 was $1,605; for 2005, the

median payment was $2,520.

• About 1,000 payments of the maximum of $10,000 were

made, primarily to shrimp and salmon producers. 

OBJECTIVE 2: BENEFITS-CASH PAYMENT

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 31 GAO-07-201 

25

About Half of Cash Payment Denials Were

Attributed to the Net Income Test in FY 2005

• USDA denied over 2,000 applications in fiscal year 20054

• Over 1,000 of the applications were denied because 

producers could not document a decline in net income.

• Other key reasons applications were denied:

• Producers failed to participate in required technical 

assistance training, and 

• Producers could not document that their average gross

revenue was less than $2.5 million over the last 3 

years.

4 No information is available for cash payment applications denied during fiscal year 2004.

OBJECTIVE 2: BENEFITS-CASH PAYMENT

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 32 GAO-07-201 

26

More Than Half of the Payments in Fiscal 

Years 2004 and 2005 Were $3,000 or Less

OBJECTIVE 2: BENEFITS-CASH PAYMENT

Payment distribution for TAA for Farmers program

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 33 GAO-07-201 

27

Salmon and Shrimp Producers Received Most

Payments, in Fiscal Years 2004 and 2005

OBJECTIVE 2: BENEFITS-CASH PAYMENT

Distribution of payments by commodity

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 34 GAO-07-201 

28

Salmon and Shrimp Producers Received 92 

Percent of Payment Funds, FY 2004 and 2005

Note: Others includes olives, lychees, catfish, Concord grapes, potatoes, and blueberries.

OBJECTIVE 2: BENEFITS-CASH PAYMENT

Distribution of monies per commodity

Payments for fiscal years 2004 and 2005 totaled $28,056,454

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 35 GAO-07-201 

29

Lychee and Shrimp Producers Received 

Highest Average Payments, FY 2004 and 2005

OBJECTIVE 2: BENEFITS-CASH PAYMENT

Average payment per commodity

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 36 GAO-07-201 

30

USDA Officials Identified Factors that May 

Affect Individual Participation

• Net farm income test limits cash payment eligibility

• To qualify for payment, unlike other USDA programs, producers 

must show that the entire net farm income was less in the 

petition year than the previous year.

• Officials say this criterion has disqualified producers who may 

have had negative net income 2 years in a row, but whose 

negative income in the second year was less than in the first. 

• USDA officials told us that low payment rates may discourage some

producers from participating

• Payment formula may result in low payments compared to

producers’ lost income from price declines (see app II).

• For example, a grape producer who lost $74 per ton in the 

petition year would receive a benefit of $9.80 per ton.

OBJECTIVE 2: BENEFITS-CASH PAYMENT

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 37 GAO-07-201 

31

Low Participation and Payments Have Led to 

Low USDA Expenditures

• USDA expenditures on technical assistance and cash payments

each fiscal year are far below the $90 million provided for the TAA 

for Farmers program.

• 2004 cash payments: $13.6 million 

• 2004 technical assistance: $1.1 million

• 2005 cash payments: $14.4 million

• 2005 technical assistance: $1.3 million

• Given the low expenditures, USDA only requests about one-third of 

the $90 million in its annual budget request. Unexpended 

appropriations are returned to the Treasury.

OBJECTIVE 2: BENEFITS

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 38 GAO-07-201 

32

Few Producers Have Participated in Labor

Training and Reemployment Services

• Producers approved by USDA for a cash payment under TAA for

Farmers are eligible for Department of Labor training and 

reemployment services. 

• However, producers are not eligible for other Labor benefits, such

as relocation allowances, the Health Coverage Tax Credit, or

Alternative Trade Adjustment Assistance, unless they qualify under

Labor’s TAA criteria.

• According to a 2006 survey, 3 percent or less of respondents in the 

majority of surveyed groups reported receiving training from Labor

although salmon and shrimp fishermen generally reported higher

participation.

OBJECTIVE 2: BENEFITS-LABOR RETRAINING

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 39 GAO-07-201 

33

One Survey of the Program Has Been

Conducted to Date

• USDA’s Western Center for Risk Management Education 

conducted a 2006 survey through the Washington State 

University Extension to obtain the views of producers 

receiving benefits on an array of issues, including technical 

assistance, cash assistance, and Labor training

• The survey included all producers who applied for benefits in 

fiscal years 2004 and 20055 and placed these producers in

16 groups:

• shrimp producers in 8 states;

• salmon producers in 2 states;

• other 6 groups include producers of blueberries, catfish, 

Concord grapes, lychees, olives, and potatoes

OBJECTIVE 3: ASSESSMENTS

5 The survey included all producers except for salmon and shrimp, a sample of the population for these two

commodities was used in the survey.

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 40 GAO-07-201 

34

Survey Limitations

• The number of respondents for some of the groups was small, ranging 

from 902 for one group to as few as 16 for another group

• The number of lychee producers was very small; therefore, we

excluded this group from our analysis of the survey

• Of the 15 remaining groups, a total of 6,413 producers were surveyed

• A total of 2,960 producers (excluding lychee producers) completed the 

survey

• Response rates also were relatively low for some groups, ranging from as 

high as 82 percent for one group to as low as 48 percent for another

• Despite these limitations, however, we feel that the data are of sufficient 

quality that we can provide general information on the survey results

OBJECTIVE 3: ASSESSMENTS

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 41 GAO-07-201 

35

Respondents Generally Satisfied with Quality 

of Information Provided in Phase One

• Generally, 60 to 85 percent of respondents in a majority of the 

groups reported the technical information they received was at least 

somewhat adequate for most topics, such as:

• how to improve the marketing of the producer’s commodity and

• how to increase the value of the producer’s crop.

• However, 20 to 40 percent of respondents in most groups found the 

technical information provided in Phase One not adequate on some 

topics, such as:

• how to evaluate other commodities that might be substitutions

for their current commodity and

• how to identify a creative or innovative strategy for improving 

the producer’s business.

OBJECTIVE 3: ASSESSMENTS

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 42 GAO-07-201 

36

Most Found Technical Assistance Worthwhile, 

but Fewer Made Business Changes

Of the 15 groups of producers we used in our analysis:

• At least half of the respondents in most groups found the Phase 

One technical assistance mostly or very worthwhile, although 10 to

20 percent of respondents in most groups found it not worthwhile.

• Around a quarter of the respondents in all groups reported making 

changes to their business as a result of Phase One TAA technical

assistance training, while roughly three-quarters reported they

made no changes.

• For almost all groups, a quarter to half of the respondents were

interested in more intensive business management assistance.

OBJECTIVE 3: ASSESSMENTS

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 43 GAO-07-201 

37

Most Respondents Said Cash Payment Worth 

Effort to Apply, Despite Some Difficulties

• In most groups, over half of the producers experienced some

difficulty in applying for and receiving the cash payment.

• At least 80 percent of respondents in most groups who pursued the 

payment said the benefit was worth the effort to apply.

• Over 20 percent of respondents in most groups who received cash

payments reported using the payments to make changes to their 

businesses.

• However, since only producers who applied for benefits were

included in the survey, findings do not provide insight into reasons

other producers did not apply.

OBJECTIVE 3: ASSESSMENTS

Trade Adjustment Assistance
Appendix I: Briefing slides 

Page 44 GAO-07-201 

38

Concluding Observations

• TAA for Farmers is a new program, and we have only an 

early view of how this program is working.

• Current program structure appears to assist producers in 

adjusting to the effects of import competition on a limited, 

short-term basis. However, aspects of the program may limit 

participation.

• To date, the number of petitions certified and median cash 

payments remain low. As a result, USDA annual spending is 

well below the amount provided for by the Trade Act of 2002. 

Trade Adjustment Assistance
Appendix II: Cash Payment Formula Appendix II: Cash Payment Formula 

A cash payment is one of three benefits producers may receive through the

TAA for Farmers program. Each eligible producer may receive a cash 

payment of up to $10,000 each federal fiscal year. 

The amount of money a producer receives is based on how much of the 

commodity he or she produced and how steeply the national price fell 

from the previous 5 marketing years.1

 One program requirement is that the

price declines at least 20 percent as a result of imports of a like or directly 

competing commodity. 

Specifically, payments are calculated on the basis of the following 

formula: 

Table 1: Adjustment Assistance Payment Formula 

Total units of the 

commodity produced

Multiplied 

by (X) 

Half of the difference between 80 percent of the 

average national price of the commodity for the 5 

previous years and the national average price for 

the most recent year 

# Units X [(Ave. price for 5 years x 80%) – current price]

2 

Source: GAO analysis of adjustment assistance payment formula. 

Table 2 gives some examples of how cash payments for several 

commodities may be calculated and how the payments compare to the 

price decline. 

 1 For petition recertification USDA uses the average of the 5 years in the original petition. 

For example, the Alaska salmon 2005 petition used the 5-year average of years 1997-2001. 

In addition, the “marketing year” means the marketing season or year as defined by the

National Agriculture Statistic Service, or a specific period as proposed by the petitioners 

and certified by the Administrator of the Foreign Agricultural Service. 

Page 45 GAO-07-201 Trade Adjustment Assistance
Appendix II: Cash Payment Formula 

Table 2: Examples of USDA Cash Payments 

Commodity 

Total units 

produced

Multiplied by 

(X) 

Half of the difference in

prices = Total payment Price decline 

Concord grapes 100 tons X [($272 x 80%) – $198]

2 

= $980.00

($9.80 per ton)

$74.00 per ton 

Lychees 10,000 pounds X [($2.61 x 80%) — $0.98]

2 

= $5,540.00

($0.554 per pound) 

$1.63 per pound 

Alaska salmon 95,000 pounds X [($0.403 x 80% — $0.261)]

2 

= $2,916.50

($0.0307 per pound) 

$0.142 per pound 

California olives 100 tons X [($598 x 80% — $432)]

2 

= $2,320.00

($23.20 per ton)

$166.00 per ton 

Source: GAO analysis of USDA payment rates. 

Page 46 GAO-07-201 Trade Adjustment Assistance
Appendix III: GAO

A

 Contacts and Staff 

cknowledgments 

Page 47 GAO-07-201 

Appendix III: GAO Contacts and Staff 

Acknowledgments 

Sigurd R. Nilsen (202) 512-7215, nilsens@gao.gov

Dianne Blank, Assistant Director 

Kate Blumenreich, Analyst-in-Charge 

Guisseli Reyes-Turnell made significant contributions to the report in all 

aspects of the work. In addition, Amy Sweet served as team member; 

Wayne Sylvia served as technical advisor; David Dornisch advised on 

methodology issues; Rachael Valliere advised on report preparation; and 

Jessica Botsford advised on legal issues. Arthur Merriam verified our 

findings.

GAO Contact 

Staff 

Acknowledgments 

Trade Adjustment Assistance
Related GAO Products Related GAO Products 

Trade Adjustment Assistance: Labor Should Take Action to Ensure 

Performance Data Are Complete, Accurate, and Accessible. GAO-06-496. 

Washington, D.C.: April 25, 2006. 

Trade Adjustment Assistance: Most Workers in Five Layoffs Received 

Services, but Better Outreach Needed on New Benefit. GAO-06-43. 

Washington, D.C.: January 31, 2006. 

Federal Programs with a Financial Eligibility Component. 

GAO-06-292R. Washington, D.C.: December 14, 2005. 

Health Coverage Tax Credit: Simplified and More Timely Enrollment 

Process Could Increase Participation. GAO-04-1029. Washington, D.C.: 

September 30, 2004. 

Trade Adjustment Assistance: Reforms Have Accelerated Training 

Enrollment, but Implementation Challenges Remain. GAO-04-1012. 

Washington, D.C.: September 22, 2004. 

(130622) Page 48 GAO-07-201 Trade Adjustment Assistance
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