GAO/RCED-00-173R Regulations’ Effect on Food Prices

United States General Accounting Office

Washington, DC 20548

Resources, Community, and

Economic Development Division

B-285338

June 15, 2000

The Honorable John R. Kasich

Chairman, Committee on the Budget

House of Representatives

Subject: Food and Commodities: Federal Purchases and Major Regulations That Potentially Affect

Prices Paid

Dear Mr. Chairman:

Each year the federal government purchases a large volume of food and commodities for its

domestic, international, and military programs. These purchases are made for diverse purposes,

such as supporting commodity prices in domestic markets, providing nutritious meals for children,

supplying humanitarian food aid, and feeding U.S. military personnel worldwide. Federal agencies

make purchases through various means and at various levels in the marketplace. Bulk commodities,

such as unprocessed grain, are procured directly from producers or processors through competitive

bidding and commodity support programs. Food, such as ground beef, fruit products, and infant

formula, may be purchased directly for specific items or, as is often the case, under contracts with

vendors for broad categories of items that a program or facility may need. The prices federal

agencies pay for these purchases are influenced by general market conditions that are also

applicable to other consumers of food and commodities. Among the many conditions affecting the

prices at each level of the food distribution chain—from the farm gate to the dinner table—are

federal regulations. The regulations are issued for a variety of purposes, such as implementing

agricultural programs, regulating agricultural production, ensuring food safety, and protecting the

environment.

Concerned about the impact of federal regulations on the prices of food and commodities that the

federal government purchases, you requested that we provide (1) details about federal agencies’

purchases of food and/or agricultural commodities from fiscal year 1997 through fiscal year 1999

and (2) information on major regulations that may affect the prices paid by these agencies for these

products. To respond to the first objective, as agreed with your office, we identified federal

agencies that individually purchased at least $50 million in food and/or commodities annually. To

address the second objective, we agreed to review the cost-benefit analyses for major regulations

issued during the last 4 years—March 29, 1996 through March 31, 2000—that relate to food or

agriculture. These analyses are required by Executive Order 12866.1

Under this order, an agency

must conduct an economic analysis of a regulation determined to be economically significant.2

The

analysis should estimate the costs and benefits of the proposed regulation to consumers and/or

1

Regulatory Planning and Review, Sept. 30, 1993. 2

In general, an economically significant or major regulation is one estimated to have an annual effect on the economy of $100 million or

more.
B-285338

2 GAO/RCED-00-173R Regulations’ Effect on Food Prices

other sectors of the economy. While the Office of Management and Budget’s (OMB) guidance on

economic analysis indicates that estimates of costs and benefits in terms of dollars are preferred,

OMB recognizes such estimates may not always be possible. Estimates of the impact of proposed

regulations on prices may or may not be presented in the economic analyses because the focus of

the executive order is on presenting the overall costs and benefits of the regulations.

In summary, we found the following:

• Five agencies—the departments of Agriculture, Defense, Justice, Labor, and Veterans Affairs—

made large direct purchases of food and/or commodities from fiscal year 1997 through fiscal

year 1999, as indicated in figure 1. For example, purchases by these agencies totaled about $4.5

billion in fiscal year 1999 for items ranging from bulk, unprocessed commodities such as grain

and soybean meal to ready-to-eat cereal, canned goods, fruits and vegetables, dairy products,

and military field rations. These purchases were made for agency programs or for basic missionrelated objectives. For example, Agriculture purchased food to feed children under the National

School Lunch Program, and Veterans Affairs purchased food for the patients in its 172 medical

facilities. In addition, some of these agencies made food or commodity purchases on behalf of

other agencies. For example, Agriculture made purchases on behalf of the Department of State’s

Agency for International Development and Defense made purchases on behalf of over 20 other

agencies. Enclosure I provides further details on these purchases.
B-285338

3 GAO/RCED-00-173R Regulations’ Effect on Food Prices

Figure 1: Federal Agency Purchases of Food and/or Commodities, Fiscal Years 1997-99

Agriculture Defense Justice Labor Veterans

Affairs

0

500

1000

1500

2000

2500

3000

3500

U.S. dollars in millions

FY 1997 FY 1998 FY 1999

Note: Agriculture officials said that their food purchases increased significantly from 1998 to 1999, primarily because of the Farm Service

Agency’s procurement of surplus domestic commodities such as bulgur, corn, cornmeal, dried milk, flour, and wheat under the Section

416(b) program for the Foreign Agricultural Service to donate overseas.

Source: GAO’s analysis of agencies’ data.

• Of the 23 major regulations we identified as potentially related to food or agriculture, 11 had

impacts on food and/or commodity prices, according to the required cost-benefit analyses. The

Department of Agriculture issued all 11 of these regulations. The anticipated price effects of

these regulations vary depending on the regulation and the food or commodity involved. For

example, of the 11 analyses, 4 expect price increases, 1 expects both an increase and a decrease,

2 expect prices to be unchanged, and 4 expect prices to decrease. In most cases, the effects

identified in the analyses were on prices that producers or processors could expect to pay or

receive for food or commodities before the products are sold at the retail level. For instance, a

regulation setting long-term policy for Agriculture’s Conservation Reserve Program was

expected to increase processors’ per-bushel prices of barley, corn, oats, sorghum, soybeans, and

wheat. However, in some cases, the analyses discussed effects on the retail prices of food or

commodities. For example, a regulation on importing fresh pork products from Mexico was

expected to decrease the retail price of those products by 7 to 16 cents per pound. Enclosure II

provides further details on the anticipated price impacts of these 11 regulations.

• The 12 regulations and related cost-benefit analyses that did not provide information on food

or commodity price impacts were issued by Agriculture, the Environmental Protection

Agency, or the Food and Drug Administration. Enclosure III provides a list of these

regulations.
B-285338

4 GAO/RCED-00-173R Regulations’ Effect on Food Prices

• In general, each of the 23 major regulations we reviewed was issued by agencies to

accomplish purposes and programs mandated by the Congress in order to benefit the nation.

For example, a 1996 rule on hazard analysis and critical control point systems issued by

Agriculture’s Food Safety and Inspection Service establishes requirements for

slaughterhouses to reduce the numbers of pathogenic microorganisms on meat and poultry

products. As a result of this regulation, the economy is expected to receive benefits

estimated at $7.1 to $26.6 billion over 20 years due to a reduction in foodborne illnesses.3

Agency Comments

We provided a draft of this report to the departments of Agriculture, Defense, Justice, Labor and

Veterans Affairs for review and comment. The agencies generally agreed with the facts presented in

the report. Four of the agencies—Agriculture, Justice, Labor, and Veterans Affairs—provided minor

technical suggestions, which we incorporated into the report as appropriate.

Scope and Methodology

To provide details about federal agencies’ purchases of food and/or commodities, we first identified

agencies with at least $50 million in food and/or commodity purchases in fiscal year 1999. We did

this by reviewing available reports and documents; interviewing Department of Agriculture officials,

including food procurement experts and Economic Research Service staff; and asking officials in

each agency we contacted to identify other agencies that purchase food and/or commodities. We

then asked the agencies identified to provide detailed information on the amounts, types, purposes,

and beneficiaries of their food and/or commodity purchases, including outlays made for these

purchases from fiscal year 1997 through fiscal year 1999. We instructed these agencies to exclude

programs, such as Food Stamps, that provide resources to clients to make their own food purchases.

We also asked these agencies to exclude food purchases intended for retail sale in cafeterias or

commissaries.

To identify major federal regulations that affect the prices paid by federal agencies for food and/or

commodities, we considered 241 major regulations issued during the period from March 1996

through March 2000 that were submitted to GAO’s Office of General Counsel for review in

accordance with provisions of the Small Business Regulatory Enforcement Fairness Act of 1996.4

Of

these, we determined that 23 potentially relate to food or agriculture. For each of these 23

regulations, we then performed a detailed review of the regulation and the related cost-benefit

analysis to determine what, if any, food and/or commodity price impacts were identified. Our

analysis was limited to the information published in the regulations and associated analyses.

Although the cost-benefit analyses for a number of these regulations do not address food and/or

commodity price effects, this does not necessarily mean that the regulations have no effect on these

prices. Rather, these effects were not among those analyzed by the agencies responsible for

preparing the analyses.

We conducted our review from December 1999 through June 2000 in accordance with generally

accepted government auditing standards. We did not independently verify the data provided by the

3

This range of benefits results from uncertainty in the estimates of the number of cases of foodborne illness and death attributable to

pathogens that enter the meat and poultry supply at slaughterhouses.

4

P.L. 104-121, Mar. 29,1996. Under this act, GAO’s role is to provide the Congress with a quick review of all “major” rules submitted to

determine if the promulgating agencies have complied with the procedural steps governing the regulatory process. GAO must provide its

report within 15 calendar days. See GAO’s testimony before the Subcommittee on Commercial and Administrative Law, House Committee

on the Judiciary, (Congressional Review Act GAO/T-OGC-97-29, Mar. 6, 1997) for further explanation.
B-285338

5 GAO/RCED-00-173R Regulations’ Effect on Food Prices

agencies on their food and/or commodity purchases. Similarly, we did not independently verify the

data contained in the cost-benefit analyses we reviewed, nor did we assess the appropriateness of

the variables or assumptions used in these analyses.

-----

As agreed with your office, unless you publicly announce its contents earlier, we plan no further

distribution of this report until 30 days after the date of this letter. At that time, we will provide

copies to the appropriate congressional committees; interested Members of Congress; the

Honorable Dan Glickman, Secretary of Agriculture; the Honorable William S. Cohen, Secretary of

Defense; the Honorable Janet Reno, Attorney General; the Honorable Alexis M. Herman, Secretary

of Labor; the Honorable Togo D. West, Jr., Secretary of Veterans Affairs; the Honorable Jacob J.

Lew, Director, Office of Management and Budget; and other interested parties.

If you have any questions about this report, please contact Jim Jones, Assistant Director, or me at

(202) 512-5138. Other key contributors to this report were Triana Bash, Carol Bray, John Scott, and

Sheldon Wood.

Sincerely yours,

Lawrence J. Dyckman

Director, Food and

Agriculture Issues
ENCLOSURE I 

6 GAO/RCED-00-173R Regulation

Five Federal Agencies That Directly Purchase Food or Commodities

Dollars in millionsPurchasing agency5

Administeringagency Program Description Type of food

FY 199purcha

Department ofAgriculture, FarmService Agency(FSA)6

Food andNutritionService

NationalSchool LunchProgram/NationalSchool LunchAct of 1946

Food and Nutrition Service coordinates thedistribution of commodity foods to over94,000 public and private nonprofit schoolsproviding meals to students. FSA’scommodity purchases represent about 15 to20 percent of the market value of the foodthat schools serve in their lunch andbreakfast programs.

Dairy products, corn, cereal,pasta, peanuts, rice, flour,vegetable oil

$1

Food andNutritionService

TheEmergencyFoodAssistanceProgram/TheEmergencyFoodAssistanceAct of 1983

Commodities are available to nonprofitorganizations, such as soup kitchens andshelters, for preparing meals for the needy.Other nonprofit organizations, such as foodbanks, distribute commodities to the needyfor household use. Each state establisheseligibility criteria for determiningparticipation in the program.

Dairy products, corn, cereal,pasta, peanuts, rice,vegetable oil

Food andNutritionService

Child Careand AdultCare FoodProgram

Commodities are available to approved daycare centers serving meals and snacks tochildren and adults, and to family and groupday care homes for children. These centersand homes have the option of receivingcash in lieu of commodities, since thecommodity pack sizes are too large formost of them.

Dairy products, cereal, pasta,peanuts, rice, flour,vegetable oil

5The five federal departments listed in this column purchased at least $50 million in food or commodities in fiscal year 1999.6The Farm Service Agency makes some of its purchases on behalf of the Commodity Credit Corporation (CCC), which is a government-owned and -ope

stabilize, support, and protect farm income and prices.
ENCLOSURE I 

7 GAO/RCED-00-173R RegulationPurchasing agency5

Administeringagency Program Description Type of food

FY 199purcha

Food andNutritionService

CommoditySupplementalFoodProgram

Food packages are distributed monthly tosupplement the nutritional needs of lowincome pregnant, postpartum, and breastfeeding women; infants; children up to age6; and persons at least 60 years oldresiding in the service areas. A variety ofcommodities are provided in household-sizecontainers. Women, infants, and childrenmust be eligible for benefits under anexisting federal, state, or local health orwelfare program for low-income persons.Elderly persons must have incomes at orbelow 130 percent of federal povertyincome guidelines.

Dairy products, corn, cereal,pasta, peanuts, rice

Food andNutritionService

SummerFood ServiceProgram

Commodities are made available to sitesserving needy children during summervacations from school. These sites includeschools, colleges, and universitiesparticipating in the National Youth SportsProgram, nonprofit summer camps formigrant children, and centers for homelesschildren. All children receive meals free,and the Department reimburses localsponsoring organizations for a portion of themeals served.

Dairy products, cereal, pasta,peanuts, rice, flour,vegetable oil

Food andNutritionService

FoodDistributionProgram onIndianReservations

Program is an alternative to the FoodStamp Program for meeting the nutritionalneeds of households living on or near anIndian reservation or in designated serviceareas in Oklahoma. Households qualify forthe program on the basis of their incomeand resources. Participants receive amonthly food package that contains avariety of commodities to help themmaintain a balanced diet.

Dairy products, corn, cereal,pasta, peanuts, rice, flour,vegetable oil
ENCLOSURE I 

8 GAO/RCED-00-173R RegulationPurchasing agency5

Administeringagency Program Description Type of food

FY 199purcha

Food andNutritionService

NutritionProgram fortheElderly/AreaAgencies onAging

Program provides nutritious meals for olderadults, either in congregate meal settings orthrough home delivery. The Departmentprovides cash and commodities to stateagencies on aging and tribal organizations.

Dairy products, cereal, pasta,peanuts, rice, flour,vegetable oil

Food andNutritionService

DisasterFeeding

Food and Nutrition Service makescommodities available for distribution todisaster relief agencies, such as the RedCross, when the President declares adisaster, as well as in other situations ofdistress. The commodities are provided todisaster victims through congregate mealservices and direct distributions tohouseholds.

Dairy products, corn, cereal,pasta, peanuts, rice, flour,vegetable oil

ForeignAgricultureService

Sec. 416(b)/AgriculturalAct of 1949

Program provides for overseas donations ofsurplus commodities acquired by the CCC.Donations may not reduce the amounts ofcommodities that are donated traditionallyto domestic feeding programs or agenciesand may not disrupt normal commercialsales.

All-purpose and bread flour,bulgur, corn, cornmeal,varieties of wheat, dried milk

U.S. AgencyforInternationalDevelopment

Title II, P.L.480--Emergencyand PrivateAssistance

Program provides for the donation of U.S.agricultural commodities to meetemergency and nonemergency food needs.Agricultural commodities donated by theU.S. government for emergency needs maybe provided under government-togovernment agreements; through publicand private agencies, includingintergovernmental organizations; andthrough other multilateral organizations.Nonemergency assistance may also beprovided through private voluntaryorganizations, cooperatives, andintergovernmental organizations.

Feed grains, rice, vegetableoil, wheat

$7

7Includes $361.8 million for freight costs, which are contracted for separately.8Includes $308.4 million for freight costs.
ENCLOSURE I 

9 GAO/RCED-00-173R RegulationPurchasing agency5

Administeringagency Program Description Type of food

FY 199purcha

U.S. AgencyforInternationalDevelopment

Title III, P.L.480--Food forDevelopment

Program provides for government-togovernment grants to support long-termgrowth in the least developed countries.Donated commodities are sold in therecipient country, and the revenuegenerated is used to support economicdevelopment programs.

Wheat 4

ForeignAgricultureService

Food forProgress(Title I, P.L.480)/ Foodfor ProgressAct of 1985

Program provides commodities to supportcountries that have made commitments toexpand free enterprise in their agriculturaleconomies.

Wheat, wheat flour, soybeanmeal, soybeans, vegetableoil

4

ForeignAgricultureService

Food forProgress(CCCfunded)/Food forProgress Actof 1985

Program provides commodities to supportcountries that have made commitments toexpand free enterprise in their agriculturaleconomies.

Tallow, flour, rice, varieties ofseeds, varieties of cornproducts, varieties of oils,varieties of wheat, beans,peas, dried milk, pinksalmon, varieties of porkproducts, soybean meal

7

Subtotal--FSA $1,19Includes $357.6 million for freight costs.10Includes $412.2 million for freight costs.11Includes $12.4 million for freight costs.12Includes $11.2 million for freight costs.13Includes $7.6 million for freight costs.14Includes $25.4 million for freight costs.15Includes $22.8 million for freight costs.16Includes $28.9 million for freight costs.17Includes $11.7 million for freight costs.18Includes $24.7 million for freight costs.19Includes $22.2 million for freight costs.
ENCLOSURE I 

10 GAO/RCED-00-173R RegulationPurchasing agency5

Administeringagency Program Description Type of food

FY 199purcha

Department ofAgriculture,AgriculturalMarketing Service(AMS)

AgriculturalMarketingService

Purchasesfor theNationalSchool LunchProgramunder section32 of the actof August 24,1935

These expenditures are part of a permanentappropriation that sets aside a share of thetariff duties collected by the U.S. CustomsService. These funds are used toencourage domestic consumption ofagricultural commodities and fulfill theentitlement mandate of section 6 of theNational School Lunch Act.

Frozen and bulk fruit juice;fresh, frozen, and cannedfruit; fresh, frozen, canned,dehydrated, and driedvegetables; fresh and frozenchicken; fresh, frozen, anddried egg products; cannedpoultry; fresh and frozenturkey; frozen beef; frozenpork; canned fish; andcanned meat.

3

AgriculturalMarketingService

Contingencypurchasesunder section32 of the actof August 24,1935

The contingency purchases support theremoval of surplus commodities from themarket. Such removal is in the form of onetime emergency purchases to relieve shortterm or rapidly developing marketsurpluses. Section 32 contingencypurchases also support Food Assistance forDisaster Relief, a program that (1) takesfoods from other programs for states anddisaster assistance organizations to give todisaster victims and (2) reimburses theother programs with section 32 funds.

Frozen and canned fruitjuice; fresh, frozen, canned,and dried fruit; frozen,canned, dehydrated, anddried vegetables; nuts; freshand frozen chicken; cannedpoultry; fresh and frozenturkey; frozen beef; frozenpork; frozen and canned fish;canned meat; and frozenbison and frozen lamb.

Food andNutritionService

NationalSchool LunchProgram/Section 6 ofthe NationalSchool LunchAct of 1946

Section 6 of the National School Lunch Actprovides funds for agricultural commoditiesto be made available to states and schoolsfor child nutrition programs, includingcommodity foods for child and adult daycare centers. Section 6 prescribes a levelof support (by formula) that is to beprovided to states in commodities asentitlement.

Fresh, frozen, and cannedfruit; fresh, frozen, canned,dehydrated, and driedvegetables; fresh and frozenchicken; fresh and frozenegg products; fresh andfrozen turkey; frozen beef;and frozen pork.
ENCLOSURE I 

11 GAO/RCED-00-173R RegulationPurchasing agency5

Administeringagency Program Description Type of food

FY 199purcha

Food andNutritionService

The FoodDistributionPrograms onIndianReservations/Section 4a oftheAgricultureandConsumerProtectionAct of 1973.

Program distributes food packages tohouseholds on Indian reservations whenthey elect to receive commodities in lieu offood stamps.

Canned fruit juice; cannedand dried fruit; fresh, canned,dehydrated, and driedvegetables; syrup; fresh andfrozen chicken; fresh, frozenand dried egg products;canned poultry; frozen beef;canned fish; and cannedmeat.

Food andNutritionService

NutritionProgram forthe Elderly/Section 311of the OlderAmericansAct of 1965.

Program provides commodity support tosenior citizen meal sites.

Frozen fruit juice; fresh,frozen, and canned fruit;fresh, frozen, and cannedvegetables; fresh and frozenchicken; fresh, frozen, anddried egg products; cannedpoultry; fresh and frozenturkey; frozen beef; frozenpork; and canned meat.

Food andNutritionService

CommoditySupplementalFoodProgram/Section 17 ofthe ChildNutrition Actof 1966

Program provides food packages topregnant and postpartum women andchildren who are at nutritional risk.

Canned fruit juice; cannedfruit; fresh, canned,dehydrated, and driedvegetables; dried eggproducts; canned poultry;canned fish; and cannedmeat.

Food andNutritionService

TheEmergencyFoodAssistanceProgram/ TheEmergencyFoodAssistanceAct of 1983

Program provides food to the homeless andother needy individuals through food banksand soup kitchens.

Canned fruit juice; fresh,canned, and dried fruit; fresh,canned, dehydrated, anddried vegetables; syrup;fresh and frozen chicken;dried egg products; cannedpoultry; fresh and frozenturkey; frozen beef; frozenpork; canned fish; andcanned meat.
ENCLOSURE I 

12 GAO/RCED-00-173R RegulationPurchasing agency5

Administeringagency Program Description Type of food

FY 199purcha

Subtotal—AMS $7Subtotal—Agriculture(FSA + AMS)

$18

Department ofJustice, Bureau ofPrisons

96 federalcorrectionalinstitutions

Subsistenceprogram tosupport basicmission oftheinstitutions

Program purchases food for prisons onprimarily a local, and sometimes a regional,basis depending on item involved. Someinstitutions purchase eggs, dairy, and breadproducts through Department of Defensecontracts. During fiscal year 1999, 546,554staff and inmates were served meals inBureau of Prisons institutions.

Subsistence items such ascanned foods, spices, andjellies; meats, dairy, eggs,and bread products

Subtotal—Justice $
ENCLOSURE I 

13 GAO/RCED-00-173R RegulationPurchasing agency5

Administeringagency Program Description Type of food

FY 199purcha

Department ofDefense, DefenseSupply CenterPhiladelphia

The militaryservices

Programpurchasesfood tosupport theU.S. militaryworldwide.

The food is used by military services indining halls and aboard ships for peacetimefeeding and is used by the services for fieldfeeding during exercises, for contingenciesand/or in support of humanitarian efforts.

Dairy, breads and bakeryitems, coffee, tea, soda,meats, fresh fruits andvegetables, juices, mealsready to eat (MREs), andother operational rations.

6

Various federalagencies

Programmakes foodpurchases forotheragenciesthrough itsexistingprogramsandcontracts.

The other agencies taking part in theDefense food program include Agriculture’sSchool Lunch and Native American Supportprograms; Department of Commerce;Department of the Interior; Department ofJustice/Bureau of Prisons; Department ofLabor/Job Corps; Department of State;Department of the Treasury; Department ofVeterans Affairs; General ServicesAdministration; Federal EmergencyManagement Agency; Department of Healthand Human Services; National Aeronauticsand Space Administration; U.S. Soldiers’Home; District of Columbia Public Schools;U.S. Information Agency; Agency forInternational Development; U.S. Congressand miscellaneous organizations; U.S.Postal Service; Federal Aviation Agency;Department of Energy.

Mostly fresh fruit andvegetables, but someagencies order rations andprime vendor products

Subtotal—Defense $6Department ofVeterans Affairs

Office ofAcquisitionand MaterielManagement

Programpurchasesfood for 172VeteransAffairsfacilities

The food is purchased primarily through theSubsistence Prime Vendor program andused by all Veterans Affairs medical centersand other facilities. Other purchases aremade through local vendors.

All types of food availablethrough prime vendors, andother items including freshand dried milk and otherdairy products, fresh andfrozen bread, produce, anddietary supplements

20Defense’s purchases for other agencies in fiscal year 1997 and subsequent years have been adjusted to eliminate duplication of purch

Justice, Labor and Veterans Affairs that are reported elsewhere in this table.
ENCLOSURE I 

14 GAO/RCED-00-173R RegulationPurchasing agency5

Administeringagency Program Description Type of food

FY 199purcha

Othergovernmentactivities

50 other government facilities have joinedthe Veterans Affairs prime vendor contractto purchase food for their operations: stateveteran homes, Indian health facilities, andDefense health care facilities.

All types of food availablethrough the vendors,including fresh and driedmilk, other dairy products,fresh and frozen bread,produce, and dietarysupplements

Veterans Affairs—Subtotal $Department ofLabor

Employmentand TrainingAdministration/Job Corps

Job CorpsCentersprovideemploymentand trainingfor severelydisadvantaged youths

The 118 centers provide youths with acomprehensive array of services, generallyin a residential setting. The servicesinclude basic education, vocational skillstraining, social skill instruction, counseling,health care, room and board, andrecreation. While private and nonprofitcontractors operate the majority of thecenters, the departments of the Interior andAgriculture operate 28 as CivilianConservation Corps programs. About66,000 youths participate in the programeach year in 48 states and the District ofColumbia and Puerto Rico. Programoperators make purchases through primevendor programs of Defense and VeteransAffairs and through other vendors.

Proteins, vegetables andfruits, grain products, anddairy products

4

Subtotal—Labor $Total $2,721Purchases listed are for the Job Corps' program year ending June 30,1997.22Purchases listed are for the Job Corps' program year ending June 30,1998.23Purchases listed are for the Job Corps' program year ending June 30,1999.
ENCLOSURE I 

15 GAO/RCED-00-173R RegulationSource: GAO’s compilation of agencies’ data on programs and purchases.
ENCLOSURE II 

16 GAO/RCED-00-173R Regulation

Eleven Major Federal Regulations With

Information on Their Effect on Food and Commodity Prices

Rule title/ agency/ date/Federal Register citation

Purpose and statutory authorization of the rule aspublished in the Federal Register

Food orcommodity

Existingprice(baseline)

Projectedprice

Quantitativconclusion 

Pathogen Reduction: HazardAnalysis and Critical ControlPoint (HACCP) Systems/Food Safety and InspectionService, Department ofAgriculture/ July 25, 1996/ 61Fed. Reg. 38805

Sets requirements for meat and poultry slaughterestablishments designed to reduce the occurrenceand numbers of pathogenic microorganisms on meatand poultry products and reduce the incidence of foodborne illness associated with the consumption of thoseproducts. The rule provided a new framework formodernizing the current system of meat and poultryinspection. 21 U.S.C. 451-470, and 601-695 and 7U.S.C. 1901-1906

Meat andpoultry

Not provided Not provided 4-year impl

increase prpound at reprice increa$0.0018 peproduction.

Dairy Tariff-Rate ImportQuota Licensing/ Departmentof Agriculture/ Oct. 9, 1996/61 Fed. Reg. 53001

Revises regulations governing the administration ofthe import licensing system for certain dairy productsthat are eligible for in-quota tariff rates. The ruleincorporates Uruguay Round Agreement commitmentsrelating to increased market access for dairy articles.The United States agreed to end quantitativerestrictions, replacing them with tariff-rate quotasunder which a limited level of imports are permitted ata low tariff rate and any imports beyond that level areassessed a tariff at a higher rate. 19 U.S.C. 1202,3513 and 3601

Importedcheese andlicensed dairyproducts

Import licensecost of$0.00138 perpound ofimportedcheese in1995

Import licensecost of$0.0016 to$0.0017 perpound ofimportedcheese in1998

Increased cabout $0.00would have not expecteshare for thbecause aclimited by th
ENCLOSURE II 

17 GAO/RCED-00-173R Regulation

Rule title/ agency/ date/Federal Register citation

Purpose and statutory authorization of the rule aspublished in the Federal Register

Food orcommodity

Existingprice(baseline)

Projectedprice

Quantitativconclusion 

Barley $2.57 per

bushel in1997

$2.63 perbushel

Increase of bushel

Corn 2.81 per

bushel in1997

$2.88 perbushel

Increase of bushel

Oats $1.66 per

bushel

$1.75 perbushel

Increase of bushel

Sorghum $2.57 per

bushel

$2.63 perbushel

Increase of bushel

Wheat $4.18 per

bushel

$4.43 perbushel

Increase of bushel

Conservation ReserveProgram—Long-Term Policy/Farm Service Agency andCommodity Credit Corp.,Department of Agriculture/Feb. 19, 1997/ 62 Fed. Reg.7601

Amends the Conservation Reserve Program to costeffectively target it to more environmentally sensitiveacreage. Revises the terms and conditions forenrolling acreage, updating other program eligibilityrequirements, and consolidating and reorganizing theprogram’s regulations. 16 U.S.C. 3801-3847

Soybeans $6.57 per

bushel

$6.73 perbushel

Increase of bushel
ENCLOSURE II 

18 GAO/RCED-00-173R Regulation

Rule title/ agency/ date/Federal Register citation

Purpose and statutory authorization of the rule aspublished in the Federal Register

Food orcommodity

Existingprice(baseline)

Projectedprice

Quantitativconclusion 

Karnal Bunt Disease:Domestic Plant-RelatedQuarantine, Final Rule; andKarnal Bunt: Compensationfor the 1995-96 Crop Season,Final Rule/ Department ofAgriculture, Animal and PlantHealth Inspection Service/Oct. 4, 1996 and May 6,1997/ 61 Fed. Reg. 52190and 62 Fed. Reg. 24746

The final rule establishes criteria for levels of risk forareas with regard to Karnal bunt, a fungal disease ofwheat, and for the movement of regulated articlesbased on those risk areas. It provides forcompensation for certain growers and handlers,owners of grain storage facilities, and flour millers tomitigate losses because of Karnal bunt in the 1995-96crop season. 7 U.S.C. 150bb, 150dd, 150ee, 150ff,161, 162, and 164-167

Wheat $3.85 per

bushel

The mostlikely pricewould be$3.63 perbushel ifquarantinewas notimplemented

The most liexports due $0.22-per-blosses estimbeen $500 the loss to aestimated a

Amendment to the PeanutPoundage QuotaRegulations/ Farm ServiceAgency, Department ofAgriculture/ May 9, 1997/ 62Fed. Reg. 25433

The amendments to the final rule involve (1)eliminating the national poundage quota floor; (2)eliminating the undermarketing carryover provisions;(3) establishing temporary seed quota allocations; (4)establishing the ineligibility of certain farms for quotaallocations; (5) authorizing the intercounty transfer offarm poundage quotas in all states, subject to certainlimitations in some states; (6) eliminating the specialallocations of increased quotas for certain Texascounties; (7) establishing new provisions for“considered produced” credit with respect to a farmwhose quota has been transferred; and (8) other minorclarifying and technical changes. 7 U.S.C. 1301, 1357et seq. 1372, 1373, 1375 and 7271

Peanuts andpeanutproducts

$0.30 perpound forcrop year1996-97 to$0.3264 forcrop year2002-03

$0.27 perpound forcrop year1996-97 to$0.2763 forcrop year2002-03

$0.03-0.05 of peanuts agency prosave about annually.
ENCLOSURE II 

19 GAO/RCED-00-173R Regulation

Rule title/ agency/ date/Federal Register citation

Purpose and statutory authorization of the rule aspublished in the Federal Register

Food orcommodity

Existingprice(baseline)

Projectedprice

Quantitativconclusion 

Importation of Pork fromSonora, Mexico/ Departmentof Agriculture, Animal andPlant Health InspectionService/ May 9, 1997/ 62 Fed.Reg. 25439

Amendment of regulations on importation of animalproducts to allow, under certain conditions, theimportation of fresh, chilled, or frozen pork from thestate of Sonora, Mexico. 7 U.S.C. 147a, 150ee, 161,162 and 450; 19 U.S.C. 1306; 21 U.S.C. 111, 114a,134a, 134b, 134c, 134f, 136, and 136a; 31 U.S.C.9701; 42 U.S.C. 4331 and 4332.

Fresh porkproducts

Not provided $0.07 to

$0.16 lessper poundretail

Increased swould lead savings cou$24.5 millioMexican imsupply and 

Importation of Beef fromArgentina/ Department ofAgriculture, Animal and PlantHealth Inspection Service/June 26, 1997/ 62 Fed. Reg.34385

Amended the regulations on the importation of animalproducts in order to prevent the introduction of footand-mouth disease and to allow under certainconditions the importation of fresh, chilled, or frozenbeef from Argentina. This change is in keeping withprovision of trade agreements entered into by theUnited States by removing unnecessary restrictions onthese imports. 7 U.S.C. 147a, 150ee,161,162, and450; 19 U.S.C. 1306; 21 U.S.C. 111,114a, 134a, 134b,134c, 134f, 136 and 136a; 31 U.S.C. 9701; 42 U.S.C.4331 and 4332

Beef productsin U.S. market

Wholesaleprice of$4,402.17 permetric ton24 of

carcassweightequivalent in1995

Wholesaleprice of$4,393.90 permetric ton ofcarcassweightequivalent

Wholesale ton of carcathe increaseArgentina, cabout $89.2 products if 2imported.

Pseudorabies in Swine;Payment of Indemnity, InterimRule / Department ofAgriculture, Animal and PlantHealth Inspection Service/Jan. 15, 1999/ 64 Fed. Reg.2545

Interim rule establishes the animal health regulationsto provide for the payment of indemnity for thevoluntary depopulation of herds of swine (hogs) knownto be infected with pseudorabies and, therefore, willreduce the risk of other swine becoming infected withthe disease. 21 U.S.C. 111-113, 114, 114a, 114a-1,120, 121, 125 and 134b

Pork products Not provided Not provided By reducing 

will result in producers. information prices.

Milk in the New England andOther Marketing Areas; OrderAmending the Orders/Department of Agriculture,Agricultural MarketingService/ Sept. 1, 1999/ 64Fed. Reg. 47898

To consolidate the number of federal milk marketingorders from 31 to 11 and add some counties into thenew marketing order areas. 7 U.S.C. 601-674 and7253

Fluid milk(Class I)

On average$16.22 perhundredweight

$0.06 more to$0.09 lessper gallon onavg. for allareas

On average areas over save $80.4 annually. Tbecause of milk to be m

24 2204.62 pounds
ENCLOSURE II 

20 GAO/RCED-00-173R Regulation

Rule title/ agency/ date/Federal Register citation

Purpose and statutory authorization of the rule aspublished in the Federal Register

Food orcommodity

Existingprice(baseline)

Projectedprice

Quantitativconclusion 

Milk for softmanufacturedproducts (ClassII)

On average,$13.95 perhundredweight

On average,$0.50 moreper hundredweight

Overall, the manufactur$77.6 millioincrease is quantity of manufactur

Milk for creamand othercheeses (ClassIII)

On average,$13.65 perhundredweight

On average,$0.01 moreper hundredweight

On averageunchanged 

Milk for butterand milkpowders (ClassIV)

On average,$13.76 perhundredweight

On average,the pricewould beunchanged

On averageunchanged 

Irradiation of Meat FoodProducts/ Food Safety andInspection Service,Department of Agriculture/Dec. 23, 1999/ 64 Fed. Reg.72150

To amend regulations to permit the use of ionizingradiation for treating refrigerated or frozen, uncookedmeat, meat byproducts and certain other meat foodproducts to reduce the level of food-borne pathogensand to extend shelf life. Federal Meat Inspection Actand Poultry Inspection Act. 7 U.S.C. 138f, 450; 21U.S.C. 451-470

Ground beef Not provided $0.02 to

$0.06 moreper pound

The annual estimated to million (199

Nonfat driedmilk

Not provided No change With this pr

not change purchase pcurrent marnot extendefall $0.10 p

1999 Crop and MarketingLoss Assistance/ FarmService Agency, Departmentof Agriculture/ Feb. 16, 2000/65 Fed. Reg. 7942

Implement requirements of the 2000 appropriationsacts related to crop and market loss assistance foragricultural producers and other provisions related tocrop or market loss provisions. 15 U.S.C. 714b and714c

Honey Not provided No change The analys

to have an 
ENCLOSURE II 

21 GAO/RCED-00-173R Regulation

Rule title/ agency/ date/Federal Register citation

Purpose and statutory authorization of the rule aspublished in the Federal Register

Food orcommodity

Existingprice(baseline)

Projectedprice

Quantitativconclusion 

Livestock Not provided No change No measura

expected bedisaster-afflivestock raslaughter.

Peanuts Not provided No change No measura

expected bepeanut prodmarket pric

Source: Text of major regulations as published in the Federal Register and supporting regulatory impact analyses as submitted to GAO Regulatory Enforcement Fairness Act of 1996.
ENCLOSURE III ENCLOSURE III

22 GAO/RCED-00-173R Regulations’ Effect on Food Prices

Twelve Major Federal Regulations Without

Information on Their Effect, If Any, on Food and Commodity Prices

Twelve of the 23 major regulations and associated cost-benefit analyses we reviewed did not

provide information on food and/or commodity price impacts. However, this does not

necessarily mean that the regulations have no effect on these prices. Rather, these effects were

not among those analyzed by the agencies responsible for preparing the cost-benefit analyses.

List of the 12 Regulations

“Catastrophic Risk Protection Endorsement,” Final Rule, Department of Agriculture, Federal

Crop Insurance Corporation, Aug. 20, 1996, 61 Fed. Reg. 42979.

“Environmental Quality Incentives Program,” Final Rule, Department of Agriculture, Natural

Resources Conservation Service, May 22, 1997, 62 Fed. Reg. 28258.

“Substances Prohibited From Use in Animal Food or Feed; Animal Proteins Prohibited in

Ruminant Feed,” Final Rule, Department of Health and Human Services, Food and Drug

Administration, June 5, 1997, 62 Fed. Reg. 30936.

“General Administrative Regulations, Subpart U; and Catastrophic Risk Protection Endorsement;

Regulations for the 1999 and Subsequent Reinsurance Years and General Administrative

Regulations, Subpart T—Federal Crop Insurance Reform, Insurance Implementation;

Regulations for the 1999 and Subsequent Reinsurance Years; and the Common Crop Insurance

Regulations; Basic Provisions; and Various Crop Insurance Provisions,” Interim Rules,

Department of Agriculture, Federal Crop Insurance Corp., July 30, 1998, 63 Fed. Reg. 40630 and

40632.

“Solid Wood Packing Material From China,” Interim Rule, Department of Agriculture, Animal

and Plan Health Inspection Service, Sept. 18, 1998, 63 Fed. Reg. 50100.

“National Primary Drinking Water Regulations: Disinfectants and Disinfection By-products,”

Final Rule, Environmental Protection Agency, Dec. 16, 1998, 63 Fed. Reg. 69390.

“National Primary Drinking Water Regulations: Interim Enhanced Surface Water Treatment,”

Final Rule, Environmental Protection Agency, Dec. 16, 1998, 63 Fed. Reg. 69478.

“Livestock Assistance Program,” Final Rule, Department of Agriculture, Commodity Credit

Corp., Mar. 19, 1999, 64 Fed. Reg. 13497.
ENCLOSURE III ENCLOSURE III

23 GAO/RCED-00-173R Regulations’ Effect on Food Prices

“Phase 2 Emission Standards for New Non-road Spark-Ignition Non-handheld Engines at or

Below 19 Kilowatts,” Final Rule, Environmental Protection Agency, Mar. 30, 1999, 64 Fed. Reg.

15208.

“1998 Single-Year and Multi-Year Crop Loss Disaster Assistance Program,” Final Rule,

Department of Agriculture, Farm Service Agency, Apr. 15, 1999, 64 Fed. Reg. 18553.

“Persistent Bioaccumulative Toxic (PBT) Chemicals; Lowering of Reporting Thresholds for

Certain PBT Chemicals; Addition of Certain PBT Chemicals; Community Right-to-Know Toxic

Chemical Reporting,” Final Rule, Environmental Protection Agency, Oct. 29, 1999, 64 Fed. Reg.

58666.

“National Pollutant Discharge Elimination System—Regulations for Revision of the Water

Pollution Control Program Addressing Storm Water Discharges,” Final Rule, Environmental

Protection Agency, Dec. 8, 1999, 64 Fed. Reg. 68722.

(150164)