Summary: GAO reviewed the Department of Agriculture's wool incentive payment program to determine whether it is accomplishing its objectives and whether these objectives are still valid.
The federal wool incentive program has had little effect on encouraging wool production and improving wool quality because decisions to raise sheep are based primarily on the profitability of the lamb market. Since most producers decide to raise sheep regardless of federal encouragement, program payments do not necessarily encourage production. Furthermore, the increased use of synthetic fibers in military items, once made entirely of wool, and in commercial products has reduced the need for wool, and it is no longer on the list of strategic commodities. GAO found that, although program payments to producers have been substantial, wool production has declined by over 50 percent since the inception of the program. Furthermore, reports on the domestic wool market indicate that wool quality has not improved. Therefore, the major reasons for establishing a program to encourage wool production are not as important as they were when the program was initiated.
