Summary: In response to a congressional request, GAO reviewed the methods used by the Agricultural Stabilization and Conservation Service (ASCS), the Federal Crop Insurance Corporation (FCIC), and the Farmers Home Administration (FmHA) to estimate crop yields. The review identified: (1) the impact of differences in estimated yields the agencies used; and (2) possible improvements to the yield estimation process.
ASCS, FCIC, and FmHA make payments and loans to farmers who enroll in their programs. Since the agencies' programs have different purposes, farmers enroll their cropland in more than one program. However, because each agency independently develops an estimated yield, the same cropland parcel can receive three different yield estimates. With no consistent basis for loan and payment calculations, farmers' payments under one agency's programs can be overstated or understated when compared with the payments calculated using another agency's yield estimates. GAO estimated how each agency's payments to individual farmers for their 1984 crops would have differed if the other agencies' estimated yields had been used to calculate the payment amounts. GAO found that the impact of different yield estimates was significant for many of the sampled farmers. GAO also determined that some of the principal factors in calculating a yield estimate for a specific parcel of cropland include: (1) the number of years included in the base period; (2) the type and extent of adjustments to actual yield data that would be permitted; and (3) the cost of the estimates. GAO believes that: (1) a long base period is desirable because it will better reflect a cropland unit's historical capacity; and (2) agencies should use an adjusted single-yield estimate in their benefit calculations. GAO concluded that most farmers and Department of Agriculture (USDA) officials favor a single-yield estimate for all department programs.
