Summary: For more than 40 years, the federal government's wheat commodity program has tried to reduce wheat price fluctuations while ensuring ample supplies for consumers. Because total returns for wheat were often above expected market returns, producers grew wheat to receive these benefits in addition to return from the commercial market. Congress passed legislation in 1985 and again in 1990 to gradually increase the influence of the commercial market on farmers' production decisions and to reduce the level of government support for wheat production. Despite these reforms, the government's involvement in managing surplus wheat remains substantial. Deficiency payments under the wheat program are above the 1982-85 levels, and the Conservation Reserve Program and the Export Enhancement Program have added costs averaging more than $800 million per year from 1986 to 1991. Because the government's costs connected with wheat production are affected by external factors such as droughts and international wheat production and prices, it could be misleading to compare trends in the government's overall costs from year to year. Over the long run, however, GAO would expect costs to be lower than they would have been under the 1981 farm bill.
