Summary: Recent changes in both federal agricultural programs and international agricultural markets have increased the potential economic risks confronting the nation's farmers. The Federal Agriculture Improvement and Reform Act of 1996 encouraged farmers to make production decisions in response to market forces. GAO examined the Department of Agriculture's (USDA) efforts to educate farmers about risk management. This report provides information on (1) the extent of farmers' use of risk management tools and (2) the educational programs and projects USDA has undertaken to prepare farmers to manage risks and to determine the groups or individuals who have participated in or been served by these programs. GAO found that in 1996 about 42 percent of the nation's 2 million farmers used one or more risk management tools to limit potential income losses resulting from falling market prices or production failures. In addition, in fiscal year 1998, USDA obligated $5 million for four educational initiatives to prepare farmers to manage risks.
