The gumshoes from the General Accounting Office have found some more fuzzy business in government: the federal wool incentive program.
That's the Department of Agriculture's program of payments to farmers to support, encourage, abet and spur the production of wool.
This year alone, it's going to cost more than $46.6 million.
But the GAO, after taking a close look at the wool program, concluded that someone -- and it isn't the sheep -- is getting fleeced.
Although the program has cost taxpayers about $2 billion since 1955, GAO argued in a recent study that it really hasn't achieved its goal of increasing U.S. wool production. The level of 106 million pounds of wool in 1980 was less than half 1955 production.
Back in the beginning, one of the justifications for the wool incentive program was national security. Wool was important to the military for uniforms and blankets and it was vital to the U.S. textile industry.
Then, somewhere along the line wool got undercut by synthetic fibers and its strategic importance waned. But the wool-support program kept right on going.
The GAO has recommended that Congress take a new look at the support program (even though it did so last year and continued it with hardly a peep of dissent) to determine if changes ought to be made. The report already has one important supporter, USDA.
"We agree with most of the findings," commented Everett Rank, administrator of the Commodity Credit Corp. He added that the study was "well prepared" and a "fair appraisal of the strengths and weaknesses of the program."
Wool producers get about three-fourths of their income from sheep raising by selling lambs for slaughter. And while U.S. wool production increased last year for the third straight year, world production is up sharply and imports of wool and woolen goods have shorn some of the domestic industry's enthusiasm.
Under the support system, a farmer sells wool to a commercial processor and then gets a bonus payment from the government. This year, the way the formula is calculated, if the farmer sells $100 worth of wool, the CCC pays the farmer an additional $42.90.
In the typical year, about 80,000 farmers are getting the payments, averaging about $400 each.
Producers get paid for the wool shorn from sheep as well as for wool pulled from the carcasses of lambs sent to slaughter. The program has cost as much as $102 million (in 1971) when wool prices were severely depressed and as little as nothing (in 1973) when market prices went above the guaranteed support.
According to the GAO, it really is a bonus because most sheep-raising decisions are based on the profitability of the lamb market, rather than on the wool program. The incentives, however, have kept some producers in business and slowed the decline of the sheep industry somewhat, GAO said.
The congressional auditing agency suggested that if the program is retained, Congress at least ought to halt payments to noncommercial producers, part-time farmers and dabblers who would raise sheep in any case.