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Fleecing Taxpayers
Mohair Subsidies

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"Nobody goes out and helps subsidize the local pizzeria when it goes out of business." Representative Mark Sanford (R-SC) discussing the mohair program in the Fresno Bee, July 12, 2000.

During World War II, U.S. soldiers wore uniforms made of wool. Worried that domestic producers could not supply enough for future wars, Congress enacted loan and price support programs for wool and mohair in 1954. Mohair is wool made from goat hair. Despite these programs, wool and mohair production declined. Nevertheless, the U.S. government continued to provide subsidies to mohair producers until 1994.

In the early 1990's, nearly 100,000 wool and mohair producers were receiving benefits worth hundreds of millions of dollars per year. In 1994, Congress phased out the outdated mohair program, saving about $200 million a year. However, in the fiscal year 1999 Omnibus Appropriations bill and again in the fiscal year 2000 Agriculture Appropriations bill, mohair producers once again became eligible to receive interest free loans.

Green Scissors Proposal
End all subsidies to mohair producers and allow the market to dictate mohair production and prices instead.

Current Status

Recent legislation has provided for direct payments and loan benefits for mohair producers. An emergency agriculture assistance bill, H.R. 2213, provided for direct payments to mohair producers of $0.20 per pound for 2000 marketings and $0.40 per pound for 1999 marketings. The legislation's provision provided up to $16.9 million in payments. In addition, mohair produced before or during fiscal year 2000 was eligible for recourse loans set at $2 per pound.

In legislative action, Rep. Anthony Weiner (D-NY) offered an amendment to the FY02 Agriculture Appropriations bill (H.R. 2330) to eliminate direct payments to mohair producers. This amendment failed on a 155 to 272 vote.

The House-passed reauthorization of the Farm Bill (H.R. 2646) reinstates parts of the mohair subsidy program. The bill provides marketing loans and loan deficiency payments at rates of $4.20 per pound for mohair.

Program Hurts Taxpayers

The federal government should not be in the business of subsidizing mohair producers. Mohair no longer has the strategic importance it had during the 1950s when mohair producers first began receiving subsidies.

The program deprives taxpayers and consumers of the benefits of market influences on mohair and mohair products by keeping prices unnecessarily high.

The mohair subsidy was reinstated despite clear congressional intent to end it in 1994.

Program Hurts the Environment

Overgrazing caused by goats contributes to erosion and degradation of riparian areas, which in turn leads to the silting and pollution of waterways.

Domestic livestock, especially goats, compete directly with native wildlife species for available food and water. Goats also reduce nesting success for ground nesting birds by trampling the nesting sites, disturbing the adult birds and removing vegetative cover.

Government support will encourage more mohair production, which will compound the risk of environmental harm that goats cause.

Contacts

• Cena Swisher, Taxpayers for Common Sense, (202) 546-8500 x108.