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1 A report prepared by the Economic Research Service, United States Department of
Agriculture, April 30, 1999, for the House Committee on Appropriations, as requested in House
Report Number 105-588, page 16 (1998).
ECONOMIC IMPACT OF THE ELIMINATION OF THE WOOL ACT1
Introduction
Public Law 103-130, signed into law on November 1, 1993, mandated the phase-out of the
National Wool Act programs, including the direct price support payments to producers. In the
four years prior to termination (1990-93), payments to wool producers averaged $122 million per
year. The market value of the wool produced in those years averaged $53 million per year,
equivalent to 43 percent of the value of the direct payments. The loss of direct payments was,
therefore, a significant loss to wool and mohair producers. However, farm asset values and local
economies were little affected. And, increases in income from sheep and lamb slaughter partly
offset revenue losses from wool. This report considers the implications of the termination of the
National Wool Act on the market value of sheep, lamb, and wool and mohair production at the
national level and in two counties in Texas heavily dependent on wool and mohair production
and sales.
National Wool Act Programs
The National Wool Act, as amended, (Wool Act) 7 U.S.C.
1781-87, repealed by Act of Nov.
1, 1993, Pub. L. No. 103-130, served as the basis for the wool and mohair price support programs
carried out from 1955 to 1995. Although the Wool Act authorized price support for wool and
mohair through $loans, purchases, payments or other operations,# from the start 7 U.S.C.
1782(a) (repealed), wool and mohair producers were supported through direct payments. The
Wool Act authorized support payments for shorn wool, mohair, and pulled wool (wool removed
mechanically from the pelts of slaughtered sheep and lambs). A complex, parity-based formula
specified in the legislation determined the shorn wool support price. The Wool Act gave the
Secretary of Agricul