Incentive payments

The incentive payments are direct payments made under the National Wool Act (P.L. 83-690, Title VII) to producers of wool and mohair, which were similar to deficiency payments made to producers of grains and cotton. The incentive payment rate was the percentage needed to bring the national average return to producers (the market price plus the incentive payment) up to the annually set national support price. Each producer’s direct payment was the payment rate times the market receipts. Producers with higher market receipts got larger support payments. This created an incentive to increase output and to improve quality.