Cash crop on the farm
Published: Wednesday, August 1, 2007 at 8:34 p.m.
Last Modified: Wednesday, August 1, 2007 at 12:00 a.m.
"Bought the farm," a common euphemism for death, apparently has taken on a new meaning at the U.S. Department of Agriculture. In a recent review of 181 farm-subsidy cases, auditors at the Government Accountability Office found that agricultural officials routinely failed to conduct basic reviews to determine if the farmer receiving payments is still alive or if the farmer's estate is still eligible for the money.
According to the auditors, the USDA approved payments in 73 of the 181 cases - 40 percent - without any review. In most of the others, said the auditors, documents required from the farmer or the farmer's estate for payment were missing or incomplete. The payments, made between 1999 and 2005, totaled a whopping $1.1 billion.
"Farm payments are meant for those who need some help getting through tough times," Sen. Charles Grassley, R-Iowa, told The Washington Post. "Clearly, there are loopholes that should be closed and laws that need to be followed."
It should be noted that Grassley is a beneficiary of the program. The Environmental Working Group's farm-subsidy database found that for the 10-year period ended in 2005, Grassley collected $225,041 in farm-subsidy payments. His was among the smaller payouts. John Hancock Life Insurance collected more than $2.8 million in the same period.
Grassley said that one Arkansas farm received $38 million in subsidies between 1996 and 2001 for a 61,000-acre family operation. Normally, the subsidy wouldn't have been that much, but the family leased the land to a complex partnership involving 39 local investors who, in turn, have 66 separate corporations to maximize government payments.
Grassley, who asked the GAO to conduct the audit, has long complained that the subsidy program is rife with waste and fraud. This report, at best, indicates extremely loose oversight of payments.
As The Post noted in a story last week, an estate can collect federal subsidies for as long as two years after an owner's death. Beyond that, it must certify that the farm is still in operation and does not merely exist on paper to collect government checks. The GAO found several egregious breakdowns in verifying claims.
A farm in Illinois, for example, certified every year that a major shareholder was "actively engaged" in the operation - even though the man died in Florida in 1995.
In another case, a farmer died in 1973 and his estate continued to receive payments over the next three decades. No record indicates that the USDA ever tried to verify that the farm was still running.
USDA officials contend that the audit found no clear evidence of fraud or waste, but they have promised to institute reforms. Congress should hold them firmly to that pledge.
As Grassley pointed out, subsidies can be a vital safety net for family farms. But the Department of Agriculture needs to tighten its administration and cut off payments to estates whose sole crop is tax dollars.
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