The federal government paid out $10 billion in direct farm payments over the past decade to farmers who in a given year didn’t grow the crop they were being paid to grow, according to a government audit released Tuesday.
Worse still, 2,300 farms that received federal taxpayer money didn’t grow any crops for five continuous years on land they were being paid for, according to the report by the Government Accountability Office, which comes as Congress is debating the latest version of the farm bill.
The system, known as “direct payments,” was created in the 1990s as a temporary measure to try to wean farmers off government subsidies, but it turned into a permanent support in the past decade. The payments are just one category of federal subsidies to support farmers.
Now, a backlash is brewing — so much so that the Senate’s version of the farm bill would cancel direct payments. The House is working on its own version of the bill, but all sides seem to agree the direct-payment system has run its course.
GAO said $10.6 billion between 2003 and 2011 — more than one-quarter of all direct farm payments — went to farmers who didn’t plant the crop they were paid to farm in a particular year on that land. That is legal, GAO said, but the auditors said it called into question whether the program was the right way to meet Congress‘ goals of supporting farmers and producing a stable food supply.
“Maintaining a safety net for farmers is worthwhile, but during times of record-high crop prices and farm incomes, providing payments that do not align with principles significant to integrity, effectiveness, and efficiency in farm bill programs raises questions about the continued need for direct payments,” the investigators said in their audit.
In a bruising and blunt assessment, GAO said the direct-payment system is failing to meet the goals Congress set for it, doesn’t target benefits to the right farmers, has grown unaffordable for taxpayers and lacks controls to prevent bad payments.
Some people are collecting payments for land they’ve converted into non-farm uses, though the government doesn’t have a solid program from checking on that. In fact, in 2008, 1.8 million farms got direct payments, just 403 were selected for a review by the administration — or 1 out of every 2,500 farms. As of five months ago, nearly one-quarter of those reviews had not been completed.
Officials couldn’t tell the auditors how many cases of fraud or abuse they have passed on for prosecution, and the government rarely tries to recover bad payments from the farmers, the auditors said.
One tool the government has is to reduce future payments for bad actors. But in 2011, the government reported levying just $3,393 in reductions — a minuscule amount compared to the billions of dollars paid out by the program.
The Agriculture Department disputed some of the auditors’ findings, including saying that sampling 0.04 percent of farmers to make sure they are maintaining farmland was an acceptable control.
“USDA considers that its current processes are adequate,” Bruce Nelson, Farm Service Agency administrator, said in his official response to the report. “FSA selects a statistical sample of producers for spot checking to determine that all land reported as cropland on the farm remained in cropland status for the year the spot check was conducted.”
He said state and local officials also can select any property they want for spot checks.