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Farm Bill Opens Door to More Subsidy Fraud?

Thursday, June 21, 2012

Today, CNBC.com reported that the U.S. Department of Agriculture encountered significant shortcomings in dealing with fraud in the federal crop insurance program. It pointed out that the newly passed Senate farm bill would open the door for more fraud. The bill, which adds a new layer to the already bloated insurance program to guarantee business income for large farmers, does not have any government protections to prevent fraudulent claims.  The CNBC site reports:

CNBC Investigations Inc. has found that none of the proposals to expand the program would add new measures to combat fraud, even though government auditors have repeatedly warned—even before the proposed expansion—that the Department of Agriculture is not doing enough to deal with crop insurance fraud, which costs taxpayers as much as hundreds of millions of dollars a year.

“Obviously if there’s more money available, there’s going to be more people out there that’s looking for loopholes and schemes to take advantage of that money,” John Brown, a private contractor who helps crack fraud cases, told CNBC. “It’s going to take more people in the field, more agents, more people in the risk management agency, more people on task force, more people with satellites.”

Federal investigators continue to unearth cases of crop insurance fraud. For a list of cases in recent years, go to USDA’s Risk Management Agency website.

Under the new Senate bill, the opportunities for fraud will be even greater since the largest farms will collect even more tax dollars and insurance subsidies will not be subject to means testing, payment limits or transparency.

Table Scraps:

A Washington Post editorial blasts Senate leadership for barring consideration of the Begich-McCain amendment that would have increased transparency in the federal crop insurance program.

Environmental Working Group president Ken Cook released a statement today following the passage of the Senate farm bill.

The Minneapolis Star Tribune penned a piece on the passage of the Durbin-Coburn amendment and the prospects of a similar proposal in the House. "I expect the House to go further to limit crop insurance subsidies," EWG’s Scott Faber told the Tribune.

The Oregonian highlighted the passage of other farm bill amendments that would “increase the availability of healthy food in schools” and “make it easier for organic farmers to enroll in federal crop insurance programs.”

Tweet of the Day:

?@PhilipBrasher Senate passes #farmbill 64-35. Solid South opposed, some NE Dems, fiscal conserv.. Now to you, House Ag.

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