What About Farm Subsidy Fraud?

Thursday, February 26, 2015

Based on this week’s House Agriculture Committee hearings, you might think it’s the food stamp program – and not the heavily subsidized farm subsidy program – that is plagued by fraud and abuse.

You’d have it exactly backwards.

While the “error rate” for the U.S. Department of Agriculture food stamp program has reached a record low, the “error rate” for the crop insurance program has increased for three straight years.

The USDA Inspector General’s audit, released last year, estimated that the crop insurance program’s error rate for improper payments was at least 5.23 percent in 2013 and could be higher. The 2013 error rate was significantly higher than the 2012 error rate of 4.08 percent.

Earlier this month, USDA’s Risk Management Agency reported that the improper payment rate for crop insurance rose to 5.58 last year and was expected to stay above 5 percent through 2016.

As EWG has previously reported, government prosecutions for crop insurance fraud have proliferated as the program has expanded. One farmer even used ice cubes to fake a hailstorm.

By contrast, the error rate for the Supplemental Nutrition Assistance Program, or SNAP, the formal name of the food stamp program. fell to an all-time low of 3.2 percent in 2013, according to the Center on Budget and Policy Priorities.

As CBPP recently reported:

The percentage of SNAP benefit dollars issued to ineligible households or to eligible households in excessive amounts fell for the seventh consecutive year in 2013 to 2.61 percent. That’s the lowest national overpayment rate since USDA began the current system of measuring error rates in 1981.  The underpayment error rate fell to 0.6 percent, also the lowest on record. The combined payment error rate — that is, the sum of the overpayment and underpayment error rates — fell to an all-time low of 3.2 percent. Less than 1 percent of SNAP benefits go to households that are ineligible.  In other words, more than 99 percent of SNAP benefits are issued to eligible households. 

As EWG has previously noted, the House Agriculture Committee has refused to hold even one hearing on farm subsidy fraud.

Could it be that the Republican legislators leading hearings on SNAP represent districts where the farmers are among the most heavily subsidized in the U.S.? Farmers in the district represented by Ag committee chairman Michael Conaway (R-Tex.) collected at least $2 billion in subsidies between 1995 and 2012.

Ironically, these legislators “worry” that SNAP has “morphed” from a program designed to feed hungry people during times of need to an income support program. This is ironic, of course, because farm subsidy programs are, by definition, designed to support farm income.

And while the average SNAP recipient collects food assistance for less than a year, farm subsidy recipients typically collect farm subsidies forever.  Until recently, some dead farmers were still receiving subsidies.

Like Rep. Jim McGovern (D-Mass.), we’re surprised that the committee chose to subject SNAP to a “top to bottom” review – and not farm subsidies. 

Now that we know that farm subsidies expanded in the 2014 farm bill and already cost billions more than advertised, shouldn’t they be subject to same level of scrutiny?


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