• If you are having problems logging in please use the Contact Us in the lower right hand corner of the forum page for assistance.

USDA Absolutely Inept?

Mike

Well-known member
Deceased Farmers Got USDA Payments
Study Faults Lack Of Case Reviews

By Sarah Cohen
Washington Post Staff Writer
Monday, July 23, 2007; Page A01

The U.S. Department of Agriculture distributed $1.1 billion over seven years to the estates or companies of deceased farmers and routinely failed to conduct reviews required to ensure that the payments were properly made, according to a government report.

In a selection of 181 cases from 1999 to 2005, the Government Accountability Office found that officials approved payments without any review 40 percent of the time.

The report cited a 1,900-acre soybean and corn farm in Illinois that collected $400,000 on behalf of an owner who lived in Florida before his death in 1995. The company did not notify the government of the death but certified each year that the dead shareholder, who owned 40 percent of the company, was "actively engaged" in managing the farm.

Most estates are allowed to collect farm payments for up to two years after an owner's death, giving heirs time to restructure their businesses and probate the will. After that, local USDA officials must certify every year that the estate is still farming and has remained open for reasons other than simply collecting subsidies.

But the GAO report found that the Agriculture Department depends on heirs and businesses to alert the agency to deaths and does not use other sources, such as Social Security records, to confirm eligibility. The report was prepared at the request of Sen. Charles E. Grassley (R-Iowa), a frequent critic of large subsidies to wealthy farms. It is expected to be publicly released Tuesday at a Senate Finance Committee hearing.

"Farm payments are meant for those who need some help getting through the tough times," Grassley said last week. "Clearly there are loopholes that should be closed and laws that need to be followed."

In a letter responding to the GAO report, the Agriculture Department said that the payments were not necessarily examples of fraud or abuse and that auditors did not prove any specific cases of cheating. The department's field offices defended the practice of routinely paying dead farmers' estates without fully investigating the claims, citing staff shortages and competing priorities. The agency also said that any overpayments would amount to less than 1 percent of farm subsidies paid between 1999 and 2005.

GAO auditors found that in addition to the 40 percent of cases not reviewed by the USDA, 38 percent had "weaknesses," including "nonexistent or vague" documentation. The GAO said it could not determine from its examination whether the government improperly overpaid the estates or how much any excess might be.

An Indiana corporation that was owned entirely by one person never notified the government of the owner's death in 1993 and continued to collect unspecified payments for a decade before new owners filed for farm benefits. The government made $567,000 in payments to an Alabama estate over seven years on behalf of an owner who died in 1981. Another estate continued to receive unspecified payments on behalf of a person who died in 1973 -- more than three decades ago -- without any investigation or review.

The GAO said it found that five executors of estates had simply told the government they wanted to keep the estates open, without further explanation. Local officials in one Georgia county, in one action during a routine meeting without any investigation, approved payments for 107 people who had died more than two years earlier. GAO auditors found 10 additional cases in which subsidies were "approved for payments without any indication that even a cursory review had been conducted."

Making database checks against a list of people reported as dead to the Social Security Administration "to verify that an individual receiving farm payments has not died is a simple, cost-effective method," the GAO said. The Agriculture Department said it has asked all field offices to review the eligibility of estates and plans to begin conducting database checks.

The GAO report said that, in some cases, people who had reached the annual limit on farm subsidies of $360,000 to an individual were able to collect additional money as a beneficiary of an estate.

In its response, the Agriculture Department acknowledged that large farming operations, often formed by members of an extended family, could exceed the payment limits by keeping an estate active years after a death.

The report follows a 2004 GAO study for Grassley highlighting loopholes in the payment limits. That report found that large farming operations, organized into webs of partnerships and corporations, can legally collect far more than the $360,000 limit. More than two-thirds of the $1.1 billion in payments to estates and companies of dead people went through such entities.

Grassley plans to ask the Internal Revenue Service to investigate whether corporations and partnerships that do not inform farm programs of deaths are paying enough in taxes. Estates are taxed at a higher rate than some businesses. The senator also wants to know whether the IRS was similarly unaware of the deaths.

Grassley said that "those who might be willing to game the USDA and the federal Treasury" would get an unfair tax advantage.

Last year, a Washington Post investigation of farm subsidies found more than $15 billion in wasteful or redundant spending in other farm payments, including $1.3 billion to people who do not farm and $817 million to farms that use loopholes to exceed limits.
 

Kato

Well-known member
The government made $567,000 in payments to an Alabama estate over seven years

My calculator figures that's $81,000 per year. Wow! Exactly how much does your government hand out as a rule? Is this an unusually large amount? Or is this typical?

Not trying to start a fight. Just trying to understand how this works in your country.

No wonder the article I read the other day said that American farmers are carrrying significantly less debt than Canadian farmers. :shock:
 

Mike

Well-known member
Kato said:
The government made $567,000 in payments to an Alabama estate over seven years

My calculator figures that's $81,000 per year. Wow! Exactly how much does your government hand out as a rule? Is this an unusually large amount? Or is this typical?

Not trying to start a fight. Just trying to understand how this works in your country.

No wonder the article I read the other day said that American farmers are carrrying significantly less debt than Canadian farmers. :shock:

Here's one just down the road from me:

http://farm.ewg.org/farm/persondetail.php?custnumber=009232767
 

Bill

Well-known member
This is interesting

http://farm.ewg.org/farm/farms_by_state.php

looks like Texas gets its fair share of time at the gov't trough.

Here's another with a percent of US farms/ranches that are recieving subsidies.

Take a look at Nebraska, the Dakotas and the independent :lol: state of Montanastan (according to OVI they don't need no Federal gov't..shirt tails....blah....blah......blah) then compare them to California. I thought we were always told the fruit and vegetable growers recieved the largest piece of the plum pie. :roll:
 

Sandhusker

Well-known member
Bill, " I thought we were always told the fruit and vegetable growers recieved the largest piece of the plum pie."

Who always told you that?
 

Mike

Well-known member
I thought we were always told the fruit and vegetable growers recieved the largest piece of the plum pie.

It's always been grain/cotton farmers. By a LARGE margin.

Cattle producers only get what's left over. :mad:
 

Kato

Well-known member
It doesn look like cotton gets treated very well. Is that a large farm? I can't even imaging getting cheques like that. :shock:

The program we have here is a whole farm program that is based on margins. They set a margin that is decided by using the average qualifying income over the past five years with the high and low years dropped. They will top it up to this margin. The margin only includes direct expenses and income. Things like rent, interest, utilities, and custom work are not included in expenses, and any previous government money is not included in income. Then it's all adjusted to an accrual basis using inventories.

The net result is that if you have a string of bad years, the margin gets smaller and smaller until it's so low it's useless. We've been told there are going to be improvements, but I'll believe that when I see it. :?
 

Bill

Well-known member
Sandhusker said:
Bill, " I thought we were always told the fruit and vegetable growers recieved the largest piece of the plum pie."

Who always told you that?

Other Americans.
 

Ben Roberts

Well-known member
Mike said:
I thought we were always told the fruit and vegetable growers recieved the largest piece of the plum pie.

It's always been grain/cotton farmers. By a LARGE margin.

Cattle producers only get what's left over. :mad:

Mike, because of the grain subsidies, cattle producers were able to buy cheeper corn. Or is that just a left over? Although a large percentage of that grain fed to cattle, was while the cattle were in the hands of the multi-national corporations.

Best Regards
Ben Roberts
 

MoGal

Well-known member
Don't know how this farm go could broke either:

http://farm.ewg.org/farm/persondetail.php?custnumber=009519413

unbelievable to get 25 mil in a ten year period
 

Mike

Well-known member
Ben Roberts said:
Mike said:
I thought we were always told the fruit and vegetable growers recieved the largest piece of the plum pie.

It's always been grain/cotton farmers. By a LARGE margin.

Cattle producers only get what's left over. :mad:

Mike, because of the grain subsidies, cattle producers were able to buy cheeper corn. Or is that just a left over? Although a large percentage of that grain fed to cattle, was while the cattle were in the hands of the multi-national corporations.

Best Regards
Ben Roberts

That grain fed to cattle is definitely a left over. Left over from what Cargill and ADM had to sell back to them.
 

Ben Roberts

Well-known member
Mike said:
Ben Roberts said:
Mike said:
It's always been grain/cotton farmers. By a LARGE margin.

Cattle producers only get what's left over. :mad:

Mike, because of the grain subsidies, cattle producers were able to buy cheeper corn. Or is that just a left over? Although a large percentage of that grain fed to cattle, was while the cattle were in the hands of the multi-national corporations.

Best Regards
Ben Roberts

That grain fed to cattle is definitely a left over. Left over from what Cargill and ADM had to sell back to them.


My point was, grain subsidies to row crop farmers, has allowed grain prices to remain lower than they would have been= lower feed cost to the cattle producers.

Best Regards
Ben Roberts
 

Mike

Well-known member
My point was, grain subsidies to row crop farmers, has allowed grain prices to remain lower than they would have been= lower feed cost to the cattle producers.

Best Regards
Ben Roberts

Since the largest portion of calves by far are sold at weaning, looks like the producers may have benefitted some, but it seems like the feedlots/packers and the public is the main beneficiary of the subsidies to me.

Just by keeping the cost of fats down.
 

Bill

Well-known member
Mike said:
My point was, grain subsidies to row crop farmers, has allowed grain prices to remain lower than they would have been= lower feed cost to the cattle producers.

Best Regards
Ben Roberts

Since the largest portion of calves by far are sold at weaning, looks like the producers may have benefitted some, but it seems like the feedlots/packers and the public is the main beneficiary of the subsidies to me.

Just by keeping the cost of fats down.

Boy it sure must be different down there. :roll:

Up here the years of cheap and plentiful feed means the feedlots pay more for calves which has little to do with the price of fats or retail.

Lower feed price due to more production translates into more money to spend on calves.
 

Ben Roberts

Well-known member
Bill wrote-"I thought we were always told the fruit and vegetable growers recieved the largest piece of the plum pie."

Mike wrote-"It's always been grain/cotton farmers. By a LARGE margin.

Cattle producers only get what's left over."


Mike, cattlemen in general, have always believed they were getting the short end of the stick when it came to government subsidies. Read your post, is that not what you are implying here? Just because, the cattlemen don't get a check from the government, doesn't imply they don't benefit from those subsidies. I've listened to cattle producers bitch about this for years, when they don't see the cash in their hand, they can't see that are benefiting from those subsidies by having lower priced grain (feed cost) now when the producers, don't take advantage of that lower cost, has no relevance to the point that i'm trying to make to you.

Best Regards
Ben Roberts
 

IL Rancher

Well-known member
Bill" Boy it sure must be different down there. :roll: Up here the years of cheap and plentiful feed means the feedlots pay more for calves which has little to do with the price of fats or retail. Lower feed price due to more production translates into more money to spend on calves.[/quote said:
Prime example down here would have been last fall, corn raced from 1.60 or so a bushell local to 3 bucks+ a bushel local and calf prices droped by 20 cents a pound.. Pretty direct corelation.. Corn is taking a beating now and calf prices are racing back up, have had some intersting offers for my calves already.


MOst of the farm checks are skewed by some real big companies and farms... Cotton, Rice, corn and the other grains do darn well for themselves.. There are so many different programs included in there with the basic CCP and direct payments, not to mention the Loan Deficany ones.. It gets crazy.. This year you will see a lot of amounts of payments dip as LDP's and CCP's probably won't be happening with the grain prices well over the LDP levels... I suppose the Counter Cyclical payments could get triped but I doubt it..
 

Mike

Well-known member
Ben Roberts said:
Bill wrote-"I thought we were always told the fruit and vegetable growers recieved the largest piece of the plum pie."

Mike wrote-"It's always been grain/cotton farmers. By a LARGE margin.

Cattle producers only get what's left over."


Mike, cattlemen in general, have always believed they were getting the short end of the stick when it came to government subsidies. Read your post, is that not what you are implying here? Just because, the cattlemen don't get a check from the government, doesn't imply they don't benefit from those subsidies. I've listened to cattle producers bitch about this for years, when they don't see the cash in their hand, they can't see that are benefiting from those subsidies by having lower priced grain (feed cost) now when the producers, don't take advantage of that lower cost, has no relevance to the point that i'm trying to make to you.

Best Regards
Ben Roberts
I have never said cattlemen don't get a trickle-down effect from subsidies.
If you'll read my statement, it says, "we get the leftovers".

It still doesn't add up to what some grain farmers get each year in cold hard cash.

But the benefits in a round about way, are meant to be beneficial to consumers and are a cheap food policy, thus holding the price of beef down for them and the price of cattle down for us.

We are agreeing to disagree here.
 

Maple Leaf Angus

Well-known member
Mike said:
Ben Roberts said:
Bill wrote-"I thought we were always told the fruit and vegetable growers recieved the largest piece of the plum pie."

Mike wrote-"It's always been grain/cotton farmers. By a LARGE margin.

Cattle producers only get what's left over."


Mike, cattlemen in general, have always believed they were getting the short end of the stick when it came to government subsidies. Read your post, is that not what you are implying here? Just because, the cattlemen don't get a check from the government, doesn't imply they don't benefit from those subsidies. I've listened to cattle producers bitch about this for years, when they don't see the cash in their hand, they can't see that are benefiting from those subsidies by having lower priced grain (feed cost) now when the producers, don't take advantage of that lower cost, has no relevance to the point that i'm trying to make to you.

Best Regards
Ben Roberts
I have never said cattlemen don't get a trickle-down effect from subsidies.
If you'll read my statement, it says, "we get the leftovers".

It still doesn't add up to what some grain farmers get each year in cold hard cash.

But the benefits in a round about way, are meant to be beneficial to consumers and are a cheap food policy, thus holding the price of beef down for them and the price of cattle down for us.

We are agreeing to disagree here.

Before too many more years, these arguments may all be redundant. I read an article this morning which crunched the numbers for food/fiber production compared to the rising demand due to population growth and the demand from the energy sector.

China and India are already the biggest driving force in setting the demand/price for raw materials and commodities. The population of the West is tiny compared to that of Asia, and Asia is growing far faster than the rise in resource production.

Not only is their population growing rapidly, they are expecting a bigger piece of the pie because of their burgeoning economy. They have money to spend. Who can tell what will come of these changing dynamics.
 

RobertMac

Well-known member
Having been on both sides of this, let me explain something. Government payments are always figured into a production loan as income(right Sandhusker?)...so the producer is still operating on the same margin. What these government checks do is provide some financial security for the lending industry and a cheap, tax payer subsided raw product for the corporations that use them. Consumers are actually paying more for their food, they just don't see it a the grocery store.
 
Top