More on subsidies for dead farmers — in the GAO’s words

Here’s a copy of the Government Accountability Office’s report on large farm subsidy payments made to dead farmers, which was released today at a Senate Finance Committee hearing.

Some of the noteworthy findings:

USDA also cannot be assured that it is not making improper payments to deceased individuals. For 1999 through 2005, USDA paid $1.1 billion in farm payments in the names of 172,801 deceased individuals (either as an individual recipient or as a member of an entity). Of this total, 40 percent went to those who had been dead for 3 or more years, and 19 percent to those dead for 7 or more years. Most of these payments were made to deceased individuals indirectly (i.e., as members of farming entities). For example, over one-half of the $1.1 billion in payments went through entities from 1999 through 2005. In one case, USDA paid a member of an entity— deceased since 1995—over $400,000 in payments for 1999 through 2005.

Here’s more detail on that particular case:

According to FSA’s records, the farming operation consisted of about 1,900 cropland acres producing mostly corn and soybeans. It was organized as a corporation with four shareholders, with the deceased individual owning a 40.3-percent interest in the entity. Nonetheless, we found that the deceased individual had resided in Florida. Another member of this farming operation, who resided in Illinois and had signature authority for the operation, updated the operating plan most recently in 2004 but failed to notify FSA of the individual’s death. The farming operation therefore continued to qualify for farm program payments on behalf of the deceased individual.

As noted earlier, FSA requires farming operations to certify that they will notify FSA of any change in their operation and to provide true and correct information. According to USDA regulations, failure to do so may result in forfeiture of payments and an assessment of a penalty. FSA recognized this problem in December 2006 when the children of the deceased individual contacted the FSA field office to obtain signature authority for the operation. FSA has begun proceedings to collect the improper payments.

Here’s what a witness for the U.S. Department of Agriculture’s Farm Services Agency said in its defense:

First, it is something of a misnomer to describe payments as going to “deceased farmers” in the same manner as people used to joke about dead people voting in Chicago. The statutes passed by Congress recognize that farm payments are really designed to support farming operations rather than individuals. When a family farmer passes away, it is quite often the case that farming operation would continue by the heirs. It would be unfairly disruptive to the operation to have one unfortunate event create an even bigger problem for a farming operation.

Ah, the workings of government — it’s difficult to satirize them.