Bloomberg: Crop Insurance Subsidies Fleece Taxpayers

Bloomberg has a series out on the federal government’s crop insurance program, which cost taxpayers $14 billion in 2012. The articles, which reveal a textbook example of politicians and special interests teaming up to pilfer taxpayers, should be read in their entirety. 

Taxpayers Turn U.S. Farmers into Fat Cats with Subsidies 

Excerpt: 

Taxpayers are helping farmers pay their bills even as farm income this year is expected to top $120 billion, its highest inflation-adjusted mark since 1973, according to the USDA’s Economic Research Service. Farm income has doubled over the past four years thanks to rising land values and surging exports. 

In 2011, the median income of commercial farm households – those deriving more than half their income from farming – was $84,649, almost 70 percent higher than that of the typical American household. 

Even as manufacturers and retailers struggle to rebound from the recession that ended four years ago, farm equity ended 2012 at $2.5 trillion, up 37 percent since the start of the recession in December 2007 – compared with a less than 1 percent gain in net worth for all U.S. households over the same period.

Fraud Stealing $100 Million Shows Flaws in U.S. Crop Insurance 

Excerpt: 

In recent years, prosecutors have targeted crop insurance fraud in states including California, Florida, Tennessee and Minnesota. Gregory Torlai, 52, a Stockton, California, farmer, was sentenced in 2011 to 30 months in prison after filing $340,000 in false claims, including for lost crops on a rock-and-garbage-strewn lot he tried to pass off as a wheat field. 

In Iowa, soybean farmer Mark Hoffman, 54, drew a 20-month sentence in 2005 and was ordered to repay $2.3 million after involving his wife Susan, 52, and son Justin, 31, in a scheme to cheat the government. An earlier North Carolina case featured a husband-and-wife team that had employees throw ice cubes at their tomato plants and beat them with sticks before filing more than $9 million in phony hail damage claims. Robert Warren, 66, was sentenced in 2005 to a jail term of 76 months; wife Viki, 60, got 66 months. 

Crop Insurers’ $14 Billion Some See as Money Laundering 

Excerpt: 

Former American International Group Inc. chief Maurice “Hank” Greenberg has a new business partner: the U.S. taxpayer. 

Greenberg’s Starr Indemnity & Liability Co. is one of 18 companies approved to get federal cash for insuring farmers against loss of crops or income. Wells Fargo & Co. (WFC), the nation’s fourth-largest bank by assets, Zurich-based Ace Ltd. (ACE) and units of American Financial Group Inc., (AFG) Deere & Co. (DE) and Archer-Daniels-Midland Co. (ADM) all enjoy similar public backing.

My two cents:

Conservative Republicans in the House can’t understand why free market groups won’t support a stand-alone farm subsidy bill that perpetuates this blatant redistribution of taxpayer money to wealthy farmers and insurance companies? Then there’s the hypocrisy: the same conservative Republicans who are a-okay with continuing to fill the troughs of the well-to-do with taxpayer slop are (rightly) pushing for cuts to the food stamps program. 

I can’t think of a better way for the GOP to bolster the left’s contention that Republicans represent “the party of the rich.”