September 11, 2013 2:25PM # Bloomberg: Crop Insurance Subsidies Fleece Taxpayers By [Tad DeHaven](https://www.cato.org/people/tad-dehaven) --- SHARE *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](http://www.bloomberg.com/news/2013-09-09/farmers-boost-revenue-sowing-subsidies-for-crop-insurance.html)” 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](http://www.bloomberg.com/news/2013-09-11/fraud-stealing-100-million-shows-flaws-in-u-s-crop-insurance.html)” 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](http://www.bloomberg.com/news/2013-09-10/crop-insurers-14-billion-some-see-as-money-laundering.html)” 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](http://www.nationaljournal.com/congress/republican-lawmakers-retaliate-against-heritage-foundation-20130828) 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](https://www.cato.org/blog/should-murderers-rapists-get-food-stamps)) 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.” ##### Related Tags [Tax and Budget Policy](https://www.cato.org/tax-budget-policy), [Department of Agriculture](https://www.cato.org/department-agriculture), [Downsizing Government](https://www.cato.org/downsizing-government) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).