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GAO, Obama Hit Farm Subsidy Abuse

POSTED: 03:05 PM ET, 11/25/2008 by The Editors

The U.S. Department of Agriculture wrongly paid over $49 million in farm subsidies to ineligible wealthy individuals from 2003 through 2006 because it lacks the management conrols to enforce rules on means testing, according to a newly released Government Accountability Office report.

President-electBarack Obama cited the report today in laying out the need to scrub the federal budget to eliminate wasteful spending.

"Let me just give you one example of what I'm talking about," Obama said in a press conference where he announced his choice for White House budget director. "There's a report today that, from 2003 to 2006, millionaire farmers received $49 million in crop subsidies even though they were earning more than the $2.5 million cutoff for such subsidies. Now, if this is true -- and this was just a report this morning -- but if it's true, it is a prime example of the kind of waste that I intend to end as president."

Wasteful farm program spending was detailed in a two-year Post investigation in 2006 and 2007.

In the study cited by Obama, the GAO found that 2,702 subsidy recipients had adjusted gross income above $2.5 million and derived less than 75 percent of their income from farming - criteria that should have made them ineligible. The IRS provided the GAO with access to the tax returns of the farmers, on the condition that the names would remain private and not be shared with the USDA.

"USDA does not have management controls, such as reviewing an appropriate sample of recipients' tax returns, to verify that payments are made only to individuals who do not exceed income eligibility caps and therefore cannot be assured that millions of dollars in farm program payments it made are proper," GAO concluded.

The recently enacted five-year farm bill sets a tighter means test. It bars farm couples making more than $1.5 million in adjusted gross income from certain farm program payments. Those with more than $1 million in non-farm income could not receive any subsidies. The new farm bill also closed a loophole that had allowed farm families to set up as many as three corporate entities to receive payments.

But GAO said USDA was not set up to enforce the stricter law, raising the possibility that "USDA will make improper payments to more individuals." As many as 23,000 individuals who have received payments in the past will become ineligible under the new farm program, GAO reported.

It also noted that farm families as a group are richer than most Americans. Twelve of every 1,000 individuals receiving farm program payments report adjusted gross income between $500,000 and $1 million. That compares with about four in 1000 for all tax filers.

By The Editors |  November 25, 2008; 3:05 PM ET Harvesting Cash
Previous: Who Killed Marilyn Monroe? | Next: Ex-Interior Official Charged With Fraud

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I cannot speak for the President elect, however, there continues to be a national major dilemma where the Farm Administration through the U.S Department of Agriculture has denied thousands of black farmers their fair subsidy as American Farmers.

Although, never having entered into farming, a British news organization has produced a documentary where a white American, a writer and publicist was funded and produced an excellent film visiting the devastated families who have not survived and a few that have managed meagerly to simply hold on to their land by taking on out-side the farming industry employment simply to keep food on their tables and pay the taxes to keep their properties.

The younger family members are mostly gone away from family farming to find other employment away from the farms that had gainful operations.

Although uncompetitive as farming businesses the U.S.D.A. subsidies appear to singularly award subsidies to mostly rural whites, and medium to large Agra-businesses.

There are and continues to be hundreds if not thousands of American black farmers who are and continue to seek some form of recoupment from the U.S.D.A. for wrongful denial of equitable government support for black farmers.

Respectfully, the President Elect, Mr. Obama having the G.A.O report may some how make a provision to bailout these brave Americans who have contributed to our country and lost, simply by reason of skin color.

Considering that the Bush Administration and the Clinton Administration turned a blind eye to Americans in dire need for government equity, it may become a reality that American black farmers can farm again, if they’ve survived.

Hopefully the President Elect will find a few hundred million dollars of the tax payer "Bail out" the American farmer considering that Treasury has given away billions to General Motors, Ford Motor Company, Chrysler Motors, A.I.G., Fannie Mae, Freddie Mac, Bank of America, and Citi Group to name a few.

Possibly a new Presidential administration can find a few hundred million dollars and settle a wrong that has in one generation destroyed thousands of American family farmers.

It would be a right thing to do.

Posted by: eglobegus | November 26, 2008 3:23 AM

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