USDA Could Improve Vetting for Farm Payment Eligibility

The Agriculture Department and Congress need to improve procedures for ensuring annual subsidies through the $5 billion farm payments program go only to eligible recipients, auditors say.

In a report requested by Sen. Chuck Grassley, R-Iowa, the Government Accountability Office found communication gaps in procedures that the Farm Service Agency uses to interview individuals and representatives from entities, such as partnerships, corporations and trusts, to determine how active they are in operations of a farm receiving federal payments.

Under the 1987 Farm Program Payments Integrity Act, an individual is eligible to share in subsidies if he or she makes “significant contributions to that operation in personal labor or active personal management (or both),” GAO noted. “The definition of active personal management in FSA regulations is broad and can be satisfied by an individual performing at least one of eight services representing categories such as supervision of activities necessary in the farming operation.”

Complications arise from the fact that recipients need not live near the farmland or even visit regularly. Agency managers who interview recipients asserted that “it is difficult to measure what constitutes a management contribution and that such a contribution must be critical to the profitability of a farming operation.” The judgment, they said, is “subject to interpretation,” and officials often fail to verify data from interviews.

Some versions of the farm bill in limbo in Congress would limit the number of “managers” of a farm to a single individual.

Auditors faulted the Farm Service Agency for inadequately coordinating and compiling interview results from its far-flung field offices. “With a delayed awareness of several years, FSA cannot reasonably assess the level of recipients' compliance with the act and may be missing opportunities to recapture payments that were made to ineligible recipients,” GAO said. A more systematic timeline and data-gathering process is needed, it said.

The audit also recommended that Congress revisit the issue of who can be defined as an active farmer given the confusion with USDA, to make the criteria for a valid contribution more “clear and objective.”