Obama: Errant farm subsidy payments are wasteful

by FoodBusinessNews.net Staff
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WASHINGTON — President-elect Barack Obama on Nov. 25 pointed to federal farm program payments made to ineligible individuals as an example of wasteful government spending that will be targeted for elimination under his administration. Mr. Obama made reference to the farm program payments as he introduced his budget team, Peter Orszag, who on confirmation will become director of the Office of Management and Budget, and Robert Nabors, who will become the G.A.O.’s deputy director.

"There’s a report out 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," Mr. Obama said. "If this is true, it is a prime example of the kind of waste I intend to end as president."

The president-elect was referring to a report issued by the Government Accountability Office that asserted from 2003 through 2006, 2,702 individuals received $49 million in farm program payments for which they were not eligible because their incomes were too high. Under the 2002 farm act, which was in effect during the period under review, individuals making more than $2.5 million a year and deriving less than 75% of their incomes from farming, ranching or forestry activities, were declared ineligible to receive federal farm payments.

The Farm Service Agency of the U.S. Department of Agriculture didn’t dispute the G.A.O.’s findings but complained G.A.O. investigators had access to individuals’ tax information the U.S.D.A. was not permitted to see and the department didn’t have the resources or staff to examine tax records from 1.8 million recipients of farm program payments. The G.A.O. recommended the U.S.D.A. work with the Internal Revenue Service to develop a system for verifying the income eligibility of all recipients of farm programs.

The G.A.O. didn’t identify by name the individuals receiving the payments in question but indicated among them were insurance company owners and executives, investors in sports teams and a number of individuals living abroad.

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