This might surprise a few folks, but not everyone receiving farm subsidies is actually a farmer. According to a new report from the Government Accountability Office (GAO), thousands of people with incomes over $500,000 have received $317 million in farm subsidies over five years, including several billionaires.
“Some of the highest income participants received income from operating large farms, but others received some of their income from nonfarming sources, according to our analysis.
“For example, more than 70 of the crop insurance participants we identified as among the highest income during 1 or more years from 2009 through 2013 were managers or professionals, including attorneys, executives, or physicians.
“Four others, who had net worth over $1.5 billion each in 2013, earned their wealth from a variety of sources in addition to farming, such as mining, real estate, sports, and information technology, according to publicly available information.
“Reducing crop insurance subsidies for the highest income participants would have a minimal effect on the program and save millions of dollars. [The USDA’s Risk Management Agency] RMA is directed by law to adopt rates and coverages that will improve the actuarial soundness of the crop insurance program.”
“Also, the highest income participants account for only about 1 percent of the premiums in the program. As a result, their decisions to stay in or leave the program would likely not affect the crop insurance program’s actuarial soundness at the national level. If premium subsidies had been reduced by 15 percentage points for the highest income participants from 2009 through 2013, the federal government would have saved more than $70 million over the 5-year period, according to GAO’s analysis of agency data.
“Those costs are expected to average $8.9 billion per year for fiscal years 2015 through 2024, according to the Congressional Budget Office,” the GAO said.
The U.S. Department of Agriculture’s (USDA) program was originally meant to provide subsidies to cover crop losses and help farmers from going bankrupt.