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Crop Insurance Fraud: Bryon, Not Barack, Killed the Farm Bill

Unwilling to shoulder responsibility for her legislative failure, Congresswoman Kristi Noem is peddling the fantasy that President Barack Obama caused the House to vote down the Farm Bill yesterday:

Noem told reporters that House leaders believed they had enough votes to pass the bill, but Democratic votes fell far short of expectations.

“The president weighed in and really started to lobby the Democrat members against the bill, which I think had a big influence on the final outcome,” Noem said. “In the end, only 24 Democrats voted for the bill. We lost a lot of Democrats we thought were going to support this bill and in the past had supported the farm bill” [Denise Ross, "Noem Blames Obama for Farm Bill Fiasco," Mitchell Daily Republic, 2013.06.21].

Read that again: a Democratic President, taking a beating from Republicans for various scandals and failures, caused the Republican-controlled House to vote down an important piece of legislation by saying he was against it. Does anyone else see an error in that power equation?

The Environmental Working Group lists the top ten reasons the Farm Bill failed. None of them are Barack Obama. But here's #6:

Rejected Crop Insurance Reforms – The measure narrowly rejected reforms and refused to consider other changes that would subject crop insurance subsidies to payment limits, means tests or disclosure requirements [Scott Faber, "Top Ten Reasons the Farm Bill Failed," Environmental Working Group: AgMag Blog, 2013.06.20].

Rep. Kristi Noem and her GOP colleagues made fraud and waste in food stamps a centerpiece of their arguments for the House Farm Bill. Federally subsidized crop insurance is subject to a higher error rate than food stamps:

During a House Agriculture Committee hearing recently, Representative Jim McGovern, Democrat of Massachusetts, offered an amendment to delay cuts to food stamps until the percentage of improper payments in the crop insurance program matched the error and fraud rate for food stamps. The food stamp error rate is 3.8 percent, according to Agriculture Department data, while the rate for the crop insurance program is 4.7 percent. The amendment was defeated, with some Republican lawmakers calling it an attack on farmers [Ron Nixon, "Fraud Used to Frame Farm Bill Debate," New York Times, 2013.06.17].

The Nixon NYT article opens with an example of a conspiracy of dozens of crop insurance agents, farmers, and warehouse workers that tried to defraud the crop insurance program of nearly $100 million. I challenge my readers to submit any example of dozens of food stamp recipients racking up fake bills of that magnitude.

Yet Congresswoman Kristi Noem's Farm Bill tackled the lower rates of fraud in food stamps while ignoring the greater fraud risk in crop insurance.

And who sells crop insurance? Not Barack Obama, but Bryon Noem.

Noem blames everyone but herself for failure of the Farm Bill. She blames hungry poor people for waste and fraud but not people like her husband who sell federally subsidized crop insurance. Do you see the pattern? And do you see why Noem's contradiction—attack the poor, but not my husband—gives people of good conscience on either side of the aisle good reason to vote against Noem's Farm Bill?

Resurrecting the Farm Bill will be hard, but not impossible, says former Indiana Congressman Lee Hamilton. One step toward winning back votes may be some simple goose-and-gander politics: if 3.8% error rate in food stamps warrants cuts, then so does the 4.7% error rate in crop insurance. Conversely, if Bryon's business deserves more federal subsidies, then so does a program that still doesn't reach all of our hungry neighbors.

11 Comments

  1. Owen Reitzel 2013.06.21

    what really killed the bill were amendments to allow states to drug-test food stamp applicants, and to require food stamp recipients to meet federal welfare work requirements. These were added by Republicans a.k.a. Tea party

  2. Joan 2013.06.21

    I agree with this 100%. Other than seniors and the disabled a lot of the food stamps recipients are the working poor. Also a lot of people don't realize the paperwork that the recipients have to fill out. If you are working it is done quarterly. I also know from what happened to a friend of mine several years ago, her case was purely the fault of her food stamp worker, but my friend ended up with her picture in the paper of the town where she lived, because her worker had lost the paperwork my friend turned in, reporting that she had won a case from another state and was now receiving disability. Before the case went any further, the food stamp worker found the lost paper work, but there was never a public apology, for the unnecessary embarrassment to my friend. Therefore, I have always maintained anybody that thinks about committing food stamp fraud is completely wacky.

  3. Jana 2013.06.21

    "Supporters of federal food benefits programs including President George W. Bush understood this, and proved the economic value of SNAP by sanctioning a USDA study that found that $1 in SNAP benefits generates $1.84 in gross domestic product (GDP). Mark Zandi, of Moody's Economy.com, confirmed the economic boost in an independent study that found that every SNAP dollar spent generates $1.73 in real GDP increase. "Expanding food stamps," the study read, "is the most effective way to prime the economy's pump."

    http://www.theatlantic.com/health/archive/2012/07/the-economic-case-for-food-stamps/260015/

  4. caheidelberger Post author | 2013.06.22

    Sha-boom! Well done, Jana! Does anyone have numbers on the economic impact of crop subsidies?

  5. caheidelberger Post author | 2013.06.22

    ...on that line, Yankton Press & Dakotan had an article last March that said in 2012 South Dakota received $1.1 billion in crop insurance payments and got $386 million in economic impact. Nebraska received $1.5 billion and got $780 million in economic impact. "[UNL economist Brad] Lubben told the Press & Dakotan that this occurs for three reasons. First, agricultural producers paid crop insurance premiums for the 2012 growing season, and those amounts must be subtracted. Second, part of the indemnity payments will go toward savings and will not make an immediate impact, he said.... Third, machinery, equipment or household items that are purchased are often not manufactured in the producer’s district or state. 'Those dollars get spent, but those dollars eventually matriculate out of state, so it’s not local economic activity,' Lubben said" [Derek Bartos, "S.D., Nebraska Feel Impact of Crop Insurance," Yankton Press & Dakotan, 2013.03.25].

  6. Charlie Johnson 2013.06.22

    Perhaps we could use the federal crop insurance model to help school districts. We could insure "revenue" for each school district regardless of enrollment using federal taxpayer dollars.

Comments are closed.