WASHINGTON, D.C. – U.S. Senator Rand Paul today released the newest edition to ‘The Waste Report.’ ‘The Waste Report’ is an ongoing project to catalog egregious examples of wasteful spending throughout the U.S. government.

This week’s edition of ‘The Waste Report,’ exposes a loophole in the U.S. Department of Agriculture’s (USDA) crop insurance program, costing American taxpayers hundreds of millions of dollars. Each year, the USDA pays out on crop insurance claims for “prevented planting” to farmers who cannot plant their crops due to extreme weather. However, exploiting the generality of law, farmers with seasonal wetlands that regularly flood in planting season but dry other times, are raking in approximately $310 million annually in crop insurance payments.

‘The Waste Report’ can be found HERE or below.

The U.S. Department of Agriculture – ‘The Waste Report’

Insurance protects against the rare and unforeseen, not the regular and predictable.  You insure your car against accident, not oil change.

But, when the government is the insurer, this kind of obvious logic does not apply. Surprisingly (or maybe not), the Department of Agriculture (USDA) is paying out hundreds of millions of dollars annually in “prevented planting” crop insurance to farmers who cannot plant their corps in SEASONAL WETLANDS.[1]

At issue is the intersection of the “prevented planting” crop insurance and prairie potholes.  What are prairie potholes?  They are basically ground depressions that fill with water in the rainy spring and dry out in the summer and fall, and are mostly located in the upper-Midwest.  The “prevented planting” program is taxpayer subsidized crop insurance that compensates farmers when extreme weather prevents planting.

The problem is, some farmers claim prevented planting each year for the regular flooding of prairie potholes.[2]  In fact, farmers in sixty-five counties, mostly in the Dakotas, have gotten payouts; 14 years in a row, and in another twenty-nine counties have gotten payments 13 of the last 14 years. In most cases, insurance payments were greater what direct crop subsidies would have been.[3] These farmers are raking in approximately $310 million annually.

No private insurer would stand for this and would either not offer insurance or would control for this kind of abuse. To their credit, the USDA is not complacent in this abuse. Several attempts have been made to close the prairie pothole loophole. As recently as last year, USDA “clarified” rules to effectively prohibit claims four years in a row.[4] But data suggests this new policy could be gamed. At the heart of the problem is that USDA simply does not have a definition of “normal” weather.[5]

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