April 24, 2014

Johanns on USDA crop insurance report: “This is not good” (AUDIO)

A report charges the United States Department of Agriculture made overpayments totaling $20.3 million to 239 farmers in its crop insurance program during the last fiscal year.

Sen. Mike Johanns has read the report issued by the Inspector General of the USDA.

“This is not good,” Johanns tells Nebraska Radio Network. “Money went out the door that shouldn’t go out the door.”

The IG report found that the Federal Crop Insurance Corporation overpayments exceeded, on average, $209,000 per payout.

Overpayments during the last fiscal year far exceeded overpayments in Fiscal Year 2011, when $11.7 million in crop insurance overpayments were made to 143 applicants.

The Inspector General stated better bookkeeping and tighter adherence to reporting guidelines could greatly decrease crop insurance overpayments.

Johanns, who served as Secretary of Agriculture under President George W. Bush, says this has more to do with the size of the agency than anything.

“You know I ran that department for three years. I really do believe the USDA is a well-run department. I’m not being critical of (Secretary of Agriculture) Tom Vilsack at all, but this is what happens with big bureaucracies,” Johanns says.

Johanns doesn’t see the report hurting negotiations on the Farm Bill, which proposes a shift from direct payments to greater reliance on crop insurance. He says he remains committed to ending direct payments in favor of risk management, which would require a bigger role for crop insurance.

Click here to go to full USDA IG report.

AUDIO: Brent Martin reports [:55]