This Farm Subsidy Program Has the Highest Improper Payment Rate
Dominik Lett and Chris Edwards
A new Government Accountability Office (GAO) study examines federal programs with the highest rates of improper payments. The rates are the estimated percentages of benefits paid improperly due to errors or fraud. The Trump administration is cracking down on waste in low-income welfare programs, but the GAO finds that the highest improper payment rate is in the Emergency Conservation Program (ECP)—a subsidy program that mainly benefits high-income farmers.
The ECP is run by the US Department of Agriculture (USDA) and had an improper payment rate of 45 percent in 2024. That means almost half of the $101 million the program spent that year was paid in error or stemmed from fraud. The program is only a small part of $30 billion or more in annual farm subsidies, but it illustrates the government’s lax administration of farm aid that we examined here.
The ECP subsidizes farm and ranch businesses claiming damage from floods, hurricanes, wildfires, and droughts. Like other farm subsidy programs, the payments are likely skewed toward larger and wealthier businesses because the ECP pays a percentage of the damage, with a high cap of $500,000 per event (increased in the 2018 Farm Bill from $200,000). Farm businesses should hold private insurance against such contingencies rather than taking government handouts.
The ECP is layered on top of other USDA programs that pay out billions of dollars to farmers when they face challenges running their businesses. Federal crop insurance subsidies, for example, lavish farmers with about $10 billion a year to cover various claimed misfortunes. We say “claimed” because fraud is a serious problem in the program.
The figure below shows that the ECP improper payment rate soared from 14 percent in 2021 to 45 percent in 2024, according to the GAO. The rising cost of farm subsidies is a scandal, and the 45 percent ECP improper payment rate sets a new standard for waste. Congress should phase out farm subsidies, and the ECP is a good place to start.
Source: https://www.cato.org/blog/farm-subsidy-program-highest-improper-payments
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