CROP INSURANCE

Savings Would Result 

from Program 

Changes and Greater 

Use of Data Mining

Report to the Ranking Member, 

Permanent Subcommittee on 

Investigations, Committee on 

Homeland Security and Governmental 

Affairs, U.S. Senate

March 2012

GAO-12-256

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-256, a report to the 

Ranking Member, Permanent Subcommittee 

on Investigations, Committee on Homeland 

Security and Governmental Affairs, U.S. 

Senate

March 2012

CROP INSURANCE

Savings Would Result from Program Changes and 

Greater Use of Data Mining

Why GAO Did This Study

The U.S. Department of Agriculture 

(USDA) administers the federal crop 

insurance program with private 

insurance companies. In 2011, the 

program provided about $113 billion in 

insurance coverage for over 1 million 

policies. Program costs include 

subsidies to pay for part of farmers’ 

premiums. According to the 

Congressional Budget Office, for fiscal 

years 2013 through 2022, the program 

costs—primarily premium subsidies—

will average $8.9 billion annually. 

GAO determined the (1) effect on 

program costs of applying limits on 

farmers’ premium subsidies, as 

payment limits are set for other farm 

programs, and (2) extent to which 

USDA uses key data mining tools to 

prevent and detect fraud, waste, and 

abuse in the program. GAO analyzed 

USDA data, reviewed economic 

studies, and interviewed USDA 

officials.

What GAO Recommends

To reduce crop insurance program 

costs, Congress should consider 

limiting premium subsidies for 

individual farmers, reducing subsidies 

for all farmers, or both. GAO also 

recommends, in part, that USDA 

encourage the completion of field 

inspections. In commenting on a report 

draft, USDA did not agree that 

Congress should consider limiting 

premium subsidies, but GAO believes 

that when farm income is at a record 

high and the nation faces severe fiscal 

problems, limiting premium subsidies is 

an appropriate area for consideration. 

USDA agreed with encouraging the 

completion of field inspections.

What GAO Found

If a limit of $40,000 had been applied to individual farmers’ crop insurance 

premium subsidies, as it is for other farm programs, the federal government 

would have saved up to $1 billion in crop insurance program costs in 2011, 

according to GAO’s analysis of U.S. Department of Agriculture (USDA) data. 

GAO selected $40,000 as an example of a potential subsidy limit because it is 

the limit for direct payments, which provide fixed annual payments to farmers 

based on a farm’s crop production history. Had such a limit been applied in 2011, 

it would have affected up to 3.9 percent of all participating farmers, who 

accounted for about one-third of all premium subsidies and were primarily 

associated with large farms. For example, one of these farmers insured crops in 

eight counties and received about $1.3 million in premium subsidies. Had 

premium subsidies been reduced by 10 percentage points for all farmers 

participating in the program, as recent studies have proposed, the federal 

government would have saved about $1.2 billion in 2011. A decision to limit or 

reduce premium subsidies raises other considerations, such as the potential 

effect on the financial condition of large farms and on program participation.

Since 2001, USDA has used data mining tools to prevent and detect fraud, 

waste, and abuse by either farmers or insurance agents and adjusters but has 

not maximized the use of these tools to realize potential additional savings. This 

is largely because of competing compliance review priorities, according to GAO’s 

analysis. USDA’s Risk Management Agency (RMA), which is responsible for 

overseeing the integrity of the crop insurance program, has used data mining to 

identify farmers who received claim payments that are higher or more frequent 

than others in the same area. USDA informs these farmers that at least one of 

their fields will be inspected during the coming growing season. RMA officials told 

GAO that this action has substantially reduced total claims. The value of 

identifying these farmers may be reduced, however, by the fact that USDA’s 

Farm Service Agency (FSA)—which conducts field inspections for RMA—does 

not complete all such inspections, and neither FSA nor RMA has a process to 

ensure that the results of all inspections are accurately reported. For example, 

RMA did not obtain field inspection results for about 20 percent and 28 percent of 

these farmers, respectively, in 2009 and 2010. As a result, not all of the farmers 

RMA identified were subject to a review, increasing the likelihood that fraud, 

waste, or abuse occurred without detection. Field inspections were not 

completed, in part because FSA state offices are not required to monitor the 

completion of such inspections. In addition, RMA generally does not provide 

insurance companies with FSA inspection results when crops are found to be in 

good condition, although USDA’s Inspector General has reported this information 

may be important for followup. Past cases have revealed that some farmers may 

harvest a high-yielding crop, hide its sale, and report a loss to receive an 

insurance payment. Furthermore, RMA has not directed insurance companies to 

review the results of all completed FSA field inspections before paying claims 

that are filed after inspections show a crop is in good condition. As a result, 

insurance companies may not have information that could help them identify 

View GAO-12-256. For more information, claims that should be denied.

contact Lisa Shames at (202) 512-3841 or 

shamesl@gao.gov.
Page i GAO-12-256 Crop Insurance

Letter 1 

Background 4

A Limit on Crop Insurance Subsidies Would Lower Program Costs 14

RMA Has Not Maximized the Use of Data Mining Tools, Largely 

Because of Competing Priorities 25

Conclusions 35

Matter for Congressional Consideration 36

Recommendations for Executive Action 36

Agency Comments and Our Evaluation 37

Appendix I Objectives, Scope, and Methodology 40

Appendix II Income and Payment Limits for Selected Farm Programs 43

Appendix III Locations of Participating Farmers Receiving More than $40,000 in 

Premium Subsidies, 2011 44

Appendix IV Information on the Levels of Premium Subsidies and Administrative

Expense Subsidies for Individual Farmers 46

Appendix V Comments from the U.S. Department of Agriculture 47

Appendix VI GAO Contact and Staff Acknowledgments 57

Related GAO Products 58

Contents
Page ii GAO-12-256 Crop Insurance

Tables

Table 1: Premium Subsidies and Administrative Expense Subsidies, 

2000 through 2011 8

Table 2: Number of RMA Requests for FSA Field Inspections and 

Percentage of Inspections Completed for Selected States 

in 2009 and 2010 27

Figures

Figure 1: Financial Relationships among the Federal Government, 

Private Insurance Companies, Agents, and Farmers 6

Figure 2: Levels of Premium Subsidies that Individual Farmers 

Received in 2010 16

Figure 3: Levels of Premium Subsidies that Individual Farmers 

Received in 2011 16

Figure 4: Percentage of Participating Farmers and Value of 

Premium Subsidies by Individual Farmers Receiving 

Subsidies of $40,000 or Less, or More than $40,000 in 2010 18

Figure 5: Percentage of Participating Farmers and Value of 

Premium Subsidies, by Individual Farmers Receiving 

Subsidies of $40,000 or Less, or More than $40,000 in 2011 19

Figure 6: Locations of Participating Farmers Receiving Premium 

Subsidies of More Than $40,000, 2011 45

Abbreviations

ARPA Agricultural Risk Protection Act of 2000

FSA Farm Service Agency

RMA Risk Management Agency

SRA Standard reinsurance agreement

USDA U.S. Department of Agriculture

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Page 1 GAO-12-256 Crop Insurance

United States Government Accountability Office

Washington, DC 20548

March 13, 2012

The Honorable Tom Coburn

Ranking Member

Permanent Subcommittee on Investigations

Committee on Homeland Security and Governmental Affairs

United States Senate

Dear Dr. Coburn:

Federally subsidized crop insurance, which farmers can purchase to help 

manage the risk inherent in farming, has become one of the most 

important programs in the farm safety net. Under the federal crop 

insurance program, farmers can choose various levels and types of 

insurance protection: they can insure against losses caused by poor crop 

yields, declines in crop prices, or both, for each insurable crop they 

produce. In 2011, the crop insurance program provided about $113 billion 

in insurance coverage for about 264 million acres of farmland, for over 1.1 

million policies. The federal government’s crop insurance costs include 

subsidies to pay for (1) part of a farmer’s crop insurance premiums, which 

averaged about 62 percent of the total premiums in 2011, and (2) 

administrative and operating expenses (administrative expenses)—

provided on behalf of farmers—to insurance companies to cover their 

expenses for selling and servicing crop insurance policies. The amount of 

subsidies—for premiums and administrative expenses—is not limited for 

individuals or legal entities.

The Congressional Budget Office estimates that, for fiscal years 2013 

through 2022, the federal government’s crop insurance costs will average 

$8.9 billion per year. The cost of the federal crop insurance program has 

come under increased scrutiny because of the nation’s budgetary 

pressures, particularly when farm income is at record-high levels. For 

2011, the U.S. Department of Agriculture (USDA) reported that 2011 net 

farm income was a record $98.1 billion. For 2012, USDA estimates that 

net farm income will decline to $91.7 billion—still the second highest level 

on record. In addition, according to USDA, the top 5 earnings years for 

the past 3 decades have occurred since 2004, attesting to the recent 

profitability of farming. Furthermore, farmland values, another measure of 

farm prosperity, increased by 85 percent from 2003 through 2011.

We and others have reported over the years on the risks for fraud, waste, 

and abuse in the crop insurance program and recommended ways to 

 
 

Page 2 GAO-12-256 Crop Insurance

minimize these risks, including examining data on crop insurance claims 

to identify potential abuses.1 For example, in 2005, we reported on crop 

insurance fraud cases investigated by USDA that resulted in criminal 

prosecutions.2 These cases showed that the farmers, sometimes in 

collusion with insurance agents and others, falsely claimed weather 

damage and low production to receive crop insurance payments. Several 

of these cases also demonstrated the importance of having USDA’s Farm 

Service Agency (FSA), which administers many farm programs, and Risk 

Management Agency (RMA), which administers the federal crop 

insurance program, work together to identify and share information on 

questionable farming practices and activities.3 In part to improve 

compliance with, and the integrity of, the crop insurance program, 

Congress enacted the Agricultural Risk Protection Act of 2000 (ARPA).4

 

1

GAO, Crop Insurance: Actions Needed to Reduce Program’s Vulnerability to Fraud, 

Waste, and Abuse, 

This act provided RMA and FSA with new tools for monitoring and 

controlling program abuses. Among other things, it required the Secretary 

of Agriculture to use data mining—a technique for extracting knowledge 

from large volumes of data—to administer and enforce the crop insurance 

program. Following USDA’s written procedures, developed pursuant to a 

requirement in ARPA, RMA provides FSA with a list of farmers who have 

received payments for anomalous claims—that is, claims that are higher 

or more frequent than others in the same area and that match RMA 

scenarios of fraud, waste, or abuse. Under the written procedures, staff in 

FSA county offices are to inspect the fields of the listed farmers and 

report the inspection results to RMA.

GAO-05-528 (Washington, D.C.: Sept. 30, 2005); GAO, Crop 

Insurance: Opportunities Exist to Reduce the Cost of Administering the Program, 

GAO-09-445 (Washington, D.C.: Apr. 29, 2009); GAO, Crop Insurance: More Needs to 

Be Done to Reduce Program’s Vulnerability to Fraud, Waste, and Abuse, GAO-06-878T

(Washington, D.C.: June 15, 2006); and U.S. Department of Agriculture Office of the 

Inspector General, Risk Management Agency Compliance Activities, No. 05601-11-At 

(Washington, D.C: Sept. 16, 2009). 

2

GAO-05-528. 

3

FSA, which has an extensive field office structure, is generally responsible for helping 

farmers enroll in agricultural support programs, overseeing these programs, and issuing 

program payments.

4

The Agricultural Risk Protection Act of 2000, Pub. L. No. 106-224, 114 Stat. 358, 

amended the Federal Crop Insurance Act . 
 

Page 3 GAO-12-256 Crop Insurance

USDA also administers an array of other farm programs to support farm 

income, assist farmers after disasters, and conserve natural resources. 

Unlike the crop insurance program, these other farm programs generally 

have statutory income and payment limits that apply to individual farmers 

and legal entities, including corporations, estates, and trusts. For 

example, USDA provides about $5 billion in fixed annual payments—

called direct payments—to farmers based on a farm’s crop production 

history. However, a person or legal entity with an average adjusted gross 

farm income (over the preceding 3 tax years) exceeding $750,000 is 

generally ineligible for direct payments. In addition, for direct payments, 

the annual payment is generally no more than $40,000 per person or 

legal entity. In anticipation of the next farm bill, farm groups have made 

proposals that would result in having crop insurance become the 

centerpiece of the federal farm safety net, with support through traditional 

commodity programs playing a significantly reduced role.

In this context, you asked us to identify additional opportunities for 

reducing the cost of the crop insurance program. Our objectives were to 

determine (1) the effect on program costs of applying limits on farmers’ 

federal crop insurance subsidies, as payment limits are applied to other 

farm programs, and (2) the extent to which USDA has used key data 

mining tools to prevent and detect fraud, waste, and abuse in the crop 

insurance program.

To address the first objective, we reviewed eligibility standards, such as 

adjusted gross income limits and payment limits, in the provisions of the 

Food, Conservation, and Energy Act of 2008 (2008 farm bill); other 

statutes; and USDA regulations. We also interviewed FSA and RMA 

officials regarding eligibility standards and payment limits. To determine 

the distribution of crop insurance subsidies among farmers who 

participate in the program, we analyzed RMA data for 2010 and 2011 on 

the number and percentage of farmers receiving various levels of 

subsidies and the locations of farmers who received higher subsidies. We 

selected $40,000 as an example of a potential subsidy limit because it is 

the payment limit for direct payments, which is one of the largest 

components of the farm safety net. We also reviewed USDA and others’ 

studies that examined participation in the crop insurance program and 

premium subsidies. In addition, we reviewed USDA data on the financial 

condition of farms of different sizes. To address the second objective, we 

interviewed officials at RMA headquarters and RMA’s six regional 

compliance offices to determine RMA’s current uses of data mining 

results, including data mining related to farmers with anomalous claim 

payments, as well as insurance agents and adjusters who had anomalous 
 

Page 4 GAO-12-256 Crop Insurance

losses in comparison with their peers in the same geographic area. In 

addition, we analyzed 2009 and 2010 data on FSA’s completion of field 

inspections, pursuant to RMA’s data mining list of farmers with 

anomalous claim payments. We also interviewed officials at FSA 

headquarters and five FSA state offices—California, Colorado, Florida, 

North Dakota, and Texas—to obtain information about field inspection 

processes and obstacles to the completion of these inspections. We 

selected FSA’s North Dakota office because of its high completion rate of 

field inspections (96 percent) for 2009 and 2010 and large number of 

requests for field inspections (378). We selected the other four state 

offices because, over the 2-year period, they had low completion rates of 

field inspections (less than 33 percent) and at least 80 requests for field 

inspections. A more detailed discussion of our scope and methodology is 

presented in appendix I.

We conducted this performance audit from January 2011 to March 2012 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

In conducting their operations, farmers are exposed to financial losses 

because of production risks—droughts, floods, and other natural 

disasters—as well as price risks. The federal government has played an 

active role in helping to mitigate the effects of these risks on farm income 

by promoting the use of crop insurance. RMA has overall responsibility for 

administering the federal crop insurance program, including controlling 

costs and protecting against fraud, waste, and abuse. RMA partners with 

15 private insurance companies that sell and service the federal 

program’s insurance policies and share a percentage of the risk of loss 

and opportunity for gain associated with the policies.

Through the federal crop insurance program, farmers insure against 

losses on more than 100 crops. These crops include major crops—such 

as corn, cotton, soybeans, and wheat, which accounted for three-quarters 

of the acres enrolled in the program in 2011—as well as nursery crops 

and certain fruits and vegetables. For the purposes of this report, we 

generally refer to participants in the federal crop insurance program as 

participating farmers.

Background 
 

Page 5 GAO-12-256 Crop Insurance

Most crop insurance policies are either production-based or revenuebased. For production-based policies, a farmer can receive a payment if 

there is a production loss relative to the farmer’s historical production per 

acre. Revenue-based policies protect against crop revenue loss resulting 

from declines in production, price, or both. The federal government 

encourages farmers’ participation in the federal crop insurance program 

by subsidizing their insurance premiums and acting as the primary 

reinsurer for the private insurance companies that take on the risk of 

covering, or “underwriting,” losses to insured farmers. A common 

measure of crop insurance program participation is the percentage of 

planted acres nationwide for major crops that are enrolled in the program.

In addition, the federal government pays administrative expense 

subsidies to insurance companies as an allowance that is intended to 

cover their expenses for selling and servicing crop insurance policies. In 

turn, insurance companies use these subsidies to cover their overhead 

expenses, such as payroll and rent, and to pay commissions to insurance 

agencies and agents. Companies also incur expenses associated with 

verifying—adjusting—the amount of loss claimed. These expenses 

include, for example, loss adjusters’ compensation and their travel 

expenses to farmers’ fields. The financial relationships among the federal 

government, private insurance companies, agents, and farmers are 

illustrated in figure 1.
 

Page 6 GAO-12-256 Crop Insurance

Figure 1: Financial Relationships among the Federal Government, Private Insurance 

Companies, Agents, and Farmers
 

Page 7 GAO-12-256 Crop Insurance

For 2011, the federal government’s subsidy costs were about $7.4 billion 

for crop insurance premiums and about $1.3 billion for administrative 

expenses. Crop insurance premium subsidies are not payments to 

farmers, but they can be considered a financial benefit. Without a 

premium subsidy, a participating farmer would have to pay the full amount 

of the premium. The administrative expense subsidies also can be 

considered a subsidy to farmers; with these subsidies, crop insurance 

premiums are lower than they would otherwise be if the program followed 

commercial insurance practices. In private insurance, such as automobile 

insurance, these administrative expenses typically are included in the 

premium that a policy holder pays.5

ARPA and the 2008 farm bill set premium subsidy rates, that is, the 

percentage of the premium paid by the government. Premium subsidy 

rates vary by the level of insurance coverage that the farmer chooses and 

the geographic diversity of the crops insured. For most policies, the 

statutory subsidy rates range from 38 percent to 80 percent. Table 1 

shows the total costs of subsidies for all crop insurance premiums and 

administrative expenses for 2000 through 2011. The table shows that 

premium subsidies have generally increased since 2000, both in dollars 

and as a percentage of total premiums. The premium subsidy rates, 

authorized by ARPA, became effective in 2001. Premium subsidies 

increased, as a percentage of total premiums, from 37 percent in 2000 to 

60 percent in 2001. In addition, premium subsidies rose as crop prices 

increased.

 

5

Farmers’ benefit from administrative expense subsidies may not be equal to the full 

amount of these subsidies. That is, to the extent that administrative expense subsidies

reflect an inefficient delivery system that provides services that farmers do not need or 

allows excess profits, these subsidies are not a benefit to farmers. 

Costs of Crop Insurance 

Subsidies That Benefit 

Farmers
 

Page 8 GAO-12-256 Crop Insurance

Table 1: Premium Subsidies and Administrative Expense Subsidies, 2000 through 2011

Dollars in millions 

Year

Government

-paid premium 

subsidies

Government–paid 

premium subsidies 

as a percentage of 

total premiums

Farmerpaid 

premiums

Farmer-paid 

premiums as a 

percentage of 

total premiums

Total 

premiums

Administrative 

expense 

subsidies

2000 $951 37 $1,589 63 $2,540 $552

2001 1,772 60 1,190 40 2,962 636

2002 1,741 60 1,175 40 2,916 626

2003 2,042 60 1,389 40 3,431 734

2004 2,477 59 1,709 41 4,186 888

2005 2,344 59 1,605 41 3,949 829

2006 2,682 59 1,898 41 4,580 959

2007 3,823 58 2,739 42 6,562 1,333

2008 5,691 58 4,160 42 9,851 2,009

2009 5,426 61 3,523 39 8,950 1,619

2010 4,710 62 2,882 38 7,592 1,368

2011 $7,367 62 $4,455 38 $11,822 $1,330

Source: GAO analysis of RMA data.

a

Note: The premium data are as of October 24, 2011.

a

As crop prices increase, the value of the crops being insured increases, 

which results in higher crop insurance premiums and premium subsidies. 

For example, the prices of major crops were substantially higher in 2011 

than in 2006, and premium subsidies in 2011 (about $7.4 billion) were 

substantially higher than in 2006 (about $2.7 billion). USDA forecasts that 

the prices of major crops—corn, cotton, soybeans, and wheat—will 

continue to be substantially higher than 2006 prices through 2016. 

Administrative expense subsidies also increased because of higher crop 

prices. However, RMA capped administrative expense subsidies in the 

2011 standard reinsurance agreement (SRA), a cooperative financial 

agreement between USDA and insurance companies. These changes 

became effective in 2011. As a result, administrative expense subsidies 

were lower in 2011 than they otherwise would have been.

The 2011 administrative expense subsidy is estimated.
 

Page 9 GAO-12-256 Crop Insurance

The federal government provides crop insurance subsidies to farmers in 

part to achieve high crop insurance participation and coverage levels,6

Congress established a standing disaster program in the 2008 farm bill—

the Supplemental Revenue Assistance Payments Program. Under this 

program, Congress funded a $3.8 billion permanent trust fund and 

directed the Secretary of Agriculture to make crop disaster assistance 

payments to eligible farmers who suffer crop losses on or before 

September 30, 2011. USDA—through FSA—began making disaster 

payments under this program in early 2010 for crop losses incurred in 

2008. To qualify for a disaster assistance payment under this program, a 

farmer must have purchased either federal crop insurance coverage or be 

covered under the Noninsured Crop Disaster Assistance Program for all 

crops of economic significance on their farming operation. Without 

reauthorization, the Supplemental Revenue Assistance Payments 

Program will not make payments on losses caused by natural disasters 

that occurred after September 30, 2011.

which are intended, according to USDA economists, to reduce or 

eliminate the need for ad hoc disaster assistance payments to help 

farmers recover from natural disasters, which can be costly. For example, 

under three separate congressionally authorized ad hoc crop disaster 

programs, USDA provided $7 billion in disaster assistance payments to 

farmers whose crops were damaged or destroyed by natural disasters 

from 2001 through 2007.

Farmers’ participation in the federal crop insurance program and 

spending on ad hoc disaster assistance have been policy issues for more 

than 30 years. According to a 2005 USDA publication, Congress passed 

the Federal Crop Insurance Act in 1980 to strengthen participation in the 

crop insurance program with the goal of replacing the costly disaster 

assistance programs.7

 

6

Farmers select a coverage level—that is, the percentage of their normal yield or revenue 

they want to insure. In 2009, over half of the enrolled corn and soybean acres were at 

coverage levels above 70 percent. 

Crop insurance participation can be measured by 

acres enrolled in the program, the percentage of eligible acres of major 

crops and the percentage of a crop’s market value insured—the coverage 

level. According to the USDA publication, the government has historically 

7

R. Dismukes and J. Glauber, “Why Hasn’t Crop Insurance Eliminated Disaster 

Assistance?” Amber Waves, USDA Economic Research Service (June 2005). 

Crop Insurance 

Participation and Disaster 

Assistance Payments
 

Page 10 GAO-12-256 Crop Insurance

attempted to increase participation by subsidizing premiums. Under the 

1980 law, the government offered premium subsidy rates of up to 30 

percent. However, by 1994, less than 40 percent of eligible acreage was 

enrolled in the program, and Congress had passed ad hoc disaster 

assistance totaling nearly $11 billion. In order to increase participation, 

according to the USDA publication, the Federal Crop Insurance Reform 

Act of 1994 increased premium subsidy rates. Farmers responded by 

enrolling more acres. Enrollment was about 100 million acres in 1993 

before the act and about 182 million acres in 1997. Under ARPA, 

premium subsidy rates increased again in 2001. Farmers subsequently 

purchased more insurance at higher coverage levels. With the increases 

in acres enrolled and coverage levels, premium subsidy costs increased. 

The 2005 USDA publication noted that by 2004 premium subsidies 

totaled nearly $2.5 billion and had become an increasingly costly way of 

encouraging participation. As shown in table 1, premium subsidies 

reached $7.4 billion in 2011.

From 2008 through 2010, annual payments to farmers for their crop 

insurance claims averaged about $6 billion. Most claims are legitimate, 

but some involve fraud, waste, or abuse, according to RMA’S data mining 

contractor. USDA’s Office of the Inspector General has reported that 

fraud is commonly perpetrated through false certification of one or more 

of the basic data elements, such as production history, essential for RMA 

to determine program eligibility or validity of claims. Crop insurance fraud 

cases can be particularly complex in their details and correspondingly 

time-consuming to review. These fraud cases sometimes involve multiple 

individuals working together, such as farmers, insurance agents, and 

insurance loss adjusters. Claim payments based on fraudulent crop 

insurance losses sometimes result in comparatively large monetary costs 

to USDA. Waste is incurring unnecessary costs as a result of inefficient or 

ineffective practices, systems, or controls. Waste includes improper 

payments that may be caused by errors in data upon which claim 

payments are based. Abuse occurs when a participating farmer’s actions 

defeat the intent of the program, although no law, regulation, or contract 

provision may be violated. For example, under the Federal Crop 

Insurance Act, RMA must offer coverage for prevented planting—that is, if 

farmers cannot plant a crop for specified reasons, prevented planting 

coverage enables them to receive a claim payment. In 2005, we noted 

instances in which FSA county officials stated they believed that some 

farmers in their counties who claimed prevented planting losses never 

intended to plant or did not make a good faith attempt to plant their crop 

but still received prevented coverage claim payments. In 2011, RMA 

Potential for Fraud, Waste, 

and Abuse in the Federal 

Crop Insurance Program
 

Page 11 GAO-12-256 Crop Insurance

issued guidance to its field offices and insurance companies to address 

abuse involving prevented planting.

RMA uses data mining—a technique for extracting knowledge from large 

volumes of data—to detect potential cases of fraud, waste, or abuse by 

(1) developing scenarios of potential program abuse by farmers, 

insurance agents, and loss adjusters and (2) querying the database 

containing crop insurance data and information on weather, soil, and land 

surveys to generate reports and lists of participating farmers with 

anomalous claim payments. RMA has contracted with the Center for 

Agribusiness Excellence, located at Tarleton State University in 

Stephenville, Texas, to conduct data mining since 2001. Following USDA 

written procedures, RMA and the insurance companies are to use data 

mining results to conduct reviews of the claims to determine if there is 

actual fraud, waste, or abuse. The data mining tools that RMA uses 

include the following:

• List of farmers with anomalous claim payments. Through data mining, 

RMA develops a list of farmers with anomalous claim payments.8

List of insurance agents and adjusters with anomalous losses. ARPA 

requires the Secretary of Agriculture to establish procedures that RMA 

can use to develop a list of insurance agents and loss adjusters with 

anomalous losses—losses that are higher than those of their peers in 

RMA annually provides this list to FSA, which assists RMA in 

monitoring these farmers. Under USDA guidance, FSA county offices 

are to conduct two inspections (postplanting and preharvest) for each 

policy these farmers hold. FSA county offices are then to report to 

RMA on whether they inspected the crop and, if so, whether the 

inspection determined that (1) the inspected farmer’s crop was in 

good condition; (2) the inspected farmer’s crop was not in good 

condition, but other farmers’ crops in the local area were in good 

condition; or (3) the inspected farmer’s crop was not in good 

condition, and other farmers’ crops in the local were also not in good 

condition.

 

8

For the purposes of this report, “farmers with anomalous claim payments” refers to those 

farmers with claim payments over $10,000. In 2011, RMA, for the first time, asked 

companies to review farmers with anomalous claims under $10,000 in 2010. These 

payments totaled over $7 million. 

Data Mining to Prevent 

and Detect Fraud, Waste, 

and Abuse
 

Page 12 GAO-12-256 Crop Insurance

the same geographic area—and to review this list to determine 

whether the anomalous losses are the result of fraud, waste, or 

abuse. RMA uses data mining and scenarios it has developed for 

fraud, waste, and abuse to identify these insurance agents and 

adjusters.

The RMA contractor’s data mining reports identify individual farmers with 

anomalous claim payments or insurance agents and adjusters with 

anomalous losses, but these anomalies only indicate potential cases of 

fraud, waste or abuse. These claims and losses may be legitimate, 

resulting from unusual weather or other conditions on a farm. As such, a 

portion of each list inevitably represents “false positives”—farmers whose 

claims were valid. To determine if there is actual fraud, waste, or abuse, 

RMA or the insurance company must engage in additional review. Such 

reviews may require RMA or the company to, among other things, 

analyze the claims, appraisal sheets, special adjuster reports, 

photographs, and receipts for inputs, such as seeds and fertilizer. These 

reviews are needed to determine the validity of the data mining reports; 

providing feedback on the reports’ validity to the data mining contractor 

enables RMA’s contractor to refine its data mining tools, thereby 

improving the detection of fraud, waste and abuse.

RMA administers the crop insurance program through the SRA. This 

agreement establishes the terms and conditions under which insurance 

companies that sell and service policies have to operate. Under the 2011 

SRA, insurance companies are to conduct reviews, including inspections 

of crop insurance policies for which anomalies have been identified 

through data mining, and report the results to RMA. These reviews are 

not to exceed 3 percent of eligible crop insurance contracts (about 30,000 

policies), unless RMA provides notice that additional reviews are 

required. The SRA also requires insurance companies to conduct 

inspections or monitoring programs for agents and loss adjusters that 

RMA has identified as necessary for protecting the program’s integrity.

Standard Reinsurance 

Agreement
 

Page 13 GAO-12-256 Crop Insurance

Unlike the crop insurance program, many USDA farm programs—

including income support programs, conservation programs, and disaster 

assistance programs9

—have statutory income and payment limits that 

apply to individual farmers and legal entities. Income limits set the 

maximum amount of income that a person or legal entity can earn and 

still remain eligible for certain farm program payments. For example, a 

person or legal entity with an average adjusted gross farm income (over 

the preceding 3 tax years) exceeding $750,000 is generally ineligible for 

direct payments.10 Payment limits set the maximum payment amount that 

a person or legal entity can receive per year from a farm program. For 

example, for direct payments, the payment limit in the 2008 farm bill is 

generally $40,000 per person or legal entity.11 For a disaster assistance 

program, the annual payment limit is $100,000 per person or legal 

entity.12

Farming operations are organized in various ways, including as sole 

proprietorships, partnerships, and corporations. As we have previously 

reported,

Additional income and payment limits for selected farm programs 

are described in appendix II.

13

Eligibility for many farm programs also depends on compliance with other 

standards. For example, to receive direct payments or Average Crop 

some farmers and legal entities change the way their farming 

operations are organized to maximize their farm program benefits. 

However, other considerations may outweigh the financial gains of 

making such a change.

 

9

Income support programs help stabilize and support farmers’ income. Conservation 

programs encourage environmental stewardship of farmlands. Disaster assistance 

programs help farmers recover financially from a natural disaster.

10A husband and wife may divide their income for the income limit test as if they had filed 

separate income tax returns.

11A husband and wife can each receive a payment, which enables them collectively to 

receive up to $80,000 in direct payments annually.

12 USDA’s Farm Service Agency is responsible for ensuring that only eligible individuals 

receive farm program payments, either directly or as a member of an entity, and do not 

receive payments that exceed the established limits. 

13GAO, Farm Program Payments: USDA Needs to Strengthen Regulations and Oversight 

to Better Ensure Recipients Do Not Circumvent Payment Limitations, GAO-04-407

(Washington, D.C.: Apr. 30, 2004).

Farm Programs’ Income 

and Payment Limits and

Other Eligibility Standards
 

Page 14 GAO-12-256 Crop Insurance

Revenue Election Program payments under the 2008 farm bill,14 an 

individual or entity must be “actively engaged in farming.” To be 

considered actively engaged in farming, an individual must, among other 

things, make significant contributions to a farming operation in (1) capital, 

land, or equipment and (2) personal labor or active personal 

management. An entity is considered actively engaged in farming if, 

among other things, the entity separately makes a significant contribution 

of capital, land, or equipment, and its members collectively make a 

significant contribution of personal labor or active personal management. 

In addition, participants in many farm programs who farm in areas 

identified as having highly erodible land or a wetland must comply with 

certain land and environmental conservation requirements for payment 

eligibility purposes. Participants who fail to abide by or apply approved 

conservation practices on land identified as highly erodible or a wetland 

are subject to payment reductions or total ineligibility for program 

payments.

According to our analysis of RMA data for 2011, the federal government 

would have achieved savings in the crop insurance program by limiting 

premium subsidies for crop insurance participants, as payments are 

similarly limited for other farm programs. A decision to limit or reduce 

premium subsidies to achieve cost savings raises other considerations, 

such as the potential effect of such a limit on the financial condition of 

large farms and on program participation.

Without limits on the premium subsidies in the crop insurance program, 

the nearly 900,000 farmers participating in the program received premium 

subsidies of $4.7 billion in 2010 and $7.4 billion in 2011. Applying limits 

on premium subsidies to participating farmers, similar to the payment 

limits for other farm programs, would lower program costs and save 

federal dollars, according to our analysis of RMA data. Using a limit of 

$40,000 per participating farmer for premium subsidies for this period—

the limit applied to direct payments—we identified significant potential 

 

14Under the Average Crop Revenue Election Program, farmers may receive revenuebased payments as an alternative to receiving certain other types of farm program 

payments and must forgo 20 percent of their direct payments.

A Limit on Crop 

Insurance Subsidies 

Would Lower 

Program Costs

A Potential Limit on Crop 

Insurance Subsidies Would 

Have Resulted in Savings 

for 2011
 

Page 15 GAO-12-256 Crop Insurance

savings to the federal government—savings of up to $358 million for 2010 

and $1 billion for 2011.15

The amount of these savings may depend on whether, and the extent to 

which, farmers and legal entities reorganized their business to avoid or 

lessen the effect of limits on premium subsidies. As we have previously 

reported regarding payment limits for other farm programs, some farming 

operations may reorganize to overcome payment limits to maximize their 

farm program benefits.16

In particular, if a $40,000 limit on premium subsidies had been applied in 

2010, up to 13,309 farmers—1.5 percent of all participating farmers—

would have seen their subsidies reduced, for an annual savings of up to 

$358 million to the federal government. For 2011, if the limit had been 

applied, up to 33,690 farmers—3.9 percent of all participating farmers—

would have received reduced subsidies, at an annual savings of up to $1 

billion. The number of participating farmers receiving more than $40,000 

in premium subsidies increased from 2010 to 2011 because crop prices 

increased. Higher crop prices increased the value of crops insured, 

resulting in higher crop insurance premiums and hence a higher subsidy 

level. Figures 2 and 3 provide more information about the distribution of 

premium subsidies among participating farmers in 2010 and 2011. The 

figures show the number of participating farmers by the level of premium 

subsidies that individual farmers (i.e., persons or legal entities) received.

For these farmers and legal entities, it is unclear 

whether further reorganization to lessen the effect of limits on premium 

subsidies would occur. In addition, in some instances, the requirement 

that an individual or entity be actively engaged in farming to receive farm 

program benefits is likely to prevent the creation of entities in order to 

avoid a limit on premium subsidies. Finally, some farmers would likely 

begin to report their spouse as a member of the farming operation, which 

under payment limit rules enables an operation to double the amount of 

benefits it can receive.

 

15In this report, we used $40,000 as an example of a premium subsidy limit. Setting a 

premium subsidy limit higher or lower than $40,000 would have corresponding effects on 

cost savings. 

16GAO-04-407. Since we issued this report, the 2008 farm bill decreased the incentive to 

reorganize a farming operation in order to avoid a limit on farm program payments by 

eliminating the “three-entity rule” and requiring direct attribution of payments to individuals. 
 

Page 16 GAO-12-256 Crop Insurance

Figure 2: Levels of Premium Subsidies that Individual Farmers Received in 2010

Figure 3: Levels of Premium Subsidies that Individual Farmers Received in 2011
 

Page 17 GAO-12-256 Crop Insurance

In addition, figures 2 and 3 show that 1,260 participating farmers received 

more than $100,000 in premium subsidies in 2010, and 4,202 

participating farmers received more than $100,000 in premium subsidies 

in 2011. Even if a higher limit on premium subsidies were applied—

$100,000, for example—in 2010 and 2011, the federal government would 

have still realized savings, according to our analysis—of up to $87 million 

and $232 million, respectively.

Figures 4 and 5 show, for 2010 and 2011, the percentage of participating 

farmers and the value of the premium subsidies they received, separated 

into two groups: those who received premium subsidies of $40,000 or 

less and those who received premium subsidies of more than $40,000. 

Figure 4 shows that 1.5 percent of all participating farmers (13,309 

participating farmers) accounted for 18.9 percent of the premium 

subsidies in 2010.17 Figure 5 shows that 3.9 percent of all participating 

farmers (33,690 participating farmers) accounted for 32.6 percent of the 

premium subsidies in 2011.18

 

17Among the 13,309 participating farmers receiving more than $40,000 in premium 

subsidies, the average insured value of their crops was about $983,000. For all 

participating farmers, the average insured value of the crops was about $89,000.

18Among the 33,690 participating farmers receiving more than $40,000 in premium 

subsidies, the average insured value of their crops was about $873,000. For all 

participating farmers, the average insured value of the crops was about $129,000.
 

Page 18 GAO-12-256 Crop Insurance

Figure 4: Percentage of Participating Farmers and Value of Premium Subsidies by 

Individual Farmers Receiving Subsidies of $40,000 or Less, or More than $40,000 in 

2010
 

Page 19 GAO-12-256 Crop Insurance

Figure 5: Percentage of Participating Farmers and Value of Premium Subsidies, by 

Individual Farmers Receiving Subsidies of $40,000 or Less, or More than $40,000 in 

2011

Many of the participating farmers who received more than $40,000 in 

premium subsidies were in the northern and southern plains. Additional 

information on the locations of participating farmers who received more 

than $40,000 in premium subsidies for 2011 is presented in appendix III.

We also found the following:

• In 2010, the average value of the premium subsidies received by 

participating farmers was $5,339. Thirty-seven participating farmers 

each received more than $500,000 in premium subsidies. The 

participating farmer receiving the most in premium subsidies—a total 

of about $1.8 million—was a farming operation organized as a 

corporation that insured cotton, tomatoes, and wheat across two 

counties in one state. In addition, the cost of the administrative 

expense subsidies that the government spent on behalf of this 

corporation was about $309,000. Another of the 37 participating 

farmers was an individual who insured corn, forage, potatoes, 
 

Page 20 GAO-12-256 Crop Insurance

soybeans, sugar beets, and wheat across 23 counties in six states, for 

a total of about $1.6 million in premium subsidies. In addition, the cost 

of the administrative expense subsidies that the government spent on 

behalf of this farmer was about $443,000.

• In 2011, the average value of the premium subsidies received was 

$8,312. Fifty-three of these farmers each received more than 

$500,000 in premium subsidies. The largest recipient was a 

corporation that insured nursery crops across three counties in one 

state, for a total of about $2.2 million in premium subsidies. In 

addition, the administrative expense subsidies that the government 

spent on behalf of this corporation totaled about $816,000. Another of 

the 53 farmers was an individual who insured canola, corn, dry beans, 

potatoes, soybeans, sugar beets, and wheat across eight counties in 

two states, for a total of about $1.3 million in premium subsidies. In 

addition, the administrative expense subsidies that the government 

spent on behalf of this farmer totaled about $499,000.

Alternatively, recent studies—noting the rising cost of premium 

subsidies—have proposed reducing premium subsidy rates for all 

participating farmers to achieve savings.19

We also examined the effect on costs for the federal crop insurance 

program of applying a crop insurance subsidy limit to administrative 

expense subsidies, as well as premium subsidies. Additional savings 

would be realized, according to our analysis. For example, if a limit of 

$40,000 per farmer for both premium subsidies and administrative 

expense subsidies had been applied to the crop insurance program for 

2011, up to 52,693 farmers (6 percent of all participating farmers) would 

have seen their subsidies reduced, at an annual savings of up to nearly 

$1.8 billion to the federal government. In contrast, applying limits to 

premium subsidies alone would have resulted in a savings of about $1 

For example, if the premium 

subsidy rate for 2010 and 2011 had been reduced by 10 percentage 

points—from 62 percent to 52 percent—for all participating farmers, the 

annual cost savings for those years would have been about $759 million 

and $1.2 billion, respectively.

 

19Bipartisan Policy Center’s Debt Reduction Task Force, Restoring America’s Future

(Washington, D.C.: November 2010); Congressional Budget Office, Reducing the Deficit: 

Spending and Revenue Options (Washington, D.C.: March 2011); Office of Management 

and Budget, Fiscal Year 2013 Budget of the U.S. Government (Washington, D.C.: 

February 2012). 
 

Page 21 GAO-12-256 Crop Insurance

billion. Additional information about the 2010 and 2011 cost of premium 

subsidies and administrative expense subsidies by farmer is in appendix 

IV.

In addition to federal cost savings, we identified a number of other 

considerations that may come into play in deciding whether to limit 

premium subsidies to individual farmers. These considerations include (1) 

the potential effect on the financial condition of large farms (i.e., those 

with annual gross sales of $1 million or more), whose owners are most 

likely to be affected by subsidy limits; (2) the availability of other risk 

management tools against crop losses, such as marketing contracts; and 

(3) the potential effect on beginning and smaller farmers. In addition, we 

identified considerations associated with either limiting premium subsidies 

to large farmers or reducing premium subsidy rates for all farmers.

The application of limits of $40,000 in premium subsidies to farmers 

participating in the federal crop insurance program would primarily affect 

farmers who have large farms. For example, as discussed earlier, using 

our data for 2011, these participating farmers represented 3.9 percent of 

the farmers participating in the crop insurance program in 2011 and 

accounted for 32.6 percent of the premium subsidies. In view of the 

insured value of these farmers’ crops, they likely had annual gross sales 

approaching or exceeding $1 million. In addition, the insured value of 

these farmers’ crops represented about 26 percent of the total value of 

insured crops in 2011.20

• During 2008 and 2009, the most recent years for which USDA data 

were available, the largest farms with crop insurance coverage (i.e., 

those with annual gross sales of $1 million or more) earned an 

average annual net farm income of about $561,000. In contrast, the 

next two farm categories (farms with annual gross sales of from 

$500,000 to $1 million and farms with annual gross sales of from 

Limiting premium subsidies to farmers may raise 

concerns about how these limits could affect large farms’ financial 

condition. Based on our review of data from USDA’s Agricultural 

Resource Management Survey on the financial condition of farms, by 

farm size, large farms are better positioned than smaller farms to pay a 

higher share of their premiums. Specifically, according to the USDA data:

 

20We used 2011 numbers because, based on USDA crop price projections, 2011 is 

generally more indicative of the future than 2010.

Limiting or Reducing 

Premium Subsidies Raises 

Other Considerations 

Potential Effect on Large 

Farms’ Financial Condition
 

Page 22 GAO-12-256 Crop Insurance

$250,000 to $500,000) had average annual net farm incomes of about 

$184,000 and $92,000, respectively.

• The largest farms with crop insurance coverage had higher relative 

profitability as measured by rate of return on equity, which is the ratio 

of net farm income to the net worth of the farm. These farms had an 

average rate of return on equity of 8.8 percent. In contrast, the next 

two farm categories had rates of 4.5 percent and 1.9 percent, 

respectively.

• The largest farms had higher debt-to-asset ratios than the next two 

farm categories,21

In addition, regarding the financial condition of large farms, a related 

consideration is the global competiveness of U.S. agriculture. According 

to critics of limits on farm program benefits, larger farms should not be 

penalized for the economies of size and efficiencies they have achieved, 

and farm programs should help make U.S. farmers more competitive in 

global markets.

but the largest farms’ ability to service debt by 

covering principal payments and interest on term debt was greater.

Furthermore, a high debt-to-asset ratio is not necessarily a problem, 

as long as the rate of return on assets exceeds the interest rate on the 

funds borrowed. On average, farms with sales greater than $5 million 

generate more net cash income per dollar of assets than other farms, 

and the larger gross cash income can be used to pay interest or 

reduce loan balances.

If the large farmers affected by a limit on premium subsidies were to 

reduce their coverage, they may be able to self-insure through a variety of 

risk management methods, including the following:

• Marketing contracts. Marketing contracts reduce price risks and are 

already used by many large farmers. These contracts are either 

verbal or written agreements between a buyer and a farmer that set a 

price for a commodity before harvest or before the commodity is ready 

to be marketed.

 

21A debt-to-asset ratio is a ratio of the farm’s total debt to total assets, showing the share 

of assets owed to creditors. It is a measure of the risk exposure of the farm business, with 

a higher ratio corresponding to greater risk. According to a 2012 Congressional Research 

Service Report, the debt-to-asset ratio for all farms is expected to fall to 10.3 percent in 

2012, the lowest ratio on record. 

Availability of Other Risk 

Management Tools against 

Crop Losses
 

Page 23 GAO-12-256 Crop Insurance

• Futures contracts and hedging. A futures contact is a financial 

contract obligating the buyer to purchase an asset (or the seller to sell 

an asset), such as a commodity, at a predetermined future date and 

price. Futures contracts detail the quality and quantity of the 

underlying asset and are standardized to facilitate trading on a futures 

exchange. Futures can be used to hedge on the price movement of 

the underlying asset. For example, a producer of corn could use 

futures to lock in a certain price and manage risk (hedge).

• Crop and other enterprise diversification. Diversification is a risk 

management strategy that involves participating in more than one 

activity. A crop farm, for example, may have several productive 

enterprises (i.e., several different crops or both crops and livestock), 

or may operate nonadjacent parcels so that local weather disasters 

are less likely to reduce yields for all crops simultaneously.

• Liquid credit reserves. Farmers may maintain liquid credit reserves, 

such as an open line of credit, to generate cash quickly to meet 

financial obligations in the face of an adverse event. Liquid credit 

reserves reflect unused borrowing capacity.

• Private insurance. Certain agricultural risks—such as the risks 

associated with hail and other weather events damage—are insured 

by private companies without subsidized premiums.

Unlimited premium subsidies for individual farmers and farm entities may 

compound challenges that beginning and smaller farmers already face. 

For example, we reported in 2007 that the challenges facing beginning 

farmers include obtaining capital to purchase land and that the rising cost 

of land, driven in part by farm program subsidies, may make it difficult for 

beginning farmers to purchase land.22 According to USDA studies, farm 

program payments and other benefits, such as premium subsidies, result 

in higher prices to buy or rent land because, in some cases, the benefits 

go directly to landowners—resulting in higher land value—and in other 

cases the benefits go to tenants, prompting landlords to raise rental 

rates.23

 

22GAO, Beginning Farmers: Additional Steps Needed to Demonstrate the Effectiveness of 

USDA Assistance, 

Furthermore, a recent USDA report explained how farm program 

GAO-07-1130 (Washington, D.C.: Sept. 18, 2007). 

23These studies analyzed the effects of farm program payments. Crop insurance premium 

subsidies have a similar effect, though the link is less direct. 

Effect on Beginning and 

Smaller Farmers 
 

Page 24 GAO-12-256 Crop Insurance

payments may provide an advantage to larger farms.24

We identified additional considerations associated with either limiting 

premium subsidies to large farms or reducing premium subsidy rates for 

all farmers.

According to this 

report, “For some farmers, payments may provide opportunities to 

increase the size of their operation. A steady stream of income may allow 

recipients to gain access to higher levels of credit or may allow them to 

increase their rental or purchase bids for land. This may provide 

opportunities for them to increase in size while driving out competition 

from smaller farms that don’t have access to the same levels of capital, 

which can impact the overall structure of agriculture.” 

Premium subsidy limits or reduced premium subsidy rates could lead to 

lower participation in the federal crop insurance program and higher 

disaster assistance payments to farmers. In the past, Congress has 

authorized ad hoc disaster assistance payments to help farmers whose 

crops were damaged or destroyed by natural disasters. However, in view 

of the nation’s budgetary pressures, Congress may be less willing to 

approve such payments than it has in the past. In addition, according to a 

Congressional Budget Office report,25

As a member of the World Trade Organization, the United States has 

made commitments to limit domestic agricultural support that is most 

likely to distort trade. Under the current World Trade Organization 

agreement, the United States is committed to spending no more than 

$19.1 billion per year on this support. Keeping this domestic agricultural 

the increasing importance of crop 

insurance to private lenders who provide farm loans may cause farmers 

to continue to participate in the crop insurance program, even if premium 

subsidies were reduced. Furthermore, assuming they are eligible to 

purchase unsubsidized crop insurance, farmers could still enroll all of 

their eligible crop acres in the program, making them eligible to receive 

claim payments on these acres. In the event of a loss, farmers who chose 

to maintain crop insurance coverage as they had in the past would then 

have the same level of protection.

 

24USDA Economic Research Service, The Changing Organization of U.S. Farming

(Washington, D.C.: December 2011).

25Congressional Budget Office, Reducing the Deficit: Spending and Revenue Options

(Washington, D.C.: March 2011). 

Additional Considerations to 

Limiting or Reducing Subsidies
 

Page 25 GAO-12-256 Crop Insurance

support below this limit is likely to be a consideration of policymakers 

when they are developing or modifying farm programs. In August 2011, 

when the United States reported its domestic agricultural support for 2009 

to the World Trade Organization, it included the value of crop insurance 

premium subsidies—$5.4 billion—in its submission as nonproductspecific support.26 This $5.4 billion was the largest amount reported as 

nonproduct-specific support, which totaled $6.1 billion. However, under 

the current agreement, nonproduct-specific support in 2009 did not count 

toward the United States’ limit of $19.1 billion. 

Since 2001, RMA has used data mining tools to prevent and detect fraud, 

waste, and abuse in the crop insurance program by either farmers or 

insurance agents and adjusters, but it has not maximized their use to 

realize potential additional savings, largely because of competing 

compliance review priorities. In particular, using data mining tools, RMA 

develops lists of farmers with anomalous claim payments and informs 

these farmers that their fields will be inspected. In addition, investigators 

from RMA and USDA’s Office of the Inspector General sometimes use 

the list of agents and adjusters—identified through data mining—who 

have anomalous losses to corroborate information from other sources, 

but RMA has not conducted required reviews of agents and adjusters to 

determine whether anomalous losses are the result of fraud, waste, and 

abuse. RMA has not maximized the use of data mining tools, largely 

because of competing compliance review priorities, according to RMA 

documents we examined and officials we spoke with. In addition, RMA 

and FSA have not taken full advantage of data management techniques 

to increase the effectiveness of data mining.

Using data mining, RMA has identified farmers with anomalous claim 

payments (listed farmers), as called for under USDA procedures 

developed pursuant to an ARPA requirement. In addition, as described in 

these procedures, at RMA’s request, FSA has sent letters informing these 

farmers that an official in the FSA county office would inspect the crop in 

at least one of their fields during the growing season and report the 

results of the field inspection to RMA. For example, in 2010—the most 

 

26“U.S. Domestic Support Notification for Marketing Year 2009,” G/AG/N/USA/80, World 

Trade Organization, August 29, 2011.

RMA Has Not 

Maximized the Use of 

Data Mining Tools, 

Largely Because of 

Competing Priorities

Letters to Farmers Have 

Prevented Fraud, Waste, 

and Abuse, but RMA Has 

Not Fully Used This Data 

Mining Tool
 

Page 26 GAO-12-256 Crop Insurance

recent year for which data are available—RMA asked FSA to send letters 

to 1,747 listed farmers for each of their 2,452 policies with anomalous 

claim payments. RMA officials told us that the letters act as a warning and 

have substantially reduced total claims, by an estimated $838 million from 

2001 through 2010. According to RMA officials, about two-thirds of the 

farmers who receive a letter from FSA reduce or stop filing claims for at 

least 2 or 3 years following receipt of the letter, and one-third of farmers 

make additional anomalous claims after being placed on the list; some of 

these claims are likely to be legitimate.

The value of identifying farmers with anomalous claim payments may be 

undermined, however, by the fact that FSA does not complete all field 

inspections, and neither FSA nor RMA has a process to ensure that the 

results of all completed inspections are accurately reported, in 

accordance with USDA’s written procedures. In particular, in 2009 and 

2010, RMA did not have field inspection results for 20 percent and 28 

percent, respectively, of the fields for farmers listed as having anomalous 

claim payments. Four states—California, Colorado, Florida, and Texas—

accounted for more than 40 percent of the missing data. For example, in 

Florida, FSA inspected a field for 8 of the 88 farmers with anomalous 

claim payments, according to our review of RMA records. If FSA does not 

complete all field inspections requested by RMA, not all farmers who 

have had anomalous claim payments will be subject to a review, 

increasing the likelihood that fraud, waste, or abuse may occur without 

detection. Table 2 shows the number of requests RMA made for FSA field 

inspections and the percentage of fields inspected for 2009 and 2010 in 

selected states.
 

Page 27 GAO-12-256 Crop Insurance

Table 2: Number of RMA Requests for FSA Field Inspections and Percentage of 

Inspections Completed for Selected States in 2009 and 2010

2009 2010 

State 

Number of 

inspections 

requested 

Percentage of 

inspections 

completed

Number of 

inspections 

requested

Percentage of 

inspections 

completed

Florida 64 3 24 17

California 84 17 85 44

Colorado 54 0 47 0 

Minnesota 132 95 111 97

North Dakota 195 100 183 92

Texas 153 42 215

Source: GAO analysis of RMA data.

a

a

We identified three reasons for the absence of FSA field inspections.

First, we found that FSA state offices are not required to monitor the 

completion of field inspections conducted by FSA county offices during 

the growing season. Without FSA state office monitoring of RMArequested field inspections, FSA county offices may have less incentive 

to complete them. The FSA state offices in the six states we reviewed 

varied in how closely they monitor these field office inspections. In 

particular, in Minnesota and North Dakota, FSA state offices monitored 

completion of field inspections and, in 2010, in these states, FSA county 

offices had 111 and 183 field inspections to conduct, respectively, and 

completed 97 percent and 92 percent, respectively, of these inspections.

In Minnesota, according to an FSA official we spoke with, the state office 

“encouraged” completion of field inspections by e-mailing all of the state’s 

FSA county offices a list of offices that had not completed their 

inspections. In North Dakota, a state FSA official attributed the state’s 

high rate of completed inspections largely to the fact that the state office 

monitors the rate of field inspections during the growing season, 

encouraging county offices that have not completed their inspections to 

do so. In contrast, California, Colorado, and Florida each had from 24 to 

85 inspections to conduct and completed from none to 44 percent of 

these inspections.

RMA reported that some 2010 data for Texas were not included because the FSA Texas office sent 

the data to RMA too late for it to be included in RMA’s totals, and other Texas data were missing for 

reasons RMA could not determine.

27

 

27As noted in table 2, Texas data for 2010 were incomplete. 

FSA officials from California and Florida agreed that 
 

Page 28 GAO-12-256 Crop Insurance

it would be a good practice to monitor the completion of field inspections 

during the growing season at the state or district level to hold the county 

offices accountable.

Second, FSA state officials in two of the four states with low inspection 

rates told us that insufficient resources were a key reason that county 

offices had not completed FSA inspections. These officials said that 

staffing had decreased for the past several years, but workload had 

increased.

Third, some FSA state officials said that county office staff may hesitate 

to spend time and effort on inspections when they do not believe the 

inspections will have any impact. For example, they said that neither they 

nor county officials are informed of any action taken on their inspection 

results and that county officials are discouraged when their inspections do 

not result in actions against the farmers who appear to be engaged in 

negligent farming practices. However, at least one RMA compliance 

office—RMA’s Northern Regional Compliance Office—does provide 

feedback to FSA. This office is responsible for Iowa, Minnesota, Montana, 

North Dakota, South Dakota, Wisconsin, and Wyoming. According to an 

FSA official in North Dakota, RMA’s Northern Regional Compliance Office 

sends FSA state officials letters describing the results of reviews RMA 

requested the insurance companies to conduct based on FSA 

inspections, and the state officials are to forward this information to the 

counties.

In addition, in 2010, as provided for under the SRA, RMA regional 

compliance offices directed insurance companies to review and report on 

farmers’ policies to ascertain whether fraud, waste, or abuse had 

occurred. These RMA offices have generally directed such reviews in two 

situations. First, when FSA inspectors reported that farmers’ crops were 

in worse condition than their peers, RMA regional compliance offices may 

direct companies to analyze the claims, documenting their work with 

appraisal sheets, special adjuster reports, pictures, and receipts for inputs 

such as seeds and fertilizer. Second, when farmers have anomalous 

claims data related to production history—a key factor in determining the 

total claims farmers make—RMA offices may direct the insurance 

companies to review these policies.
 

Page 29 GAO-12-256 Crop Insurance

USDA’s Office of the Inspector General reported in 2009 that RMA lacks 

documented procedures for following up on cases where farmers file 

claims after FSA’s field inspections indicate that crops are in good 

condition, and the farmer should not experience a loss. 28 Under the 

Standards for Internal Control in the Federal Government, federal 

agencies are to employ control activities, such as clearly documenting 

internal control in management directives, administrative policies, or 

operating manuals, and the documentation is to be readily available for 

examination.29 Without documented agency policies and procedures for 

reviewing farmers’ policies identified by data mining reports, RMA cannot 

provide reasonable assurance that the farmers’ policies would be 

reviewed consistently. The Inspector General added that, since RMA’s 

resources are not unlimited, the agency should consider requiring that 

insurance companies perform as much of this work as possible. In this 

regard, as we noted above, about one-third of farmers listed as having 

anomalous claim payments again claim losses after being placed on the 

list. RMA has not maximized the use of the list of farmers with anomalous 

claim payments by, for example, directing insurance companies to review 

these farmers’ claims before paying them after FSA has reported the 

crops to be in good condition. According to three current and former RMA 

and Office of the Inspector General officials, because these farmers have 

previously had anomalous claim payments, their claims warrant a review, 

particularly when FSA’s inspection found their crops to be in good 

condition within weeks of the time that the farmer made a claim.

 

28USDA Office of the Inspector General, RMA Compliance Activities.

29See GAO, Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999). These standards, issued 

pursuant to the requirements of the Federal Managers’ Financial Integrity Act of 1982, 

provide the overall framework for establishing and maintaining internal control in the 

federal government.
 

Page 30 GAO-12-256 Crop Insurance

Investigators from RMA and USDA’s Office of the Inspector General said 

that they use the list of insurance agents and loss adjusters with 

anomalous losses at times to corroborate information from other 

sources—such as the Office of the Inspector General’s fraud hotline—

rather than as a basis for initiating reviews. However, RMA has not fully 

met a statutory ARPA requirement to conduct a review of agents and 

adjusters with higher losses than their peers to determine whether the 

losses associated with these individuals are the result of fraud, waste, or 

abuse.

Officials from RMA and its data mining contractor told us of an instance in 

which an investigator in USDA’s Office of the Inspector General used the 

list of insurance agents and loss adjusters with anomalous losses as a 

starting point. Based on information in the list, the investigator began 

calling other USDA Inspector General investigative offices to determine 

whether they were also familiar with an agent who frequently had large 

anomalous losses. As a result of the list and telephone calls, the 

investigator identified an Inspector General hotline informant who had 

filed complaints about the same agent; the investigator initiated a review 

that became the largest crop insurance fraud case in U.S. history; this 

case involved tobacco farmers and insurance agents and adjusters 

working together. According to the Office of the Inspector General, the 

case may result in lower program costs of more than $80 million and 

continues to expand to more related reviews.

We also found that RMA had not fully met a requirement to conduct a 

review of agents and adjusters with higher losses than their peers to 

determine whether the losses associated with these individuals are the 

result of fraud, waste, or abuse. In 2009, the Inspector General found that 

RMA was not reviewing these individuals and recommended that RMA 

develop policies and procedures for reviewing disparately performing 

agents and adjusters to assess whether the higher-than-average loss 

ratios for the agents and adjusters identified are the result of potential 

fraud, waste, or abuse. According to RMA officials we interviewed, RMA 

had not fully met this requirement because of resource constraints, 

among other things. These officials told us that investigating agents and 

loss adjusters is more complex and time-consuming than investigating 

individual farmers because one agent or adjuster may be identified with a 

dozen or more policies. In addition, officials said, the insurance company 

database used to develop the list includes agents who are not servicing 

the policy they are identified with. RMA officials told us that they have 

discussed the problem of inaccurate data with insurance companies and 

that the companies have made improvements, but they could not specify 

USDA May Use the List of 

Agents and Adjusters with 

Anomalous Losses to 

Corroborate Other 

Information, but RMA 

Does Not Conduct 

Required Reviews
 

Page 31 GAO-12-256 Crop Insurance

the extent of the problem or the improvements. Some RMA officials also 

pointed out that investigators use many different data mining tools and 

that it may be a better use of resources if the requirement for RMA to 

review the list of agents and adjusters was changed to allow RMA to 

review agents and adjusters and farmers using a variety of data mining 

tools, such as a software program that helps investigators identify links 

among producers, agents, or adjusters who are jointly engaged in 

activities that are anomalous. In addition, in response to another 2000 

ARPA requirement, RMA included in the 2011 SRA a provision directing 

insurance companies to annually evaluate the performance of every 

agent and loss adjuster, including their loss ratios and the number and 

type of errors made by an agent or adjuster. The SRA does not, however, 

require additional focus on agents and adjusters identified as having 

anomalous losses through data mining.

According to RMA documents we examined and five of the six RMA 

regional compliance officials we spoke with, RMA staff devote most of 

their time to three priority compliance activities aimed at detecting fraud, 

waste, and abuse in crop insurance. As a result, they have limited time to 

review individuals identified by data mining tools, such as the list of 

farmers with anomalous claim payments and the list of agents and 

adjusters with anomalous losses. Specifically, regional compliance offices 

are responsible for carrying out the following priority activities:

• Reconciling conflicting RMA/FSA data associated with an FSA 

disaster assistance program, the Supplemental Revenue Assistance 

Payments Program. RMA headquarters directs staff to reconcile RMA 

data, such as the number of acres for which a farmer is claiming a 

loss, with FSA data on the number of acres planted. According to an 

RMA document, as of August 5, 2011, FSA had identified more than 

5,000 discrepancies for 2008 and 2009 and sent these to RMA, and 

RMA regional compliance offices had resolved over half of them. RMA 

officials said that they do not use data mining to determine priorities 

for reconciliations because they are required to reconcile every 

discrepancy referred by FSA, even if it is a $10 discrepancy. In 

addition, the RMA Administrator told us that insurance companies that 

are asked to help RMA resolve discrepancies have discussed the 

substantial costs they incur to correct small errors.

• Reviewing crop insurance policies to comply with the Improper 

Payments Information Act of 2002. RMA staff review 250 randomly 

selected policies each year, as agreed with the Office of Management 

Competing RMA Priorities 

Result in Limited Time to 

Conduct Reviews of 

Farmers and Agents and 

Adjusters Identified by 

Data Mining Tools
 

Page 32 GAO-12-256 Crop Insurance

and Budget, to estimate a payment error rate. Some RMA officials 

said that they would prefer to focus more attention on using data 

mining to review high-risk policies to detect and prevent fraud, waste, 

and abuse and focus less attention on conducting reviews to estimate 

an error rate.

• Reviewing potential cases of fraud, waste, or abuse in the crop 

insurance program that were identified through hotline calls and 

referred by USDA’s Inspector General. According to RMA data, each 

year the agency opens and closes several hundred cases of potential 

fraud, waste, and abuse involving thousands of crop insurance 

policies; some field offices reported having large backlogs of cases to 

address. Several RMA officials said they would like to use data mining 

to determine which referrals they should review, but Office of the 

Inspector General policy requires them to review all of these referrals 

within 90 days. They noted that some referrals provide little 

information or relate to small-value policies, but RMA may give priority 

to these referrals over reviews with a potentially greater cost-benefit 

result because of the Office of the Inspector General policy.

We identified three areas in which RMA and FSA have not taken full 

advantage of data management techniques to increase the effectiveness 

of data mining: inaccurate and incomplete FSA field inspection data for 

listed farmers, the insufficiency of the data collected from insurance 

companies on the results of their reviews, and RMA’s not providing 

insurance companies with results for most FSA inspections.

Certain FSA field inspection data for listed farmers may be inaccurate and 

incomplete because the results of the inspections may be reported late or 

not at all. This problem arises because RMA and FSA have a complicated 

process for transmitting the data, creating opportunities for errors and 

omissions. Specifically:

• Staff in about 1,000 FSA county offices transmit their field inspection 

data to nearly 50 state offices by e-mailing data, mailing CDs or paper 

documents, or inputting the data in their FSA computer systems.

• The FSA state offices e-mail or mail the data, in its different formats, 

to six RMA regional compliance offices.

• Two of the six RMA regional compliance offices retype the data into 

an RMA system, and the other four offices retype a small portion of 

the data—the field inspection date and crop conditions—into a 

RMA and FSA Have Not 

Taken Full Advantage of 

Data Management 

Techniques to Facilitate 

Data Mining

Inaccurate and Incomplete FSA 

Field Inspection Data for Listed 

Farmers 
 

Page 33 GAO-12-256 Crop Insurance

spreadsheet that already contains the original data mining 

information, such as the policy number and participating farmer’s 

name. The six offices then send the FSA data to RMA’s data mining 

contractor for analysis.

Through interviews with FSA state officials and a review of the data on 

FSA field inspection results, we identified several examples of errors and 

omissions that had occurred in the process of recording and transmitting 

the data from FSA to RMA and its data mining contractor for additional 

analysis and followup on anomalous claims and to its data mining 

contractor for further analysis. For example:

• Officials in three FSA state offices said that additional field inspections 

likely have been done even though the data for them are missing.

They said that some county staff had not been trained on how to enter 

inspection results into the FSA computer system and therefore did not 

always report information on completed inspections to state FSA 

offices so that it could be provided to RMA.

• FSA state offices, at times, did not forward field inspection data to 

RMA for several months after the inspections were completed, 

according to our analysis of FSA records and an RMA official. All of 

the field inspection data for one state were missing from RMA’s data 

mining contractor records because the FSA state office provided the 

data to RMA after RMA had sent inspection data to the data mining 

contractor for analysis. At least 10 percent of the data for another 

state were missing for the same reason. One RMA official noted that 

FSA occasionally provides late responses for fields with crops in 

worse condition than others in the area. Such delays mean that RMA 

cannot ask insurance companies to review the fields for these policies 

before harvest or making a claim payment, when insurance adjusters 

could determine whether the crop was being deliberately managed in 

a way that reduces yield.

According to RMA officials and contractor staff, they have recognized 

these problems and proposed using software that other USDA agencies 

use in a new process to transmit the data from the FSA county offices 

directly to a USDA system while providing access to RMA and FSA. They 

told us that they are planning to implement the new system before 2012 

field inspections have begun and believe the new system will eliminate 

problems we identified.
 

Page 34 GAO-12-256 Crop Insurance

RMA does not collect sufficient data from insurance company reviews in 

an electronic format that facilitates its data mining, according to RMA 

officials. RMA uses an electronic form to collect data from all types of 

company reviews, including those that RMA requested as a result of data 

mining and those that were requested because of Office of the Inspector 

General hotline referrals. However, this form does not provide the data 

mining contractor with sufficient information on which records the 

insurance companies reviewed and why they reviewed these records in 

order to determine if an adjustment needs to be made to improve data 

mining, according to RMA officials and the data mining contractor. In 

addition, RMA officials and the data mining contractor told us that the 

electronic form does not provide an efficient way of sorting out the data 

needed for data mining. RMA officials said that more complete data on 

the insurance company reviews are important for improving data mining 

because insurance companies often have information that RMA does not 

have that can explain why an anomalous claim is being made. The data 

mining contractor stated that it had developed proposals for revising the 

electronic form to collect information that could help it improve data 

mining lists, such as the list of farmers with anomalous claim payments 

and agents and adjusters with anomalous losses. In 2009, the Inspector 

General also concluded that the data mining contractor needed such 

information to refine data mining reports. Without an electronic 

mechanism to collect sufficient data from insurance companies on their 

reviews, RMA is limited in the analyses it can conduct and in the 

improvements it can make in data mining. As a result, RMA may be 

missing opportunities for savings that result from better data mining. RMA 

officials said that they are considering making changes so that the data 

mining contractor receives additional information.

RMA generally does not provide insurance companies with field 

inspection results for most FSA inspections—that is, those for fields in 

good condition—but provides them with the field inspection results for a 

small portion of the farmers—those with crops in worse condition than 

their peers. However, inspection information on fields in good condition is 

important—particularly for inspections that occurred shortly before a claim 

was made. Past cases have revealed that some farmers may harvest a 

high-yielding crop, hide the sale of that crop, and report a loss to receive 

an insurance payment. USDA’s Inspector General has reported on the 

need to use FSA field inspection information to identify potential fraud, 

Insufficiency of the Data 

Collected from Insurance 

Companies on the Results of 

Their Reviews 

RMA Is Not Providing 

Companies with Results for 

Most FSA Inspections
 

Page 35 GAO-12-256 Crop Insurance

waste, and abuse.30 For example, in 2009, the Inspector General reported 

on two farmers on the list of farmers with anomalous claim payments 

whose crops were in good condition, according to the FSA inspection; 

however, these farmers filed nearly $300,000 in claims a short time after 

the FSA inspection, and RMA did not notice the discrepancy. RMA’s data 

mining contractor stated that it could, with a few days of effort, provide all 

the FSA field inspection data to the insurance companies, including those 

on crops in good condition, which represent the bulk of inspections.

Federal crop insurance plays an important role in protecting farmers from 

losses caused by natural disasters and price declines, and it has become 

one of the most important programs in the safety net for farmers. As we 

have discussed, unlike other farm programs, the crop insurance program 

does not limit the subsidies that a farmer can receive. Without subsidy 

limits, a small number of farmers receive relatively large premium 

subsidies and a relatively large share of total premium subsidies. In 

addition, premium subsidies for all farmers, which averaged 62 percent of 

premiums in 2011, have increased substantially since 2000. With 

increasing pressure to reduce the federal budget deficit and with record 

farm income in recent years, it is critical that taxpayer-provided funds for 

the farm safety net are spent as economically as possible. Limits on 

premium subsidies to individual farmers or reductions in the amount of 

premium subsidies for all farmers participating in the crop insurance 

program, or both limits and reductions, present an opportunity to save 

hundreds of millions of dollars per year for taxpayers without 

compromising this safety net.

In addition, RMA has made substantial progress over the past decade in 

developing data mining tools to detect and prevent fraud, waste, and 

abuse from a list of farmers who have received payments for anomalous 

claims, but RMA’s use of these tools lags behind their development, 

largely because of competing priorities. By not maximizing the use of 

these tools, RMA may be missing opportunities to identify and prevent 

losses to the federal government that result from fraud, waste, or abuse. 

Furthermore, because FSA does not require its state offices to monitor, 

during the growing season, completion of its county office field 

 

30U.S. Department of Agriculture Office of the Inspector General, RMA Compliance 

Activities. 

Conclusions 
 

Page 36 GAO-12-256 Crop Insurance

inspections for farmers with anomalous claim payments, and because 

FSA does not always communicate its inspection results to RMA in a 

timely manner, RMA and FSA may not know about farmers who 

improperly manage their crops or falsely report losses. FSA state offices 

that do such monitoring seem to encourage a higher completion rate of 

county office field inspections. RMA has also not provided insurance 

companies with most FSA inspection results, particularly findings that 

crops were in good condition, or directed insurance companies to review 

the results of all completed FSA field inspections before paying claims 

that occur after inspections showed a crop was in good condition. As a 

result, insurance companies may not have information that could help 

them identify claims that should be denied.

RMA has also not realized the potential of data mining tools to enhance 

its detection of fraud, waste, and abuse on the part of insurance agents 

and adjusters, including addressing the ARPA requirement to review 

agents and adjusters identified as having anomalous losses.

Furthermore, RMA has not taken steps requiring minimal resources, for 

example, by directing insurance companies, during annual performance 

evaluations of agents and adjusters, to focus more attention on the list of 

agents and adjusters with such losses. In addition, RMA’s electronic form 

does not collect sufficient data from insurance companies on their reviews 

in order to facilitate the use of these reviews in data mining.

To reduce the cost of the crop insurance program, Congress should 

consider limiting the subsidy for premiums that an individual farmer can 

receive each year or reducing the subsidy for all farmers participating in 

the program, or both limiting and reducing these subsidies.

To help prevent and detect fraud, waste, and abuse in the federal crop 

insurance program, we recommend that the Secretary of Agriculture 

direct the Administrator of RMA and the Administrator of FSA, as 

appropriate, to take the following four actions:

• For the list of farmers with anomalous claim payments, encourage the 

completion of FSA county office inspections during the growing 

season by requiring FSA state offices to monitor the status of their 

completion.

• Maximize the use of the list of farmers with anomalous claim 

payments by, for example, ensuring that insurance companies receive 

the results of all FSA field inspections in a timely manner and directing 

Matter for 

Congressional 

Consideration 

Recommendations for 

Executive Action
 

Page 37 GAO-12-256 Crop Insurance

insurance companies to review the results of all completed FSA field 

inspections before paying claims that occur after inspections showed 

the crop was in good condition.

• Increase the use of the list of agents and adjusters with anomalous

losses through actions, such as directing insurance companies, during 

annual performance evaluations of insurance agents and adjusters, to 

focus more of their attention on the list of agents and adjusters with 

anomalous losses.

• Develop a mechanism, such as a revised electronic form, to collect 

additional data from insurance companies in order to facilitate the use 

of the companies’ reviews in data mining.

We provided the Secretary of Agriculture with a draft of this report for 

review and comment. We received written comments from the acting 

USDA Under Secretary for Farm and Foreign Agricultural Services. In 

these comments, the acting Under Secretary stated it was ill advised for 

us to suggest that Congress consider limiting or reducing premium 

subsides without further study. The acting Under Secretary stated that in 

recommending a $40,000 limit on premium subsidies, the report does not 

fully account for all potentially negative impacts and costs resulting from 

such a change. However, as we state in the report, we do not recommend 

a $40,000 limit in premium subsidies per crop insurance participant.

Instead, we used $40,000 as an example of a premium subsidy limit and 

noted that setting a premium subsidy limit higher or lower would have 

corresponding effects on cost savings. In addition, our report recognizes 

that setting a subsidy limit may have impacts, and we discuss some of 

these potential impacts. Moreover, at a time when the agriculture sector is 

enjoying record farm income and higher farmland values and the nation is 

facing severe deficit and long-term fiscal challenges, we believe that crop 

insurance premium subsidies—the single largest component of farm 

program costs—is a potential area for federal cost savings. Furthermore, 

the Administration’s budget for fiscal year 2013 and the Congressional 

Budget Office each proposed a reduction in premium subsidies. These 

subsidies increased fourfold, from $1.7 billion in 2002 to $7.4 billion in 

2011.

USDA agreed with one of our recommendations, and did not directly 

respond to the other three. Regarding our first recommendation—

encouraging the completion of FSA county office inspections for the list of 

farmers with anomalous claim payments by requiring FSA state offices to 

Agency Comments 

and Our Evaluation
 

Page 38 GAO-12-256 Crop Insurance

monitor the status of their completion—USDA stated that it will update its 

written procedures to require FSA state offices to monitor county offices’ 

completion of these inspections.

Regarding our second recommendation—that USDA maximize its list of 

farmers with anomalous claims by providing the results of completed FSA 

inspections to the insurance companies—USDA stated it is unlikely that 

FSA will be able to accomplish this recommendation, but that comment is 

not responsive to our recommendation. We clarified the language to say 

that insurance companies should receive the results of all inspections that 

have been completed. This effort would not entail additional work on the 

part of FSA. RMA’s data mining contractor told us that it could complete 

this activity within a few days after an inspection was completed.

Regarding our third recommendation—to direct insurance companies, 

during annual performance evaluations of insurance agents and 

adjusters, to focus more of their attention on the list of agents and 

adjusters with anomalous losses than on others—USDA reported that it 

was issuing guidance directing companies to provide to USDA the results 

of reviews conducted on each agent/loss adjuster identified on the 

anomalous agent/loss adjuster list provided by RMA. We agree that 

providing guidance to the companies is important and continue to believe 

that directing insurance companies to focus more attention on these 

agents and loss adjusters during annual performance reviews would 

produce additional benefits.

Regarding the fourth recommendation—to develop a mechanism, such as 

a revised electronic form, to collect additional data from insurance 

companies in order to facilitate the use of the companies’ reviews in data 

mining—USDA did not clearly state whether it agreed or disagreed.

USDA stated that as one of its information systems projects matures, it 

will find better ways to record and gather data for data mining. However, 

we continue to believe that the data mining contractor needs additional 

data from insurance company reviews in order to improve data mining, 

and that specific direction from USDA is needed to acquire it.

USDA comments and our response are in appendix V.
 

Page 39 GAO-12-256 Crop Insurance

As agreed with your office, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies of this report to the 

appropriate congressional committees; the Secretary of Agriculture; the 

Director, Office of Management and Budget; and other interested parties. 

In addition, this report will be available at no charge on the GAO website 

at http://www.gao.gov. 

If you or your staff members have any questions about this report, please 

contact me at (202) 512-3841 or shamesl@gao.gov. Contact points for 

our Offices of Congressional Relations and Public Affairs may be found 

on the last page of this report. Key contributors to this report are listed in 

appendix VI. 

Sincerely yours,

Lisa Shames,

Director, Natural Resources

 and Environment
Appendix I: Objectives, Scope, and 

Methodology

Page 40 GAO-12-256 Crop Insurance

Our objectives were to determine (1) the effect on program costs of 

applying limits on farmers’ federal crop insurance subsidies, as payment 

limits are applied to other farm programs, and (2) the extent to which the 

U.S. Department of Agriculture (USDA) has used data mining tools to 

prevent and detect fraud, waste, and abuse in the crop insurance 

program.

To address the first objective, we reviewed eligibility standards, such as 

adjusted gross income limits and payment limits, in the provisions of the 

Food, Conservation, and Energy Act of 2008 (2008 farm bill); other 

statutes; and USDA regulations. We also interviewed officials from 

USDA’s Farm Service Agency (FSA) and Risk Management Agency

(RMA) regarding eligibility standards and payment limits in the 2008 farm 

bill for farm programs other than the crop insurance program. To 

determine the distribution of crop insurance subsidies among farmers 

who participate in the program, we analyzed RMA data for 2010 and 2011 

on the number and percentage of farmers receiving various levels of 

subsidies and the locations of farmers who received higher subsidies. We 

selected $40,000 as an example of a potential subsidy limit because it is 

the payment limit for direct payments. Many participants in the crop 

insurance program also participate in other farm programs that are 

administered by USDA’s Farm Service Agency (FSA). Many of these 

other farm programs have payment limits based on benefits that are 

attributed to each interest holder in a farming operation. Under a scenario 

of a limit on premium subsidies, it is likely these same rules regarding the 

attribution of benefits would also apply to premium subsidies for the crop 

insurance program. Therefore, in our analysis, we attributed these 

subsidies for each policy to the interest holders in the policy. We did so 

based on the payment share of each interest holder as recorded in FSA’s 

validated Permitted Entity database that is used to ensure compliance 

with payment limit rules. For entities, we attributed benefits through four 

levels, as appropriate. We summed premium subsidies across policies for 

each crop insurance participant. For those that were not found in FSA’s 

Permitted Entity database or if RMA’s database contradicted FSA’s 

Permitted Entity database, we attributed premium subsidies by dividing it 

equally among the policy holder and the interest holders as reported in 

RMA’s database. These participants represented 18.5 percent of the 

entities.

We also reviewed USDA and other studies that examined participation in 

the crop insurance program and premium subsidies. In addition, we 

reviewed USDA data on the financial condition of farms of various sizes. 

Furthermore, we reviewed USDA reports on the availability of private risk 

Appendix I: Objectives, Scope, and 

Methodology 
Appendix I: Objectives, Scope, and 

Methodology

Page 41 GAO-12-256 Crop Insurance

management tools against crop losses and the effects of farm program 

subsidies on beginning and smaller farmers. Finally, we reviewed farm 

and crop insurance industry organizations’ statements on the crop 

insurance program.

To determine the extent to which USDA has used data mining tools to 

prevent and detect fraud, waste, and abuse in the crop insurance 

program, we analyzed how RMA uses two data mining lists—the list of 

farmers with anomalous claim payments and the list of insurance agents 

and adjusters with anomalous losses—and the methods it uses to 

develop these lists. We reviewed requirements in the Agricultural Risk 

Protection Act of 2000 and the current and former standard reinsurance 

agreement related to data mining, FSA guidance for field inspections, 

FSA letters to farmers with anomalous claim payments, data analyses 

and summaries on data mining tools developed by RMA’s data mining 

contractor, USDA’s Inspector General reports and testimonies, and 

reports of RMA completion of disaster payment reconciliations. We also 

interviewed RMA data mining contractor staff, and RMA officials at 

headquarters and six regional compliance offices to identify RMA’s uses 

of these data mining tools, weaknesses found in the tools, opportunities 

for increased use of them, or competing RMA priorities. We also 

interviewed officials with USDA’s Office of Inspector General on their 

views and uses of these tools. In addition, we worked with RMA’s data 

mining contractor to analyze 2009 and 2010 data on FSA’s completion of 

field inspections for policies of those farmers listed as having anomalous 

claim payments. We conducted tests of the reliability of the data, such as 

checking formulas, and found the data to be sufficiently reliable for the 

purposes of this report. We also interviewed officials with RMA and its 

data mining contractor to determine the process used to acquire FSA’s 

field inspection data. We interviewed officials with FSA’s headquarters 

office and the five FSA state offices for California, Colorado, Florida, 

North Dakota, and Texas to obtain information about these data, 

obstacles to completing the inspections, and suggestions for increasing 

their completion and reporting.1

 

1

One of the five officials we interviewed had been located in the Minnesota FSA office and 

informed us of the practices of this office. 

We selected FSA’s North Dakota office 

because of its high completion rate of field inspections (96 percent) for 

2009 and 2010 and large number of requests for field inspections (378). 

We selected the other four state offices because, over the 2-year period, 
Appendix I: Objectives, Scope, and 

Methodology

Page 42 GAO-12-256 Crop Insurance

they had low completion rates of field inspections (less than 33 percent)

and at least 80 requests for field inspections.

We conducted this performance audit from January 2011 to March 2012 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: Income and Payment Limits for 

Selected Farm Programs

Page 43 GAO-12-256 Crop Insurance

Program/payment category Income limit Payment limit

Commodity programs 

a 

Direct and Countercyclical Program 

countercyclical payments 

$500,000 (average adjusted gross nonfarm 

income over the 3 preceding tax years). 

$65,000 

Direct and Countercyclical Program direct 

payments 

$500,000 (average adjusted gross nonfarm 

income over the 3 preceding tax years).

$750,000 (average adjusted gross farm income 

over the 3 preceding tax years). 

$40,000b

Loan Deficiency Payments 

 

$500,000 (average adjusted gross nonfarm 

income over the 3 preceding tax years). 

No limit 

Disaster programs 

Supplemental Revenue Assistance 

Payments 

$500,000 (average adjusted gross nonfarm 

income over the 3 preceding tax years). 

$100,000 

Noninsured Crop Disaster Assistance $500,000 (average adjusted gross nonfarm 

income over the 3 preceding tax years). 

$100,000 

Conservation programs 

Conservation Reserve $1,000,000 (average adjusted gross nonfarm 

income over the 3 preceding tax years).c $50,000 (annual rental payment)  

Environmental Quality Incentives $1,000,000 (average adjusted gross nonfarm 

income over the 3 preceding tax years).

$300,000 (total for all contracts for 

fiscal years 2009 through 2012) c 

Source: GAO analysis of USDA information.

Notes:

The income limits apply to a person or legal entity.

A husband and wife may divide their income for the income limit test as if separate income tax returns 

had been filed.

A husband and wife can each receive a payment, which enables them collectively to receive up to 

double the payment limit annually.

a

Payment limits are for 1 year unless otherwise specified.

b

Under the Average Crop Revenue Election Program, farmers may receive revenue-based payments 

as an alternative to receiving certain other types of farm program payments and must forgo 20 

percent of their direct payments.

c

This limit does not apply if more than 66.66 percent of the adjusted gross income—total of nonfarm

adjusted gross income and farm adjusted gross income—was farm income.

Appendix II: Income and Payment Limits for 

Selected Farm Programs
Appendix III: Locations of Participating 

Farmers Receiving More than $40,000 in 

Premium Subsidies, 2011

Page 44 GAO-12-256 Crop Insurance

Figure 6 shows the locations of participating farmers who received more 

than $40,000 in premium subsidies for 2011. As the figure shows, many 

of these farmers were in the northern and southern plains. According to 

RMA officials, a region might have more farmers who received more than 

$40,000 in premium subsidies because farmers in the region have largeacreage farms; produce high-value crops, such as sugar beets; or have 

higher premium rates. For example, the average farm size in North 

Dakota is 1,241 acres, but the average size nationwide is 418 acres.1

 

1

U.S. Department of Agriculture, National Agricultural Statistics Service, 2007 Census of 

Agriculture (Washington, D.C.: December 2009). 

In 

addition, high-value crops, such as sugar beets in North Dakota and fruits 

and vegetables in California, contribute to higher premiums and premium 

subsidies. Regarding premium rates, areas that have a higher risk of crop 

loss generally have higher premium rates. For example, the average 

premium rate in North Dakota is 17 percent, and the average premium 

rate nationwide is 10 percent.

Appendix III: Locations of Participating 

Farmers Receiving More than $40,000 in 

Premium Subsidies, 2011
Appendix III: Locations of Participating 

Farmers Receiving More than $40,000 in 

Premium Subsidies, 2011

Page 45 GAO-12-256 Crop Insurance

Figure 6: Locations of Participating Farmers Receiving Premium Subsidies of More Than $40,000, 2011
Appendix IV: Information on the Levels of 

Premium Subsidies and Administrative 

Expense Subsidies for Individual Farmers

Page 46 GAO-12-256 Crop Insurance

Number of farmers by year

Levels of subsidies received by 

individual farmers Subsidy type 2010 2011

$1-$10,000 Premium 754,716 678,099 a

Premium and administrative expense 715,822 631,332 b

$10,001-$20,000 Premium 76,818 101,811

Premium and administrative expense 92,507 115,092

$20,001-$30,000 Premium 25,767 40,775

Premium and administrative expense 34,438 49,713

$30,001-$40,000 Premium 11,243 20,259

Premium and administrative expense 16,118 26,776

$40,001-$50,000 Premium 5,374 11,445

Premium and administrative expense 8,683 15,758

$50,001-$60,000 Premium 2,876 7,038

Premium and administrative expense 4,904 10,222

$60,001-$70,000 Premium 1,737 4,545

Premium and administrative expense 2,858 6,870

$70,001-$80,000 Premium 939 3,040

Premium and administrative expense 1,895 4,690

$80,001-$90,000 Premium 676 2,023

Premium and administrative expense 1,283 3,407

$90,001-$100,000 Premium 447 1,397

Premium and administrative expense 765 2,435

More than $100,000 Premium 1,260 4,202

Premium and administrative expense 2,580 8,339

Total farmers 881,853 874,634

Source: RMA.

a

For 754,716 participating farmers, 2010 premium subsidies ranged from $1 to $10,000.

b

Appendix IV: Information on the Levels of 

Premium Subsidies and Administrative 

Expense Subsidies for Individual Farmers

For 715,822 participating farmers, the sum of 2010 premium subsidies and 2010 administrative 

expense subsidies ranged from $1 to $10,000.
Appendix V: Comments from the U.S. 

Department of Agriculture

Page 47 GAO-12-256 Crop Insurance

Appendix V: Comments from the U.S. 

Department of Agriculture

See comment 1.

Note: GAO’s comments 

supplementing thse in 

the report text appear at 

the end of this appendix.
Appendix V: Comments from the U.S. 

Department of Agriculture

Page 48 GAO-12-256 Crop Insurance

See comment 7.

See comment 6.

See comment 5.

See comment 4.

See comment 3.

See comment 2.

See comment 5.

See comment 5.

See comment 5.
Appendix V: Comments from the U.S. 

Department of Agriculture

Page 49 GAO-12-256 Crop Insurance

See comment 11.

See comment 6.

See comment 8.

See comment 9.

See comment 10.

See comment 12.
Appendix V: Comments from the U.S. 

Department of Agriculture

Page 50 GAO-12-256 Crop Insurance

See comment 15.

See comment 14.

See comment 13.
Appendix V: Comments from the U.S. 

Department of Agriculture

Page 51 GAO-12-256 Crop Insurance

See comment 16.
Appendix V: Comments from the U.S. 

Department of Agriculture

Page 52 GAO-12-256 Crop Insurance

The following are GAO’s comments on the U.S. Department of 

Agriculture’s letter dated February 17, 2012. 

1. As we clearly state in the report, we do not recommend a $40,000 

limit in premium subsidies per crop insurance participant. Instead, as 

we stated, we used $40,000 as an example of a premium subsidy limit 

and noted that setting a premium subsidy limit higher or lower would 

have corresponding effects on cost savings. In this connection, we 

provided information on the potential savings that would result if 

premium subsidies were limited to $100,000. Furthermore, limits on 

premium subsidies would not prevent potentially affected farmers from 

enrolling all of their crop acres in the crop insurance program and 

receiving claim payments when a loss occurs. The report also notes 

that savings could result from reducing the subsidy amount for all 

farmers participating in the program, or both limiting and reducing 

these subsidies. In proposing these changes to the crop insurance 

program, we also identified other considerations that would come into 

play, including the potential effect on large farms’ financial condition 

and on participation in the crop insurance program.

2. We disagree. This report does show regions of the country that would 

be more affected by a limit on premium subsidies. On page 19, we 

state that many of the participating farmers who received more than 

$40,000 in premium subsidies were in the northern and southern 

plains. Additional information on the locations of participating farmers 

who received more than $40,000 in premium subsidies for 2011 is 

presented in appendix III.

3. An assessment of the availability of credit to the agricultural sector 

was not the focus of our work, but our review of data from USDA’s 

Agricultural Resource Management Survey shows that larger farms, 

which are more likely to be affected by a limit on premium subsidies, 

generally have stronger financial ratios and credit worthiness than 

other farms participating in the crop insurance program. (See pages 

21 and 22 of this report.) Furthermore, since we sent our draft report 

to USDA for comment, we identified two Federal Reserve Bank 

reports—one from the Federal Reserve Bank of Chicago, and one 

from the Federal Reserve Bank of Kansas City—that reported that 

credit conditions for farmers are favorable. In addition, if premium 

subsidies were limited, an affected farmer could still purchase crop 

insurance, although the premiums might not be subsidized or 

subsidized less than currently. Thus, an affected farmer would not 

lose access to credit.

GAO Comments
Appendix V: Comments from the U.S. 

Department of Agriculture

Page 53 GAO-12-256 Crop Insurance

4. USDA did not adjust its estimate of affected crop insurance 

participants and savings in premium subsidies to reflect how a limit on 

premium subsidies might actually be implemented. That is, we 

assume that any subsidy limit would be administered as USDA’s Farm 

Service Agency (FSA) administers payment limits for other farm 

programs—allocating the benefits according to the interest holders in 

the farming operation. Most participants in the crop insurance 

program also participate in other farm programs that FSA administers, 

and many of these other farm programs have payment limits based on 

benefits that are attributed to each interest holder in a farming 

operation. As explained in our methodology, in developing our 

estimate for a potential $40,000 subsidy limit, we used the payment 

share of each interest holder as recorded in FSA’s validated Permitted 

Entity database, which FSA uses to ensure compliance with payment 

limit rules for farm programs. Using FSA’s information on the payment 

share of each interest holder, we attributed subsidies for each crop 

insurance policy to the interest holders in the policy. Therefore, we 

estimated that up to 33,690 participating farmers would have been 

affected in 2011 by a reduced subsidy, for a savings of up to $1 billion 

if a $40,000 subsidy limit were applied. We believe our analysis 

provides a reasonable estimate of the number of participating farmers 

who might be affected by a limit on premium subsidies and the dollars 

that might be saved. (See app. I for more information on our 

methodology.)

5. As we note in this report, a limit on crop insurance premium subsidies 

would affect more farmers in some areas of the country than in other 

areas. We also note in the report that large farms are better 

positioned than smaller farms to pay a higher share of their premiums.

Furthermore, a higher limit on premium subsidies would affect fewer 

farmers. In addition, limits on farm program benefits already have 

disproportionate impacts. For example, under the Supplemental 

Revenue Assistance Payments program and Noninsured Crop 

Disaster Assistance program, annual payments are limited to 

$100,000, which disproportionately affects farmers in regions that are 

more prone to natural disasters.

In addition to a limit on premium subsidies, this report also examines 

reducing premium subsidy rates for all farmers, which would have a 

more proportionate effect across states and regions. However, it 

would also reduce subsidies for those who may be less able to afford 

higher premiums, particularly beginning and limited resource farmers, 

as well as socially disadvantaged farmers.
Appendix V: Comments from the U.S. 

Department of Agriculture

Page 54 GAO-12-256 Crop Insurance

6. We do not agree that it would be virtually impossible to 

administratively track and control a limit on premium subsidies. Most 

farmers participating in the crop insurance program also participate in 

other farm programs that FSA administers. Many of the farm 

programs FSA administers already limit the payments an individual 

can receive. Therefore, we believe that FSA’s methods—which 

account for complicating factors such as the organization of farm 

businesses and multiple crops in multiple counties, and even multiple 

programs—could be applied to a limit on premium subsidies for crop 

insurance and that any addition to administrative burdens would not 

be significant. Moreover, as we stated in our report, premium subsidy 

rates vary by the level of insurance coverage that the farmer chooses 

and the geographic diversity of the crops insured. If RMA is capable of 

tracking these different subsidy rates, we believe USDA can also 

administer a subsidy limit.

7. We believe it would not be impractical to administer a limit on 

premium subsidies because of differences in dates and insurance 

periods. FSA attributes benefits to each individual or entity for each 

program that it administers. For each participant in a given program, 

payments are summed across all entities, crops, and counties for the 

crop year. Regarding livestock insurance, the amount of insurance 

purchased in comparison with crop insurance is very small. Moreover, 

this report did not discuss combining limits on premium subsidies for 

livestock insurance and crop insurance.

8. We do not agree that a limit on premium subsidies would prevent 

farmers from making sound and informed insurance choices. Under 

the crop insurance program, the amounts of a farmer’s premium 

subsidy and premium expense are estimated during the period before 

planting, when the farmer is making insurance choices. However, 

insurance companies determine the actual premium later in the 

growing season and bill the farmer at the end of the growing season. 

Therefore, to the extent that a limit on premium subsidies introduces 

additional uncertainty, it would likely be marginal.

9. We believe it is unlikely that a limit on premium subsidies would affect 

agricultural lenders’ decisions in providing farm operating loans. It is 

not clear how a limit on premium subsidies would introduce so much 

uncertainty about the amount of a farmer’s premium expenses that a 

lender could not decide whether to provide financing. Agricultural 

lenders already deal with a level of uncertainty about farmers’ 

revenues and expenses. In addition, lenders could require borrowers 

to purchase crop insurance.
Appendix V: Comments from the U.S. 

Department of Agriculture

Page 55 GAO-12-256 Crop Insurance

10. As we stated in this report, the amount of savings from a limit on 

premium subsidies may depend on whether, and to what extent, 

farmers and legal entities reorganized their business to avoid or 

lessen the effect of limits on premium subsidies. In addition, some 

farmers would likely begin to report their spouse as a member of the 

farming operation, which, under payment limit rules, enables an 

operation to double the amount of benefits it can receive. Regarding 

potential reorganizations, most of the farmers and legal entities who 

participate in the crop insurance program also participate in FSA 

programs, and many of them have already reorganized their business 

because of these programs’ payment limits. These farmers and legal 

entities would be unlikely to reorganize further in response to a limit 

on premium subsidies. In addition, in some instances, the requirement 

that an individual or entity be actively engaged in farming to receive 

farm program benefits is likely to prevent the creation of entities in 

order to avoid a limit on premium subsidies. Furthermore, the 2008 

farm bill decreased the incentive to reorganize a farming operation in 

order to avoid a limit on farm program payments by eliminating the 

“three-entity rule” and requiring direct attribution of payments to 

individuals.

11. This report includes information about how crop insurance 

participation and coverage levels may relate to spending on ad hoc 

disaster assistance. The report also notes that in view of the nation’s 

budgetary pressures, Congress may be less willing to approve ad hoc 

disaster assistance payments than it has in the past. In addition, the 

Administration’s proposed fiscal year 2013 budget addresses 

participation and ad hoc disaster assistance and states, “With current 

participation rates, the deep premium subsidies are no longer 

needed.” 

12. In addition to federal cost savings, our report discussed several 

considerations that would come into play with limits on premium 

subsidies. Furthermore, we noted that FSA has extensive experience 

in administering limits on farm program benefits, which USDA does 

not recognize in its comments. We believe RMA could benefit from 

FSA’s experience in administering payment limits.

13. We recognize that FSA, like most federal agencies, faces resource 

constraints. However, as we have previously reported, effective 

strategies help set priorities and allocate resources to inform decision 

making and help ensure accountability. Such priority setting and 

resource allocation is especially important in a fiscally constrained 

environment.
Appendix V: Comments from the U.S. 

Department of Agriculture

Page 56 GAO-12-256 Crop Insurance

14. We clarified the language to say that insurance companies should 

receive the results of all inspections that have been completed. This 

effort would not entail additional work on the part of FSA. RMA’s data 

mining contractor told us that it could complete this activity within a 

few days after an inspection was completed.

15. We are pleased that RMA is developing guidance and believe that this 

guidance may be a good first step towards increasing insurance 

companies’ focus on anomalous agents and loss adjusters, who 

warrant greater attention. However, we continue to believe that 

directing insurance companies to focus more attention on these 

agents and loss adjusters during annual performance reviews would 

produce additional benefits.

16. It is unclear from RMA’s response whether it agrees or disagrees with 

our recommendation. However, we continue to believe that the data 

mining contractor needs additional data from insurance company 

reviews in order to improve data mining and specific direction from the 

government to collect these data.
Appendix VI: GAO Contact and Staff 

Acknowledgments

Page 57 GAO-12-256 Crop Insurance

Lisa Shames, (202) 512-3841, or shamesl@gao.gov

In addition to the individual named above, Susan Offutt, Chief Economist; 

Thomas M. Cook, Assistant Director; Kevin S. Bray; Gary T. Brown; 

Barbara J. El-Osta; Beverly Peterson; Anne Rhodes-Kline; Jeremy 

Sebest; and Carol Herrnstadt Shulman made key contributions to this 

report.

Appendix VI: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 
Related GAO Products

Page 58 GAO-12-256 Crop Insurance

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the Program. GAO-09-445. Washington, D.C.: April 29, 2009.

Crop Insurance: Continuing Efforts Are Needed to Improve Program 

Integrity and Ensure Program Costs Are Reasonable. GAO-07-944T. 

Washington, D.C.: June 7, 2007.

Crop Insurance: Continuing Efforts Are Needed to Improve Program 

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Climate Change: Financial Risks to Federal and Private Insurers in 

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Climate Change: Financial Risks to Federal and Private Insurers in 

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Suggested Areas for Oversight for the 110th Congress. GAO-07-235R. 

Washington, D.C.: November 17, 2006.

Crop Insurance: More Needs to Be Done to Reduce Program’s 

Vulnerability to Fraud, Waste, and Abuse. GAO-06-878T. Washington, 

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Crop Insurance: Actions Needed to Reduce Program’s Vulnerability to 

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Crop Insurance: USDA Needs to Improve Oversight of Insurance 

Companies and Develop a Policy to Address Any Future Insolvencies.

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Department of Agriculture: Status of Efforts to Address Major Financial 

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Crop Insurance: USDA Needs a Better Estimate of Improper Payments to 

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Crop Insurance: USDA’s Progress in Expanding Insurance for Specialty 

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Crop Insurance: Increases in Insured Crop Prices and Premium Rates 

Raise the Administrative Expense Reimbursement Paid to Companies.

GAO/RCED-98-115R. Washington, D.C.: March 20, 1998.

Crop Insurance: Opportunities Exist to Reduce Government Costs for 

Private-Sector Delivery. GAO/RCED-97-70. Washington, D.C.: April 17, 

1997.

Crop Insurance: Federal Program Faces Insurability and Design 

Programs. GAO/RCED-93-98. Washington, D.C.: May 24, 1993.

Crop Insurance: Program Has Not Fostered Significant Risk Sharing by 

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1992.

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