FSA has overall responsibility for administering crop disaster programs, including ensuring that recipients meet eligibility requirements and do not receive payments that exceed program limitations. FSA guidance directs the agency to annually notify every farming operation—whether an individual farmer or an entity, such as a corporation or a partnership—that it must file documents, including a farm operating plan and an acreage report, with its local FSA county office if the operation is seeking farm program payments. These documents record farming information, such as which crops are planted on each field, the farming practices used, and the name of each individual with an interest in the farming operation. FSA uses this information to determine farm program payments, including payments for various agriculture disaster assistance programs. According to USDA documents, agriculture-related disasters are common: one-half to two-thirds of the counties in the United States have been designated as disaster areas in each of the past several years. As shown in figure 1, many counties received disaster designations for multiple years from 2001 through 2007. In order for a county to qualify for a USDA secretarial disaster designation, a disaster must have caused a minimum loss of 30 percent of production of at least one crop in the county. The secretarial disaster designation process begins when an eligible disaster event, such as hail or drought, occurs in a county. After monitoring and recording the disaster conditions, local officials, including FSA county officials, contact their governor to request a disaster designation for the county. Next, the governor submits a written disaster designation request to the Secretary of Agriculture. As a result of this request, FSA directs its county officials to complete a damage assessment report to show whether the minimum loss requirement was met. A state emergency board reviews the report, and if the report is approved, it is forwarded to FSA’s national headquarters for the Secretary of Agriculture’s approval or disapproval of the request. The approved counties are designated as disaster counties. RMA has overall responsibility for administering the federal crop insurance program, through the Federal Crop Insurance Corporation, and in partnership with private insurance companies that share a percentage of the risk of loss or opportunity for gain associated with each insurance policy written. RMA is also to address program compliance issues, including protecting the program against fraud, waste, and abuse. Under the Agricultural Risk Protection Act of 2000, RMA uses information technologies, such as data mining, to identify anomalous patterns of crop insurance claims payments that are consistent with actions farmers could take to obtain personal benefit through fraud or abuse of the crop insurance program. RMA has identified 45 patterns of crop insurance payments that it defines as anomalous, such as receiving payments while experiencing high frequency of losses or high severity of losses in comparison with surrounding farming operations; using poor farming practices; or exhibiting irregular behavior with insurance agents or adjusters that suggests collusion. RMA’s data mining does not identify specific instances of fraud or abuse of the crop insurance program; rather, it identifies anomalous patterns of crop insurance claims payments that are consistent with the potential for fraud and abuse and considers these payments as “suspicious.” RMA places farmers who exhibit such patterns on an annual list, after the year in which the crop insurance claims payments are made, to monitor their current or future farming practices. Farmers may be on the list for multiple anomalous patterns in 1 year. RMA provides its annual list to the appropriate FSA state offices for distribution to FSA county offices, as well as to the insurance company selling the policy to the farmer. Staff in FSA county offices advise the selected farmers that they have been identified for an inspection as a result of data mining and conduct field inspections during the growing season. In conducting these inspections, FSA inspectors are to determine, among other things, the tillage method used; weed control practices; type and amount of fertilizer applied; weather conditions; and how the inspected crop compares with others in the area. As a result of these inspections and other information, RMA reported total cost savings from 2001 through 2007 of $564 million, primarily in the form of estimated claims payments avoided: $140 million in 2005, $27 million in 2006, and $85 million in 2007. RMA has the authority to impose sanctions against farmers, agents, loss adjusters, and insurance companies that willfully and intentionally provide false or inaccurate information to RMA or to insurance companies. RMA also has the authority to disqualify farmers who have committed a violation not only from the insurance program but also from most other farm programs for up to 5 years. RMA also can refer suspicious crop insurance claims payments to USDA’s Office of Inspector General, which can open investigations and, when warranted, refer cases to the Department of Justice for prosecution. Through supplemental appropriations, Congress authorized three multiyear crop disaster programs for 2001 through 2007. The first program provided financial assistance for crop losses that occurred in crop year 2001 or 2002. The second program provided assistance for losses in 2003 or 2004 or for losses in 2005 that resulted from a hurricane or tropical storm during the 2004 hurricane season. The third program provided assistance for crop losses in 2005, 2006, or 2007. Generally, under each program, crop losses were eligible for crop disaster payments if the losses resulted from any of the following: (1) damaging weather, such as drought, excessive moisture, hail, freeze, tornado, or hurricane; (2) an adverse natural occurrence, such as an earthquake; or (3) a condition related to damaging weather or an adverse natural occurrence such as saltwater intrusion, rationing of irrigation water, disease, or insect infestation. The authorizing statutes and program regulations established payment limitations and eligibility requirements for the three crop disaster programs. For example, the statutes prohibited producers—who we refer to as farmers in this report—from receiving a payment for more than 1 year for each of the multiyear disaster programs. In addition, USDA regulations prohibited an individual farmer or member of a farming operation from receiving a crop disaster payment greater than $80,000. Regarding eligibility requirements, the statutes provided that farmers were only eligible to receive crop disaster payments if they had previously obtained federal crop insurance or coverage through FSA’s Noninsured Crop Disaster Assistance Program for the crop that suffered weather- related damage. Specifically, for crops covered by the federal crop insurance program (insured crops), farmers must have obtained crop insurance coverage through that program. For crops for which insurance was not available in the county where the crops were farmed (noninsurable crops), farmers must have obtained coverage through the Noninsured Crop Disaster Assistance Program. “Uninsured crops,” for the purposes of this report, refers to crops for which coverage was available in the county under either the federal crop insurance program or the Noninsured Crop Disaster Assistance Program, but the farmer did not purchase it. Not all uninsured crops were eligible for payment under the crop disaster programs. Furthermore, a statutory payment cap prohibited USDA from paying an individual or a farming operation for more than 95 percent of what the value of the crop would have been in the absence of the loss (expected value). Specifically, the sum of the disaster payment, the value of the salvageable crops, and any crop insurance payments could not exceed 95 percent of the crop’s expected value in the absence of a disaster. The 2008 farm bill authorized and funded a new disaster program for losses in crop years 2008 through 2011. This new program provides funds that will be available to assist farmers when disasters occur, without the need for further congressional action. While the past crop disaster programs separately considered each individual field, the new disaster program considers aggregate losses on an entire farming operation, which includes all land in all counties where a farmer planted or intended to plant crops for harvest. To be eligible under the new program, a farming operation must be located in or contiguous to counties that received a USDA secretarial disaster designation and have lost at least 10 percent of production on at least one crop of economic significance; or incur eligible total crop losses of greater than 50 percent of the normal production, including a loss of at least 10 percent of production on at least one crop of economic significance. Furthermore, farmers 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 in order to qualify for a disaster payment. In addition, the 2008 farm bill prohibits any individual or member of a farming operation from receiving more than $100,000 per year in combined payments from the new crop disaster program and other disaster programs for livestock and specialty crops. See appendix II for additional information on the Supplemental Revenue Assistance Payments Program. USDA’s Office of Inspector General identified problems under the past crop disaster programs. For example, in 2006, the Office of Inspector General reported reviewing three FSA county offices, one of which issued $103,065 in crop disaster payments to farmers who did not meet program eligibility requirements under the 2001 through 2002 crop disaster program. The Office of Inspector General found that in that county office, FSA relied on verbal statements from some farmers to determine their eligibility for crop disaster program payments. The Office of Inspector General also found weaknesses in FSA’s management controls for the crop disaster programs in all three FSA county offices in its review. For example, the Office of Inspector General found that the three FSA county offices were not following the program guidance for verifying the accuracy of crop disaster payments—which states that FSA county offices are to perform three types of reviews to ensure the accuracy of payments—nor consistently interpreting or using data from RMA’s crop insurance program when calculating crop disaster payments. The Office of Inspector General recommended that FSA improve its training of county office employees. In addition, we and others have long raised concerns about the potential for waste and abuse in the federal crop insurance program. For example, in 2005, we reported that while RMA strengthened procedures for preventing questionable crop insurance claims, the federal crop insurance program remains vulnerable to abuse.