In February 2003, cattle rancher Nico de Boer in Texas watched the space shuttle Columbia break up in the sky above his ranch. Weeks later he was surprised to learn that because of that disaster he was one of hundreds of Texas ranchers entitled to up to $40,000 in federal disaster compensation funds, even though the nearest debris landed 10 to 20 miles from his cattle.
He took the money. Would you?
Welcome to the Livestock Compensation Program, a program cobbled together hurriedly in 2002 for political reasons (to help elect Republican Sen. John Thune in South Dakota) that managed to funnel $1.2 billion of the taxpayers’ money to ranchers, most of whom suffered no damage or loss and many of whom tried at first to return the checks, during its two years of existence.
The Washington Post, doing what you would hope a free press would do often — letting taxpayers know how the government is wasting their money — but which happens all too infrequently, has done a fascinating investigative story on this obscure boondoggle.
The program was originally designed to provide a limited helping hand to dairy farmers and ranchers hurt by drought in 2002. But it grew like Topsy. For starters, ranchers were not required to show actual damage from the drought. The government simply sent them a check based on the number of head of cattle they ran. Then ranchers in counties that had not been declared drought “disaster areas” complained to their congressmen, and that fussy requirement was dropped. Anything weather-related would do. The floodgates opened.
The only thing needed, before sending checks to people who owned hundreds or thousands of acres and thousands of head of cattle, was some evidence of weather-related problems. So, the Post wrote, “USDA (U.S. Department of Agriculture) administrators prodded employees in the agency’s county offices to find qualifying disasters, even if they were two years old or had nothing to do with ranching or farming.
“In one county in northern Texas, ranchers collected $1 million for an ice storm that took place a year and a half before the livestock program was even created. In Washington state, ranchers in one county received $1.6 million for an earthquake that caused them no damage. In Wisconsin, a winter snowstorm triggered millions of dollars more. For hundreds of ranchers from East Texas to the Louisiana border, the shuttle explosion opened the door to about $5 million, records show.”
Blake English, USDA administrator in Denton County, Texas, wrote in the minutes of a December 2002 farm advisory meeting that county ranchers hadn’t been hurt by any drought in 2002. “Still, in 2003, English said, he got word from his state bosses to go back and look again for a disaster — any disaster — under which local ranchers would qualify.” There was no drought — in fact it was a wet year — so they prepared a report on a fairly severe rainstorm more than a year earlier.
In Wisconsin, after a snowstorm two years earlier, the top state USDA official sent letters imploring dairy farmers to fill out a simple form so they could get in on the bounty. It was an offer they didn’t refuse, to the tune of $39 million.
To be sure, the program was ended after 2003. And while we don’t expect anything so sensible as eliminating the Department of Agriculture and all agriculture subsidies, maybe Congress could craft the next giveaway program so as not to be quite so blatantly wasteful?