The USDA estimates $160 million was paid out last year in false crop insurance claims.
John Burnett, NPR
Robert O'Conner, a senior investigator in the Dallas office of the Risk Management Agency, examines a damaged corn crop to find out whether drought — or foul play — was the cause.
Texas farmer Wendell Mints collected more than $500,000 from the federal government for bogus claims on cotton and grain sorghum crops. Satellite imagery showed that Mints was not growing anything in some fields where he claimed to have a crop.
Texas farmer Wendell Mints collected more than $500,000 from the federal government for bogus claims on cotton and grain sorghum crops. Satellite imagery showed that Mints was not growing anything in some fields where he claimed to have a crop. USDA
The growth in cases of multi-million-dollar agriculture fraud has prompted the federal government to step up its policing of farm country.
Once reliant on the honor system, the U.S. Department of Agriculture now looks over the farmer's shoulder to make sure he's not cheating the system. To do this, investigators rely on an array of high-tech techniques.
John Brown is an agricultural private investigator in a tiny but busy field these days. As the only satellite-imagery farm detective in the country, he's testified as an expert witness in 26 cases over the past six years, mostly for the government prosecuting farmers.
"When I saw the extent of this fraud, it was alarming to me," Brown says. "I couldn't believe that tens or hundreds of millions of dollars were being wasted."
Brown and his daughter work out of a home office on a tree-lined street in Columbia, Mo. He downloads photographs of the Earth's surface taken by orbiting Landsat satellites. Then he analyzes the infrared images of crop fields to determine whether the farmer actually planted what he claims he did.
A big man with a trim mustache, Brown sits at his desktop computer and points to a plot tinted red, amid a checkerboard of fields in a PowerPoint presentation. "This was presented to a federal jury in Texas," Brown explains. "This is a satellite image showing a 640-acre section that was claimed to have been planted with cotton."
The images helped to convict a North Texas farmer for submitting false insurance claims for crops he never planted, and for which he collected more than $500,000 in insurance.
"From this satellite image we were able to show that the field was not even plowed. It wasn't planted with cotton or grain sorghum," Brown says.
Brown is also a former horticulture professor; his grandfather was a dairy farmer. He gets no joy out of taking the stand and presenting evidence that sends a farmer to prison.
"I see the wife in the courtroom sitting behind her husband who she loves dearly," says Brown. "I see that man, I see his hands shaking. I love farmers, I've worked with them virtually all my life. And when I see a farm family broken apart, it's hard for me."
Alarmed at the level of cheating going on in the nation's federal crop insurance program, Congress passed legislation in 2000 that instructed the USDA to get tough on dishonest farmers.
The agency that oversees crop insurance, the Risk Management Agency, contracted with a data-mining company near Fort Worth, Texas, to analyze millions and millions of farm records to look for anomalies.
Bert Little is director of the Center for Agribusiness Excellence, located on the campus of Tarleton State University in Stephenville, Texas.
"Let's say there's a fictitious county where you have 10,000 people who are farming corn," he says, "and out of that 10,000 people only one person has a disastrous loss and he's right in the middle of all the other people who are having great yields. It just doesn't fit."
Searching for the most egregious cases, his data analysts identify about 2,000 farmers every year with questionable insurance claims. Beginning in 2001, some of these farmers received a letter telling them they were on a watch list, and a remarkable thing happened. The amount of insurance claims filed dropped by more than $300 million over the next four years.
"If they know we're watching, then the next year they either file no claim or a very small claim," Little says. "We think it's because they may not have been doing business completely honestly. And if they know they're going to receive a visit, they try to tidy up."
The USDA estimates $160 million was paid out last year in false crop insurance claims. Data-mining is most useful as a pointer; it creates a list of suspicious farmers who must then be "ground-truthed."
About an hour west of Houston, in Colorado County, Texas, there's a cornfield in sad shape. The stalks are stunted and the corn shriveled. This is the fifth year in a row this farmer has filed an insurance claim on a bad crop, and the government wants to know why.
Robert O'Conner is a senior investigator in the Dallas office of the Risk Management Agency. O'Connor has a list of questions for the farmer: What was his weed control; what was his pest control, and does he have records to support his claimed farming practices.
With that information compared to observation of the crop, investigators are able to determine whether the producer made an effort to produce a crop, and whether, due to natural causes, he had a loss.
On the Colorado County farm, a loss adjustor and an insurance claims specialist weigh the cobs to see how underweight the corn is. It appears this crop was stressed by drought and the farmer will have a legitimate loss.
In years past, a farmer perpetrating fraud was treated with kid gloves by the government, but O'Conner says those days are over. "We're getting harder on the fraud and abuse now. We're going after them, putting them in jail, we're requiring restitution. So the penalties are stiffer," he says.
Everyone interviewed for this series — investigators, prosecutors, farmers, watchdogs and government regulators — says the number of farmers who cheat the system is relatively small. But the schemes, which have grown larger in recent years, have done great damage to the many producers for whom crop insurance is critical.
"Without insurance, we in West Texas would not be able to farm. We have to have that protection," says Daylon Althof, a farmer in Nolan County, who was a member of the local Farm Service Agency committee that blew the whistle on a cotton field scam that sent five people to prison in 2001.
"When farmers like this take advantage of the situation and milk the system for their own benefit, it will hurt us. If they are caught, the government does not like to be defrauded, and it's made the insurance program more strict."
The harm goes even deeper. It's one thing when a corporate CEO is indicted in Houston. It's another when four farmers are convicted in the little town of Roscoe, Texas, where Althof lives, farms, shops and goes to church.
"This has had a devastating effect on our community nucleus. And there were friends of those convicted farmers that won't speak to me," says Althof.
But Daylon Althof would still turn his friends in if he had to do it all over again. "We're here to farm the land, we're not here to farm the program," he says.