Lawmakers hardly needed another reason to exercise their authority to oversee the Farm Credit System (FCS), but they just got one anyway.
As reported by the Washington Free Beacon, a USDA Office of the Inspector General (OIG) audit recently concluded that the department does not know – and has no way of determining – if its annual beginning farmers initiative totaling nearly $4 billion has had any positive impact whatsoever.
The audit states that the “USDA can neither ensure that the $3.9 billion of beginning farmer assistance in fiscal years 2012 and 2013 has achieved effective and measurable outcomes nor determine if three decades of beginning farmers assistance has resulted in sustainable farming operations,” according to an excerpt pulled by the Free Beacon.
While troubling, the report’s findings are not entirely surprising given the government’s history of bungling its management of agricultural lending programs. For instance, the FCS has in the past year alone used publicly-backed funds to lend more than $1.5 billion to major telecom corporations, not to mention support a $750 million revolving line of credit for Cracker Barrel restaurant chain.
To be sure, the FCS is not directly linked to the USDA nor is it subject to the OIG. Instead, the FCS answers – quite infrequently, evidently – to the Farm Credit Administration, a captured regulator that has allowed the FCS to underwrite loans valued at hundreds of millions of dollars for the likes of Verizon.
So while the USDA OIG audit report is indeed troubling, it is merely a smoking gun toward what could turn up at the FCS should proper oversight be finally exercised. Given the 15 percent decline in FCS loans to small farmers over the past ten years, there has never been a better time or reason to act.