Audit: Cotton Subsidy Recipients Spend Funds on Luxury Items

Thursday, 07 Aug 2014 06:05 PM

By Andrea Billups

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A U.S. Department of Agriculture Inspector General's report has uncovered wrongful spending of subsidies sent to the cotton industry with money used for purchases of luxury items like vehicles, artwork — even elephant lamps, The Washington Free Beacon reported.

The audit released Thursday exposed lack of oversight of the government's Economic Adjustment Assistance to Users of Upland Cotton Program (EAAP). The program, approved under the 2008 Farm Bill legislation, pays textile mills about 3 cents in subsidies per pound of cotton produced, funds that are supposed to be used for improvements.

Instead, the USDA's OIG found subsidy recipients spent more than $2.4 million of federal money — meant to be used on equipment, new property, and investment in cotton farming — on what the audit called "questionable purchases."

One subsidy recipient, the Free Beacon noted, bought two Ford Explorer SUVs with taxpayer money at a cost of $45,000. The recipient kept one of the vehicles for 11 months and then turned it in to the dealer for a brand new vehicle with one day left before the government-mandated deadline to spend the subsidies or return them to the Farm Service agency, according to the Free Beacon report.

"Altogether, we questioned 75 expenditures, totaling over $2.4 million," the audit noted. "This occurred because FSA has not implemented effective internal controls to determine which capital expenditures are eligible uses of EAAP funds."

About 36 percent of all U.S. cotton farmers receive subsidies, according to OrganicConsumers.org. The United States ranks No. 2 worldwide in cotton production and is the world's largest exporter of the fiber, supplying about 50 percent of cotton used worldwide.


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