Farm Diversification

Turns out there is a way to make money farming, after all;

According to Gretchen Shappert, U.S. attorney for the western district of North Carolina, “the Warren Farms investigation is literally the mother of all crop fraud investigations. It was a result of a perfect storm of individuals who were involved in fraud.”

Robert and Vicki Warren are among eight people who pleaded guilty to swindling the government and insurance companies out of more than $9 million in bogus insurance claims from 1997 to 2003. The Warrens were among the largest tomato growers east of the Mississippi; at one point they owned 26 farms in three states, including one run by Bobby Chambers.

“We grow different kinds of produce, tomatoes, green beans, cucumbers, just a little of everything,” says Chambers, a beefy, baby-faced, 42-year-old lifelong farmer who runs a spread that borders the Nolichucky River in Cocke County, Tennessee.

According to trial records, he helped the Warrens stage a hailstorm to make it look like their tomatoes had been destroyed, so they could collect the insurance money.

Chambers says he bought a bag of cocktail ice and a disposable camera, and, on his boss’s order, created a foul-weather tableau. “The way we did it, we was down taking pictures, out this row, and then we just stood behind it and throwed the ice over the top. To me, it looked like a hailstorm,” says Chambers.

To complete the scene of devastation, they then picked up wooden tomato stakes and attacked the unsuspecting vegetables. “They had one Mexican who did all the beating, he beat every 16,000 of them. He’d just go through there and knock the leaves off of them,” says Chambers, as he illustrates the activity with a long stick. “It made it look like where the hail had beat it up.”

It gets better. Not only does the US Treasury back insurers in the risky business, the USDA subsidizes premiums.

The government is so generous with crop insurance that it subsidizes farmers’ premiums. Edwards says the USDA paid the Warrens more than $2 million to help them insure their tomatoes. He compares it to the following hypothetical situation: “Every year a bank gets robbed and they notice the bank robber is using an old getaway car and they ask, ‘Would you like a car loan to have a nicer getaway car next year when you come to rob us?’ Because the government is subsidizing the farmer’s ability to defraud us for the coming season.”

Good ol’ farm ingenuity!

FILED UNDER: Economics and Business, General,
Kate McMillan
About Kate McMillan
Kate McMillan is the proprietor of small dead animals, which has won numerous awards including Best Conservative Blog and Best Canadian Blog. She contributed nearly 300 pieces to OTB between November 2004 and June 2007. Follow her on Twitter @katewerk.

Comments

  1. Zeuswood says:

    If they want to diversify, they should just follow the Dukakis plan and add Belgian endive to their crop rotation.

  2. Dave Schuler says:

    Rent-seeking is a major cash crop.

  3. mike says:

    Canadian Wheat Board, with fixed priced guarentees to prarie farmers, sole source purchasing, preventing transport to any others, …

    Ah, but that doesn’t count as criminal, because the Canadian Government sponsors it, right?

  4. Les Jones says:

    Crop Insurance Fraud in Cocke County, TN

    The Warren family staged photos to show hail, then had a worker thrash their 16,000 tomato plants to simulate hail damage. From an NPR report via Outside the Beltway. The government is so generous with crop insurance that it subsidizes farmers’ premiu…

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