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Policy Digest
March 1997
USDA Misleads, Shafts Farmers	Suppose the federal government, pursuing its own social goals, came to you and made you an offer which seemed reasonable but required you to make an investment. You signed up. But six years later, the government is back again, reneging on the whole deal and presenting you with a bill for $30,000. That is what happened to a farmer in Hart, Michigan, and to about 1,100 other farm families throughout the nation. The U. S. Department of Agriculture offered the farmer, Fred Tubbs, a $78,000 loan at 1 percent interest to build six housing units for migrant workers on his farm -- explaining in writing that he could not charge them rent, but could bill them for utilities -- and he agreed in 1987. In 1993, the USDA told him he could no longer bill for utilities and had to return to the migrants the $30,000 in utility bills he had collected in the past -- an amount sufficient to bankrupt his farm. The bill for all farmers unfortunate enough to believe the government and sign on to the program could run to $22 million. The USDA is taking this action because it was successfully sued by the Migrant Legal Association on the grounds that utilities were actually "rent." As a final insult, because of the difficulty in tracing former migrant workers, the USDA is claiming the money for itself. According to Rep. Pete Hoekstra (R-Mich), "Even though they called the agency and got bad advice from their government that (wrote) the regulations, they're still responsible? That's quite a reach." Source: Adrienne Fox, "I'm With the U. S. Government...," Investor's Business Daily, March 21, 1997.