Quantcast
Environmental News for a Healthier Planet and Life

Record-Breaking $17 Billion in Crop Loss Stresses Need for Federal Insurance Program Reform

Food
Record-Breaking $17 Billion in Crop Loss Stresses Need for Federal Insurance Program Reform

Natural Resources Defense Council

By Dana Gunders

Extreme weather means lost food as drought, flood and other weather-related farming hazards threaten and destroy crops. But what are we to do, since we can’t fight weather? Or can we?

As we enter this new frontier of the wild, wild weather, one of the most promising strategies for reducing both the material and financial losses is to build the resilience of our farms. Practices such as cover cropping, no-till and efficient irrigation have shown to reduce crop losses associated with extreme weather. Faced with a future of untold numbers of drastic weather events, we would be silly not to use every tool in our toolbox to promote these types of water-smart, climate-proofing practices.

On Tuesday, Natural Resources Defense Council (NRDC) released a report, Soil Matters: How the Federal Crop Insurance Program should be reformed, outlining a strategy to use one of the most prevalent farming risk management tools, the FCIP, to encourage more resilience on our farms.

Fortunately, farmers who lose crops due to extreme weather are covered through the Federal Crop Insurance Program (FCIP), which reimburses them when those disasters hit. Unfortunately, the bill—a large portion of which is paid by the American public—has been skyrocketing alongside the increased rate of extreme weather events. In 2011, FCIP paid out a record-breaking $10.8 billion in crop insurance claims to farmers, many of whom suffered during the historic Mississippi River basin floods that year. FCIP broke that record in 2012, when indemnities topped an all-time high of $17.3 billion, mostly due to severe drought. Nearly $8.4 billion of those total crop loss payouts were funded directly by taxpayers.

Corn farmers in states that were most impacted by the 2012 drought—Illinois, Iowa, Nebraska and Kansas—received nearly $4 billion in indemnities due to drought loss. However, the average cover cropping corn farmer’s yields did not go below the average yield that would trigger an insurance claim payment in these states. Cover cropped fields yielded an average of 122 bushels of corn per acre in these states, while non-cover cropped fields yielded only 106 bushels of corn per acre on average.

This 15 percent increase in yield for the average cover cropping farmer meant he/she did not hit the crop insurance “deductible,” and therefore most of the money paid out in these states went to corn farmers who did not use cover crops. Effectively, this means we are penalizing farmers who are working to build their resilience, to reduce their losses, to ultimately save both the crops themselves and the payments the American public is paying out.

If farmers planting cover crops don’t experience the same losses, shouldn’t they get a “good driver” credit on their insurance premium? Right now, FCIP premium rates are non-competitively set by the Risk Management Agency, which is part of the U.S. Department of Agriculture. While setting those rates, why not take the opportunity to reward those who are practicing preventative measures (especially when those same measures are saving water, fertilizer and erosion occurrence)? 

Earlier this year, we published a survey on crop losses in fruits and vegetables to examine what was driving the losses. A good portion of the losses were due to economic drivers, such as low prices at the time of harvest. Weather and pests were of course mentioned too, as inherent risks to the businesses that were difficult to ameliorate. Difficult, yes—we all know you can’t change the weather—but what we can do is take steps to defy its effect by setting ourselves up with the healthiest soil, most efficient irrigation and least amount of erosion possible. 

To do this, let’s give farmers who cost the system less the premium breaks they are due.

Visit EcoWatch’s CLIMATE CHANGE and FOOD pages for more related news on this topic.

——–

One of the beavers released into England's Somerset county this January, which has now helped build the area's first dam in more than 400 years. Ben Birchall / PA Images via Getty Images

England's Somerset county can now boast its first beaver dam in more than 400 years.

Read More Show Less

EcoWatch Daily Newsletter

Australia's dingo fences, built to protect livestock from wild dogs, stretch for thousands of miles. Marian Deschain / Wikimedia

By Alex McInturff, Christine Wilkinson and Wenjing Xu

What is the most common form of human infrastructure in the world? It may well be the fence. Recent estimates suggest that the total length of all fencing around the globe is 10 times greater than the total length of roads. If our planet's fences were stretched end to end, they would likely bridge the distance from Earth to the Sun multiple times.

Read More Show Less

Trending

Hopi blue corn is being affected by climate change. Abrahami / Wikimedia Commons / CC by 3.0

Climate change is making ancient Hopi farming nearly impossible, threatening not just the Tribe's staple food source, but a pillar of its culture and religion, the Arizona Republic reports.

Read More Show Less
Pollution on the Ganges River. Kaushik Ghosh / Moment Open / Getty Images

The most polluted river in the world continues to be exploited through fishing practices that threaten endangered wildlife, new research shows.

Read More Show Less
Oil spills, such as the one in Mauritius in August 2020, could soon be among the ecological crimes considered ecocide. - / AFP / Getty Images

By Kenny Stancil

An expert panel of top international and environmental lawyers have begun working this month on a legal definition of "ecocide" with the goal of making mass ecological damage an enforceable international crime on par with war crimes, crimes against humanity, and genocide.

Read More Show Less