Floods, Heat Waves Costing the Government Billions in Crop Insurance Claims

| by Sarah Fruchtnicht
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Extreme weather is costing the federal government billions of dollars through the Federal Crop Insurance Program (FCIP), according to a report from the Natural Resources Defense Council.

In 2012, a drought cost $17.3 billion in crop damage. In 2011, floods claimed $10.8 billion in crops. The program is meant to protect farmers from catastrophic weather conditions that devastate crops.

About 70 percent of U.S. crops are covered under FCIP. Crop insurance premiums do not take into account whether famer’s use regenerative farming pracitices, like conservation tillage, cover cropping and improved irrigation scheduling. These practices provide short-term protection against environmental risks.

Instead, the NRDC says, FCIP policies lead farmers to utilize risky farming methods that make the land less viable, resulting in “brittle, loss-prone fields.”

“Healthy soil is the best insurance policy,” said Gabe Brown, a farmer from Burleigh County in central North Dakota.

According to Brown, since he began no-till cultivation, cover crops and a diversified crop rotation on his farm, the soil contain more organic matter and thus has a higher water storage capacity.

“Corn can drop to $2 a bushel and I’m still going to make money," Brown said. "There’s not many producers across the country that can say that. But the only reason I’m able to do that is that I’m focused on regenerating the soil resource.”

The report said FCIP should incentivize climate-smart farming methods.

“It would provide incentives for farmers to go above and beyond baseline conservation practices,” said Claire O’Connor, an agriculture policy analyst with the NRDC.

O’Connor said the group is ready to take their plan to the Risk Management Agency, which administers federal crop insurance.

“That’s the next step," O'Connor said. "We’re hoping to have one of the crop insurance companies partner with us on a pilot basis and then expand it as part of the official crop insurance program.”

According to ThinkProgress, 80 percent of FCIP claims in 2012 were because of high wind, heat or drought.

The NRDC claims that if we begin preparing farmers for the effects of climate change, we can curb that amount considerably. States hit hardest were Iowa, Illinois and Indiana.

President Barack Obama announced in August 2012 that the federal government would buy $170 million in pork, lamb, chicken and catfish to help farmers who took big losses during the drought and were in desperate need of immediate cash.

Sources: NRDC, ThinkProgress, The Gazette