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Wednesday, February 05, 2020

Floods made 2019 crop insurance payout highest in history; still-saturated soils in Midwest threaten more this year

"Flood-related federal crop insurance payouts for the 2019 growing season total more than $6.4 billion so far — the costliest on record," Ryan McCrimmon reports for Politico's Morning Agriculture. "Most of those indemnities are tied to the spring and summer floods across states like North and South Dakota, Minnesota, and Illinois, according to an analysis of USDA data by Steve Bowen, a meteorologist and head of catastrophe insight at Aon, an insurance company."

Bowen told Politico, “Given the record rainfall that occurred and the multiple ‘waves’ of flooding that affected areas across the Mississippi, Missouri, and Arkansas River basins, the heightened impacts are not overly surprising. Last year was a very tough year for farmers, and there are concerns that already saturated soils across the Plains and Midwest may set the stage for more possible flooding in 2020.”

Department of Agriculture economists predicted last year that climate change will fuel bigger and more frequent storms, which will increase the price of crop insurance by 4% to 22%. Inside Climate News reported in 2018 that drought, partly driven by climate change, was driving up crop-insurance payouts and accounted for almost half the payouts from 2000 to 2016. Floods were second.

McCrimmon notes that the crop-insurance program "is overseen by USDA and carried out by private companies. Taxpayers cover companies’ costs of administering the program and subsidize, on average, 60 percent of farmers’ premiums; growers pay the other 40 percent."

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