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Crop insurance payout nears $11 billion
A few months ago, questions circled closer to the $9 billion mark.
But now, some are speculating the crop indemnity payments for the last crop year could soar beyond the $11 billion mark, according to a crop insurance industry group.
A report released Wednesday by National Crop Insurance Services (NCIS) shows the number of payments going out to insurance-covered farmers from weather-related crop losses is sitting around $10.7 billion right now, and that number's not topped out yet, an NCIS report shows. Even though it's still climbing, that number's already 25% higher than the previous record of $8.76 billion set in the flood year of 2008.
"Spurred on by one of the worst weather years in history, farmers and ranchers faced unparalleled challenges in 2011 and crop insurance reached record amounts. The numbers paint a picture of Mother Nature’s devastation that befell farmers from coast to coast," according to NCIS.
Corn, cotton, wheat, soybeans and grain sorghum took the biggest financial hits, in that order, in 2011. Indemnities paid in some major production areas have been higher, but the overall amount paid is still less than the price farmers paid for their coverage.
"While the average loss ratio across the country is at .90 -- which means that for every dollar purchased in coverage, 90 cents was paid out in indemnities -- those numbers are much higher in some key states," according to NCIS.
The growing crop insurance bill has some industry leaders shows the need for more structured federal support for disaster protection on the farm, says NCIS president Tom Zacharias.
"With damages from last year approaching the $11 billion mark, the fact that there has not been a single call from farmers and ranchers for a federal disaster bill is testimony to the efficacy of crop insurance and proof that farmers and rancher consider it indispensable," he says.