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Crop insurance payouts top $9 billion
If crop insurance indemnity payments are an accurate picture of the value of crop losses, 2011 was a record year.
Those payments added up to more than $9 billion for the first time in history last year, and that figure's expected to continue to climb as more 2011 crop losses are discovered as farmers get into the field this spring. Drought in the Plains and parts of the Midwest, flooding along the Mississippi and Missouri rivers and untimely freezes in the southeast all triggered about $9.1 billion in crop insurance indemnity payments, beating the previous record of $8.67 billion set in 2008, when flooding ravaged much of the Corn Belt. And, the 2011 number, according to a report from National Crop Insurance Services (NCIS) shows that number could eclipse $10 billion once all claims are settled despite slipping funding for federal crop insurance, says NCIS president Tom Zacharias.
"Two out of the last 4 years have seen the largest indemnity payments in history, all while the crop insurance industry was asked to do more with less," Zacharias says. "The industry has become leaner and more efficient as it continues to serve the risk management needs of U.S. farmers."
Despite that improved efficiency, federal crop insurance funding could see further declines in the near future, making it imperative that the 2012 farm bill allocate ample funds so farmers are protected in the event of future needs.
"Faced with decreasing federal funding, record payouts and high crop values, it is imperative that Congress not weaken the crop insurance infrastructure further as it writes the 2012 farm bill," Zacharias says.