Crop Insurance Payments Skyrocket

Insurance payments to U.S. farmers for crops lost to droughts and flooding have risen more than threefold over the past 25 years, according to an analysis of federal data by the Environmental Working Group (EWG).

The report reinforces concerns that insuring the nation’s crops will get more expensive for insurers, farmers and taxpayers as climate change drives erratic weather and disrupts agriculture.

The federal government pays about 60 percent of the nation’s crop insurance premiums through taxpayer subsidies, according to the Congressional Budget Office, and those premiums tend to rise as insurance payouts grow.

Insurance payments to farmers due to drought rose more than 400 percent between 1995 and 2020, while payments due to excess moisture—like floods—rose nearly 300 percent, according to the nonprofit environmental group, which examined publicly available data from the USDA, which Reuters reviewed.

During the period analyzed by EWG, the number of insured acres grew just 84.5 percent.

The cost of insuring crops could increase between 3.5 percent and 22 percent by 2080 due to climate change, even if farmers adapt what and where they plant, according to a 2019 USDA report.

Source: Reuters