With 62 percent of the lower 48 states experiencing moderate to exceptional drought, crop insurance is playing an increasingly important role for U.S. farmers. So far in 2012, farmers have invested $3.9 billion to purchase more than 1.1 million crop insurance policies, according to National Crop Insurance Services (NCIS).
Crop insurance policies issued in 2012 provide $110 billion in liability protection. About 15,000 private crop insurance agents and 5,000 loss adjusters are already helping farmers with claims for 2012 losses, according to NCIS. So far this year, the crop insurance industry has already paid out nearly $1 billion in indemnity checks.
Whether a farm bill is passed this fall, or even next year, crop insurance will be there for farmers today and tomorrow, just as it was when flooding and drought ruined a significant portion of 2011 crops.
Leo Ettleman, an Iowa farmer who lost nearly everything last year to the flood waters of the Missouri, was back on his feet again this year planting his fields and hoping for better luck. “The house, the barn, all the buildings, all the fields, everything was swallowed by the great Missouri,” Ettleman said recalling last year.
Ettleman says that through it all, having crop insurance gave him “great peace of mind” knowing that when the waters receded, he, his father and his son could return to farming. The Ettlemans are likely again drawing some comfort from the fact that they always purchase crop insurance to hedge the unpredictability of weather.
Today’s crop insurance system was specifically designed to provide assistance to farmers when they need it the most. In addition, according to NCIS, crop insurance has lessened taxpayers’ exposure to agricultural risk and reduced spending on the farm safety net by 36 percent since 2002.