$7.1 B and Counting: Indemnities Soar In 2011
.jpg?i=121511094935) Crop insurance companies have paid out more than $7.1 billion and climbing in claims so far this year, which makes 2011 second only to 2008’s $8.6 billion in the total value of indemnities paid out to farmers. The combination of several large-scale floods in the Central U.S., record droughts in the southern plains, a strong tropical storm in the Northeast and a hard freeze in Florida set the stage for the widespread agricultural losses.
But what is the significance of this? The fact is that despite being one of the worst weather years in recent history, farmers had a policy backstop in place—crop insurance—to preclude major losses from natural disasters or market fluctuations that could lead to widespread bankruptcies and foreclosures.
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Kansas Farmer: One Size Doesn’t Fit All When it Comes to Risk Management
 When it comes to risk management, one size does not fit all, said Kansas farmer Jay Armstrong during a recent radio interview with the National Association of Farm Broadcasters that ran nationally in early December. Armstrong noted that his 2,700-acre family farm is split between upland and bottomland. In years of drought, the upland withers while the bottomland blossoms. In years of wet weather, it’s the opposite.
“So no matter what extreme Mother Nature throws at me I will suffer losses,” he said, adding “my story is the story of many thousands of farmers across this country, who grow our nation’s food, feed, and fuel supply while dealing with Mother Nature’s tantrums, year in and year out.”
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Keeping Crop Insurance Strong
This ongoing series presents one of the many strengths of crop insurance per month and details how the sum of the 12 essential crop insurance strengths has given us the successful program we have today. These strengths are especially important as policy makers contemplate further cuts to farm safety net policies.
Strength: Producers do not receive unnecessarily excessive payments.
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