With claims still streaming in — only an estimated 81 percent of expected claims have been finalized — crop insurance companies have already paid out a record $9.1 billion in indemnity payments to America’s farmers in 2011. This has already surpassed the former record of $8.67 billion in indemnities paid in 2008, according to USDA’s Risk Management Agency (RMA).
“Working as designed since 2008, more than $27 billion in private-backed crop insurance payouts over the past four years have helped farmers pick up the pieces after natural disasters or market drops,” said Keith Collins, former USDA Chief Economist. “Without crop insurance in place, those billions in damages would have fallen onto the laps of lenders, input suppliers, marketers, land owners and farm families, just as the economy was spiraling downward and unemployment was soaring,” he said.
Collins noted that despite the fact that the two largest indemnity payments in the history of crop insurance have taken place in the last four years, Congress has reduced the federal investment in the crop insurance by more than $12 billion during the same time frame. “We’re doing more with fewer resources while our exposure continues to rise as crop values stand at historically high levels,” Collins said.
Agriculture, by definition, is the science, art, or practice of cultivating the soil, producing crops, and raising livestock.
Agriculture is a unique industry in so many ways. One particular way—it is perhaps the only area of the federal budget to have shrunk in the past 10 years, yielding cuts even as it was coming in under budget.
