With farm policy supporting a big chunk of the rural economy, it’s very popular among farm-state politicians. U.S. Sen. Roger Marshall, a Republican from Kansas, calls crop insurance his top priority as the program comes up for renewal this year within the farm bill.
“It provides a rapid response when disaster strikes and ensures farmers can weather the storm and plant next year’s crop,” Marshall said in a statement.
But others see a program that’s growing unwieldy. Last year crop insurance companies paid out more than$19 billion to cover losses, most of it caused by drought. That’s a record, and it’s driven by climate change.
In 2012, the last major drought year, roughly half of more than $17 billion in indemnity payments could be directly tied to climate change, according to Noah Diffenbaugh, a climate scientist at Stanford University, In a more typical year, he said, about 20% of the crop insurance payouts are tied to climate change. But moving forward it’s increasingly hard to call any year “normal.”
“The probability of extreme events, as extreme as we’ve experienced historically, and more extreme than we’ve experienced, those are changing,” Diffenbaugh said.
Yet crop insurance is not adapting to wild swings in the weather and intensifying natural disasters.
Anne Schechinger, a senior analyst at the Environmental Working Group, says that heavily subsidized crop insurance encourages risk-taking.
“Because right now, high-risk land is subsidized at the same rate as regular, perfectly productive farmland,” she said. “So, you’re encouraging farmers to plant in these high-risk areas like floodplains that are going to result in more loss over time.”
Free market insurance companies, ones backed by investors and not taxpayers, aren’t willing to play those odds. A lot of them are pulling out of disaster-prone regions, even entire states. Getting homeowners insurance near a forest in California, for instance, is nearly impossible.
Meanwhile, subsidized crop insurance covers the crops no matter where they’re planted.
“So, it is totally opposite from what most insurance industries are doing right now with climate change,” said Schechinger. “Because the federal government is still choosing to fund the crop insurance program, even though there are huge losses, because of climate change, and taxpayers are still left to subsidize these losses.”
Schechinger said Congress should tailor crop insurance to reward greener farm practices — encourage farmers to retire marginal land, for instance, or use less fertilizer.
But federally subsidized insurance is bedrock farm policy, and many farm-state legislators want to use the current farm bill to keep crop insurance growing.
This story was produced in partnership with Harvest Public Media, a collaboration of public media newsrooms in the Midwest. It reports on food systems, agriculture and rural issues.