Piece Description

Global warming? More like global weirding.

Historic floods and drought conditions are happening at the same time, setting this up to be a rough year for farmers.

If that doesn’t grab your attention, consider this: If you pay federal taxes, then you subsidize the crop insurance industry.

As Harvest Public Media’s Tim Lloyd reports, all this crazy weather could make that an expensive proposition.

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If that doesn’t grab your attention, consider this: If you pay federal taxes, then you subsidize the crop insurance industry.
As Harvest Public Media’s Tim Lloyd reports, all this crazy weather could make that an expensive proposition.

Federal crop insurance was created after the Dust Bowl.
(fade up sound of old news reel from Dust Bowl describing storms and locations)
At the time the fear was environmental calamity could wipe out parts of American agriculture.
And even today taxpayers subsidize around 60-percent of farmers crop insurance premiums.
Now, extreme weather brought on by climate change could up the ante.
“You know, the unknown presents risk. Because, insurance, what you’re doing is that you’re looking at the past and you’re trying to use that to predict your future. ”
Bill Murphy oversees the Risk Management Agency, a subset of the USDA that regulates the public/private crop insurance industry.
“As things change it becomes trickier. The way you address that, for the unknown, is that you build in some additional rate to make sure; you know that you’re in the ball bark for future occurrences. “
So, here’s the domino effect: Climate change means more risk, more risk means higher premiums, and higher premiums mean more tax dollars.
And Murphy says a hazy picture of what’s to come doesn’t make his job any easier.
Most models for how climate change will affect insurance focus on the coasts.
That’s a problem because most crop policies are held in the Midwest.
“A property and casualty company can sit down with a city like San Francisco and go building by building and tell you what you’re risk is. Well, we’re a lot trickier than that because we insure drought, excessive flooding, insects, disease; a whole number of things. So, it makes modeling our program extremely difficult.”
And record commodity prices are making what’s being insured really valuable.
The total value of crops covered last topped out at $78 billion.
This year the USDA thinks that number will be around $100 billion.
That much money means there's that much more too loose, and has record numbers of farmers are enrolling in crop insurance.
Many producers point to years like this, with flooding along the Mississippi, drought conditions to the west and the Missouri River threating to burst at the seams, as reason for federal involvement.
Just ask Richard Oswald.
(Fade up tractor)
In 1993 his fields were underwater.
“What a lot of farmers confront, farmers I know who’ve quit farming, if we have two years in a row like that everything you’ve worked your whole life for can be gone.”
Oswald’s tractor idles as he stands at the edge of Missouri farmland running five generations deep.
He says a lot of farmers today have to focus on one or two crops.
Couple that with rising input costs for everything from seed to fuel and a bad year can be devastating.
“Thirty, forty years ago farmers were feeding their own livestock and row crop was just a part of the entire operation. So, we don’t have that diversity to fall back on. We don’t have better hog prices when corn prices get high, like we used to have, hogs to sell at better price or cattle to sell at a better price. We’re reliant simple on those row crops. And even if the price is good, if we didn’t grow any, why we can’t participate in that good market.”
Even without projections for more extreme weather, the Congressional Budget Office expects crop insurance to cost the federal government a whopping $77 billion over the next 10 years.
That's almost twice what it was over the previous decade.
Pat Westoff is a program director with the Food and Agricultural Policy Research Institute
“Just having more normal weather is probably going to result in having more cost in that program. And if we had some really extreme weather events it could cause a big spike in cost there sometime soon.”
As for this year, it’s still too soon for predications.
Good weather for the remainder of the growing season could make up for a rough start.
But uncertainty, like the bulging Missouri River, looms on the horizon.
Tim Lloyd, Harvest Public Media