By Scout Nelson
Over the past two decades, South Dakota farmers have received nearly $10 billion in Federal Crop Insurance Corp payouts, largely due to weather disasters. This trend places South Dakota among the top states for insurance claims due to climate change-related crop losses, with over $8.3 billion claimed for weather-related losses, including excess moisture, drought, hail, wind, or freezing temperatures.
Crop insurance is important for farmers, offering settlements for damaged or destroyed crops or when planting is impossible. American taxpayers fund a large part of these payouts, with nearly 65% of the program's premiums subsidized by federal funding. The Congressional Budget Office estimates the crop insurance program will cost $16.3 billion in fiscal year 2023, even as U.S. farm incomes reach record highs.
There's a growing call for reforms in the USDA's crop insurance program to reduce taxpayer support, increase transparency, and push for more climate-resilient farming practices. The 2023 Farm Bill, currently under U.S. Congress consideration, includes the renewal of this program.
Anne Schechinger, Midwest director for EWG, emphasizes a strong link between rising crop insurance payouts and climate change. While the USDA oversees the program, private companies sell and manage the policies. A significant portion of the funds, about $33 billion over the past ten years, have gone to insurance companies, not directly benefiting the farmers.
Despite these issues, South Dakota Farm Bureau Federation president Scott VanderWal stresses the program's critical role in sustaining agriculture, especially during extreme weather events like the 2019 floods. Taxpayer subsidization is deemed essential to keep American farming viable and independent of foreign food sources.
Jerry Schmitz, executive director of the South Dakota Soybean Association, points out the broader community impact of crop insurance. It's particularly crucial for young farmers, representing the future of American agriculture, to navigate financial challenges and losses.
Photo Credit: gettyimages-tlillico
Categories: South Dakota, Crops