Farmers shouldered nearly $17 billion in losses during 2012 season
OVERLAND PARK, KAN. (NCIS) – Before farmers received a single dime in crop insurance indemnity payments, they shouldered $12.7 billion in losses as part of their deductibles to crop insurance policies, Tom Zacharias, president of National Crop Insurance Services.
“When combined with the $4.1 billion farmers paid out of their own pockets to purchase crop insurance last year, total farmer investment neared $17 billion,” said Zacharias
According to Zacharias, when assessing the value of crop insurance, there are three undisputed facts of what transpired after the worst drought our country has seen in decades:
1. Indemnities to farmers cost about $17 billion, but, Zacharias said, “thanks to crop insurance’s design, these indemnities were not completely borne by taxpayers because farmers and insurers picked up a major portion of the costs and sustained significant economic losses.”
2. “This was the sixth time since 1983 that crop insurers lost money. Compare that to the property and casualty insurance industry, which has lost money only once as far back as data is available.”
“It is also important to note,” Zacharias said, “that when crop insurance premiums exceed losses, the government sees underwriting gains that help offset payments in bad years.
“In fact, the government experienced nearly $4 billion in gains from 2001-2010.
Congress was not asked to fund an ad hoc disaster bill despite the historic devastation endured by our agricultural producers.”
Zacharias welcomed reasoned debate on farm policies, but added that “lawmakers and the American public deserve an intelligent conversation about the future of agriculture that is kept to just the facts.”