Despite Record Losses Crop Insurance Program Remains Strong: March 15 Sales Closing Deadline for Most Spring Crops
OVERLAND PARK, KAN – While 2012 crop insurance indemnity payments have hit a new record high, the taxpayer-funded portion of those losses will be much lower than crop insurance critics warned last summer.
That is good news for the future of the program and good news for farmers who are closing in on the March 15 deadline for signing up for crop insurance on most spring planted crops. March 15 is also the deadline to make any changes to existing policies.
The 2012 indemnities hit $14.7 billion, as of February25, and will climb higher as claims are finalized in the next few weeks.
There will be some government loss in the program for 2012 but it will be mitigated by the $4.1 billion in farmer paid premiums as well as losses absorbed by the participating insurance companies that deliver and service the crop insurance program.
The Congressional Budget Office foresees a sharp decline in indemnities in 2013 and has lowered its projections for total federal outlays for crop insurance by nearly $8 billion over the next 10 years.
All of this contributes to a sense of optimism over the future of the crop insurance program. After all, unlike many previous years of weather disasters, there were no calls for additional ad hoc disaster assistance.
Farmers will use their indemnities to recover from their loss and then plan for this year’s crop and that plan will no doubt include a careful review of their crop insurance options before the March 15 deadline.