Record Crop Insurance Indemnity Payments in 2008
FOR IMMEDIATE RELEASE
July 20, 2009
OVERLAND PARK, KAN…The results are all but final…a record $8.6 billion in crop insurance indemnity payments were made to U.S. farmers for losses in 2008 because of droughts and flooding in parts of the country along with substantial price declines for some of the majority commodities.
“This was one very busy year for the industry,” said Bob Parkerson, president of National Crop Insurance Services (NCIS), the nonprofit industry trade association in Kansas City. “Most of the claims came in late in the year because of the drop in commodity prices, but the private companies worked hard to process and pay many of them within just weeks after the loss was filed.”
The good news for taxpayers is that the lion’s share of those payments comes from the private insurance companies that sell and service the Federal crop insurance program.
“Crop insurance is key to keeping farmers financially stable during difficult times,” said Parkerson. “And the private companies will be there to offer that protection in the good and bad weather years.”
There were several states whose farmers were paid significant indemnities, helping to support the rural communities in which they live. Among those were: Illinois ($569 million); Indiana ($524 million); Iowa ($1.1 billion); Kansas ($411 million); Minnesota ($691 million); Nebraska ($414 million); North Dakota ($842 million); Ohio ($522 million); South Dakota ($400 million); and, Texas ($766 million).
“This is one of those years that demonstrates just how well the public/private partnership between USDA and the crop insurance industry works,” said Parkerson.
The “partnership” was legislated in 1980 when relatively few farmers used crop insurance to manage their risks. More than 272 million acres, about 80 percent of the insurable acreage, were protected by crop insurance in 2008.