Crop insurance coverage spared 21,000 jobs in drought-plagued 2012
A new Farm Credit Services of America reported the employment savings across four U.S. states.
Farm Credit Services of America recently published a report about the difference crop insurance coverage made in the United States during 2012. That year, despite the worst droughts experienced in 2 decades, the insurance policies saved almost 21,000 jobs across four states.
The 20-page report provides a breakdown offering insight regarding the crop insurance program history.
The crop insurance coverage analysis dates back to the program’s beginning in the 1930s. It started with the Great Depression and the Dust Bowl. It also underscored significant times such as the expansions to the crop insurance program made in the 1980s and the 1990s. The federal government found itself strapped to pay one unbudgeted disaster relief expense after the next and broadened the program to address that.
The report indicated that when crop insurance is the topic, farmers have a considerable amount of “skin in the game.” Moreover, the greater the participation in the national farm insurance program (NFIP) the lower the risk exposure for the taxpayers.
The 2012 drought in particular underscored the difference the crop insurance coverage overall.
The report pointed to that drought as a demonstration of the way crop insurance was important to the country. It explained the importance of the coverage to the food, fuel supplies, and clothing security of the United States. That year, the drought was devastating to corn, hay and soybean fields. It was meant to be a solid planting year.
That said, the situation only became increasingly worse throughout the year as the drought not only didn’t ease, but it worsened. That year, in the four states considered by the report, corn production plummeted by over 29 percent. Soybean farmers saw a 6 percent drop. That year’s low yields only intensified the already existing problem when the year started with stocks quite low as well as tight supplies on both an American and worldwide scale.
Across Iowa, Nebraska, South Dakota and Wyoming, 20,900 jobs – with an annual $721.2 million in labor income – were saved by the crop insurance coverage, according to the Credit Services of America report.