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CROP INSURANCE TURNING INTO "AG COMMODITY INSURANCE" REPORT OHIO STATE, U OF ILLINOIS AG ECONOMISTS
Jan. 25, 2024
Agri-Pulse reports:
Federal crop insurance is rapidly turning into "commodity insurance." So say a group of economists who cite the soaring growth in policies that cover dairy and livestock as well as forage and rangeland.
Insured liabilities for animals and animal products now amount to 11% of cash receipts from that sector, up from virtually no coverage in 2018. Meanwhile, insurance for crops now accounts for 69% of cash receipts, according to the report by the economists at The Ohio State University and the University of Illinois.
To read that report click here.
Overall, the ratio of insured liability to cash receipts for crops and animals and animal products has gone from 30% in 2018 to 41% in 2023.
Insurance coverage under Rain Index policies that protect forage and rangeland more than doubled from $3 billion in 2018 to $8 billion in 2023.
Similarly, purchasing of buy-up area coverage for crops also has increased significantly. Such buy-up coverage options such as STAX for cotton and the Supplemental Coverage Option for other crops accounted for 11% of the insured liability on cotton last year and 5% on corn.
Take note: Lawmakers are looking at increasing premium subsidies for those policies as part of the next farm bill, arguing that it will reduce demand for ad hoc disaster assistance.
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