Record crop insurance indemnity payments in 2008

A record $8.6bn in crop insurance indemnity payments were made to US farmers for losses in 2008 because of droughts and flooding in parts of the country along with substantial price declines for some of the major commodities. Most of the claims came in late in the year because of the drop in commodity prices, according to Bob Parkerson, president of National Crop Insurance Services (NCIS), a non-profit industry trade association based in Kansas City. “The lion’s share of those payments comes from the private insurance companies that sell and service the Federal crop insurance program”, Mr Parkerson noted. NCIS figures show that the state of Iowa received the highest indemnity payout at $1.1bn, followed by North Dakota and Texas with payments of $842mn and $766mn, respectively. More than 272 million acres of land, about 80% of the insurable acreage in the US, were protected by crop insurance policies last year.