It was just last week that I discussed the importance of crop insurance to farmers still suffering from the effects of last year’s record drought. And wouldn’t you know it, while I was thumbing through the Houston Chronicle, I found an article which provides a closer look at how the drought affected Texas.
William Pack of the Houston Chronicle reported this past Saturday that crop insurance indemnity payments in Texas have set a record this past year with $2.5 billion in claims paid through March 12, 2012. The article notes that as time went on, yields got worse and worse and at least one livestock expert expects livestock and crop losses to get worse. Pack quotes Travis Miller, an extension service soil and crop sciences specialist, “It’s hard to imagine the damage [the drought] has caused across the state. It’s nothing anybody alive has seen before.”
The USDA crop production summary for 2011 showed that only 57% of the 21.2 million acres of crops planted in Texas were harvested. In comparison, almost 87% of the plant acreage was harvested in 2010.
Officials emphasized the importance of crop insurance as a buffer to help farmers through losses from droughts, floods and other natural disasters. As mentioned last week, a government subsidy keeps rates low for farmers, but it’s up to the farmers to ultimately decide the amount of coverage they want. Mark Lamon, who grows wheat, corn and sunflowers in Medina County, Texas said “[crop insurance] does provide an effective safety net.”
To put things a little more in perspective, Texas’ $2.5 billion in indemnity payments from 2011 is tops in the country, beating second-place North Dakota by about $1 billion. Pack states that this is also Texas’ highest total since 1989, the year record-keeping began.
To all the farmers out there in need of assistance with their drought-related insurance claims, my advice is this: Don’t wait too long before consulting a professional who is well-versed in insurance matters. Otherwise, you might find yourself struggling to recover for the losses you suffered last year.