Iowa corn, soybean losses from drought top $1 billion
Federally-subsidized crop insurance covered the losses
Last summer and fall's drought and heat wave caused losses in excess of $1 billion for Iowa's corn and soybean farmers, according to figures reported Wednesday by the U.S. Department of Agriculture's Risk Management Agency.
Federally-subsidized crop insurance, administered by the USDA Risk Management Agency, covered the losses. The federal government subsidizes about 57 percent of the insurance premiums for Iowa corn and soybean crops.
Congress on Tuesday extended the subsidies through September as part of the extension of the 2008 Farm Bill, which prevented a spike in milk and dairy prices. The Washington, D.C.-based Environmental Working Group has campaigned to end federal subsidies for crop insurance, contending they are unnecessary and contribute to what it calls "corporate welfare."
Iowa farmers were paid $933.6 million in loss claims for corn, or 157 percent of the $627 million in premiums paid through Dec. 31. The federal government subsidized $362 million of the premiums for corn coverage.
Iowa claims for soybean losses totaled $158.9 million, or 62 percent of the $257 million paid in insurance premiums. The federal government subsidized $147.1 million of the soybean insurance premiums.
Nationally, corn farmers received payments totaling $6.1 billion, or 143 percent of the $4.3 billion in premiums that were paid. The federal crop insurance premium subsidy totaled $2.7 billion.
Soybean farmers were paid $1.3 billion for crop losses, less than the $2.3 billion in premiums, of which $1.46 billion was federally-subsidized.
The figures represent claims for corn and soybean losses that were submitted by Dec. 31.
The total loss for the drought and extreme heat that stretched across more than half the country, from California north to Idaho and the Dakotas and east to Indiana and Illinois, is projected at $35 billion primarily due to crop failure.By comparison, the USDA said crop losses from Hurricane Sandy over the northeastern Atlantic coast and inland are estimated at $62 billion. The Derecho event of high winds and severe storms in a swath from Illinois to a mid-Atlantic zone stretching from New Jersey to South Carolina is estimated to produce at least $3.75 billion in losses.