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Extreme weather could prove costly for taxpayers
Thousands of acres of farmland in Mississippi County, Mo., rest underwater as a result of historic flooding this spring.
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Jeremy Hobson: Well another round of tornadoes swept through some midwestern states last night, injuring dozens of people and damaging property. This is shaping up to be a record year for tornadoes in the U.S. But lest we forget, there are some major, though less dramatic, natural disasters going on right now as well. Historic floods and droughts are causing big headaches for farmers.
And as Harvest Public Media's Tim Lloyd reports, they're likely to boost the cost of crop insurance.
Tim Lloyd: Federal crop insurance was created after the Dust Bowl. The fear then was Mother Nature could wipe out parts of American agriculture. And even today, taxpayers subsidize around 60 percent of farmers' crop insurance premiums. Now, extreme weather brought on by climate change could up the ante.
Bill Murphy: You know, the unknown presents risk. Because, insurance, what you're doing is that you're looking at the past and you're trying to use that to predict your future.
Bill Murphy oversees the Risk Management Agency, a subset of the USDA that regulates the crop insurance industry. Farmers now rely on that insurance to ride out tough years. And banks that lend to farmers rely on it, too, as way to protect themselves from a bad crop season.
Scott Gerlt is a crop analyst at the University of Missouri.
Scott Gerlt: If there's more risk in the marketplace, we would expect to see premiums go up, which would increase the government subsidies.
So, here's the domino effect: Climate change means more risk. More risk means higher premiums. And higher premiums mean more tax dollars. Then there's the unknown. There are models that forecast how climate change will affect insurance, but most focus on America's populated coasts.
That's a problem because most crop policies are held in the Midwest. And the price for crops like soybeans, corn and cotton have never been higher. And that much money means there's that much more too loose.
Just ask Richard Oswald. Oswald's tractor idles as he stands at the edge of his Missouri farmland that runs five generations deep. In 1993, his fields were underwater.
Richard Oswald: What a lot of farmers confront -- farmers I've known who've quit farming -- if we have two years in a row like that, everything you've worked our whole lives for can be gone.
And that vulnerability has record numbers of farmers signing up for crop insurance. Even without projections for more extreme weather, the Congressional Budget Office expects crop insurance to cost the federal government a whopping $77 billion over the next 10 years. That's almost twice what it was over the previous decade.
In Kansas City, I'm Tim Lloyd for Marketplace.
Off base on the primary reason for cost increase. It's not climate change. Depression to the late eighties - crop insurance covered hail damage for corn and soybean crops. In the last decade, this farmer can now insure a varying level of yeild based on my individual fields, whole farm, or county yield averages. I can also add to the mix a percentage of income based on spring or fall prices. Insurance tables don't have enough history for the newer options. Increasing commodity prices are increasing costs of claims and prices are affected by more than climate change.
This report is indeed a classic example of yellow journalism. Tim Lloyd either did not do his homework or chose to ignore the extensive data showing the positive impact of a warming climate and increasing atmospheric CO2 concentration on crop productivity, water use efficiency, and the ability of plants to more efficiently extract soil nutrients (for an extensive reference source, see CO2 Science at http://www.co2science.org/).
Tim Lloyd's statement, "....extreme weather brought on by climate change....", is not supported by the data, which do not support any historic increase in extremes. And the climate is always changing, cooling during the little ice age, a gradual warming since then, a strong correlation with solar activity, etc. Lloyd's tone implies "climate change" to equate to "warming" and this warming leads to extreme weather, but again the empirical data show no excursions outside of natural variation.
Scott Gerlt's statement that "Climate change means more risk" [presumably regarding crops, as this is his stated specialty] is also without foundation if Gerlt equates "climate change" with the ~0.7 OC rise and the increase in atmospheric CO2 in temperature over the last century. Indeed, crop productivity, especially that of C3 plants, has risen sharply over the last several decades, with the data strongly suggesting a positive correlation with CO2 fertilization. Further, the National Climate Data Center shows no upward trend in droughts, and no significant trend in wet weather from 1900 through 2009.
This report falls way below expectations of balanced reporting.
Poor journalism. At least 3 references to climate change, as if it's a proven fact. No one interviewed for the article mentioned climate change. Recent Mississippi flooding is very similar in magnitude to 1927 levels. Was climate change responsible for that disaster?
Just more socialist propaganda from our friends at NPR.
Instead of taxing Americans' income, why not tax the pollution causing the problem?
If $1 of a national carbon tax was reserved for crop insurance it would raise $60 billion over the next 10 years. And it would help reduce the climate-driven weather extremes.
Americans are going to be paying a lot more for climate damages. It only makes sense to make the carbon pollution pay for the costs and let the marketplace work on the solution at the same time. Either that or raise other taxes that are unconnected to the problem.
