Insurance averts main street meltdown
Posted: 3/12/2013 |
Crop insurance not only deflected a financial disaster on grain farms after last summer's epic drought, it warded off a meltdown for Main Street businesses as well, a new study by University of Nebraska-Lincoln economists Eric Thompson and Brad Lubben found.
Farmers in the four states studied -- Iowa, Nebraska, South Dakota and Wyoming -- had collected a record $4.5 billion in 2012 insurance claims through March 4. Those payments not only helped growers cover losses and afford to plant another crop in 2013, but preserved more than 20,000 jobs in ag-related businesses, the economists concluded.
The study, financed by Omaha-based Farm Credit Services of America, is one of the first to examine the benefits of crop insurance beyond the farm gate. The states in question are key to the nation's grain output, normally supplying about 35% of U.S. corn production. Growers there paid $885 million in insurance premiums to cover 85% of the major crop acres eligible for 2012 insurance, so the net funds recirculating in the farm and rural economy were about $3.6 billion.
Source: DTN Progressive Farmer