By Lois Parshley
When David Marchant looked at the weather forecast in early July, he had a bad feeling. His 50-acre farm sits in the bend of the meandering Lamoille River in northern Vermont. He watched its banks warily as a steady downpour soaked the landscape. Soon, the river began to rise. By 7:30 the next morning, he and his crew were out in the mud, trying to harvest all they could save.
Two months’ of rain fell in two days. Despite their efforts, Marchant’s River Berry Farm quickly lost upward of 10 acres of crops, with lettuce and summer squash suddenly swimming in the flooded fields. He estimates the torrents cost him around $150,000 in just 48 hours.
The storm wiped out roads and bridges and inundated homes across the state. The catastrophe came at a particularly hard time of year for farmers to face disaster: In early summer, many are heavily invested in their season, but not yet able to harvest. The Vermont Agency of Agriculture, Food, and Markets estimates that the state’s food producers lost over $16 million as a result — somewhere between one-third and one-half of all the state’s yield.
As the climate changes, American farmers face a slew of new threats to their harvests and business models. More frequent floods and droughts can wipe out months of work overnight. Rising temperatures are expected to slow plant growth in the Northern Hemisphere within the next decade, while higher carbon dioxide levels reduce the nutritional value of fruits and vegetables. Altogether, a recent NASA study found that some yields could decrease 24 percent by as soon as 2030.
Research from the American Farm Bureau Federation suggests that nationwide, natural disasters caused $21.5 billion in agricultural losses last year. Only about half of those were protected by insurance, the majority of which is sold through federally-backed programs. Their payouts to farmers have increased over 500 percent in the last two decades.
Back in 2007, a report from the Government Accountability Office, or GAO, called climate change a looming threat to insurance markets, and pointedly noted that while large private insurers were already incorporating it into their risk management, the two major federal insurance programs — for flooding and agriculture — ”have done little.”
That’s a problem not only for food security, but for the people growing the nation’s food. “I don’t think there is an appreciation of how significant the detrimental changes might be, because I think people are thinking things are already bad,” said Jeffrey Amthor, principal scientist at Verisk Analytics, a risk assessment firm that advises insurance and reinsurance companies.
Shortly before this summer’s flooding, Grace Oedel, the executive director of the Northeast Organic Farming Association of Vermont, was helping growers deal with hazardous wildfire smoke from Canada. Before that, a late spring freeze withered buds on apple trees and blossoms on blueberry bushes, costing Vermont farmers $10 million in lost production. The nonprofit has an emergency fund that food producers can apply to, and in the last few years, the organization has seen a surge in such petitions. “It just feels like nothing’s predictable,” Oedel said.
The financial stress this causes can be devastating: One recent study found 60 percent of farmers and their children are experiencing depression — about double the national average. Suicides within farm families are skyrocketing. “It’s definitely intensifying,” Oedel said. “The question is, how long can these farmers hold on before they get some kind of support?”
April 14, 1935, began as a sunny, spring Sunday in Kansas. But by afternoon, a dark cloud billowed over the horizon, so dense it obscured sunlight like an eclipse. It lashed across the plains at 60 mph. People suffocated, their lungs filled with dust. “The onrushing cloud, the darkness, and the thick, choking dirt, made this storm one of terror,” reported the Weather Bureau, now known as the National Weather Service.
The “black blizzard” was formed of displaced topsoil, becoming one of the worst of the Dust Bowl’s storms that drove hundreds of thousands of people off their land in search of other work. A lethal combination of destructive farm practices and an extended drought desiccated the region. In response, Congress authorized the Federal Crop Insurance Program, or FCIP, in 1938. No one was sure it would work. At first, the effort ran into the same hurdles private insurers had: Participation was low because rates were high, yet payouts still greatly exceeded premiums. At the time, the Christian Science Monitor asked, “Will the program become in effect an underwriting of high-risk areas which in fact ought to be retired from farming?”
Nevertheless, by 1980, the federal government decided to bolster its support for crop insurance, eliminating an overlapping disaster payments program. As part of the Federal Crop Insurance Act of 1980, the U.S. Department of Agriculture, or USDA, authorized a small number of private companies to sell these policies, while heavily subsidizing their cost. Today, taxpayers cover about 60 percent of these premiums, more than ever before.
If weather reduces an enrolled farmer’s yield or revenue from a particular crop, the FCIP will issue indemnity payments, essentially guaranteeing a set amount of income. Most of those subsidies are going to commodity crops; corn, soybeans, wheat, and cotton have received 75 percent of all payments in the last two decades. “It’s really concentrated to just a few states, and also just a few crops,” said Anne Schechinger, Midwest director at the nonprofit Environmental Working Group, which recently published a report on crop insurance.
While these average yields are supposed to be set by looking at a grower’s historical output, in practice, bad years are frequently excluded from those calculations, said Schechinger. “That’s something we see a lot in California, Texas, Oklahoma,” she said. A provision called Actual Production History Yield Exclusion allows farmers to ignore up to 15 bad years when calculating typical yields, falsely raising insurance payouts. This misrepresentation is highest in the southern Great Plains — the same region that experienced the worst consequences of the Dust Bowl.
The FCIP will also pay the same farmers for the same kinds of losses year after year — and it often does. One hotspot for claims is the Mississippi River Critical Conservation Area, a USDA-designated area across 13 states. It has accounted for $1.5 billion of federal payments from flood damage since 2001, which Schechinger says could have instead been used to transition more 300,000 acres of frequently inundated land out of production. Forty unlucky counties, primarily in the Corn Belt, received payouts for losses related to both drought and extreme precipitation every year for the last two decades. Failing to account for these risks in insurance policies raises the chance that today’s potential solutions will become insufficient.
Critics say the crop insurance program is now actually deterring climate adaptation by minimizing the true costs of growing in places that have become unsuitable. In some cases, federal crop insurance is also actually making climate impacts worse: As groundwater declines across the Midwest, for example, farmers may risk losing coverage if they take steps to conserve water, since irrigated crops receive higher payouts. This highlights the need for urgent reforms in the next farm bill, legislation passed approximately every five years that addresses the United States’ agriculture and food systems. “We know the last 20 years aren’t the next 20 years,” Schechinger said.
Last year, federal crop insurance payments topped $19 billion — the highest since 2001, when current subsidy levels were set. (A USDA spokesperson told Grist, “The total amount of losses has increased during that time, but so has the program’s size.”) According to several reports from the GAO, the share of the total costs paid by taxpayers has also increased.
Yet a third of all subsidies for the FCIP are now being paid out not to farmers, but the private companies that sell and service its policies — many of whom are large corporations. In addition to their administrative costs, these companies earn a 14.5 percent return from the government, much higher than similar industries, like property insurance. Reducing that overhead rate could free up financing for the growers who need it most.
This could expand other federal programs like the Whole Farm Revenue Policy, which insures the revenue of all the commodities on a farm, making it more accessible to the kinds of small, diversified operations that grow for farmers markets. “It’s a great policy, but it’s not subsidized as highly,” said Schechinger, “so not that many farmers use it.” She adds that insurance agents are typically compensated based on the value of the premiums they sell, incentivizing them to sell more expensive policies to larger players. The USDA introduced a “Micro Farm” program in 2022, which is intended to be a better fit for small operations, but nationally, there have only been 120 such policies sold so far.
Watchdog groups like GAO have long criticized the crop insurance program’s poorly managed approaches — like propping up water-intensive cotton growers in the Southwest desert — but clearly the risks to farmers are also rapidly increasing. Hundreds of cattle died this summer in Iowa as the heat index climbed to 117 degrees Fahrenheit. In addition to extreme temperatures, ongoing drought continues to plague much of the Midwest’s breadbasket. According to recent research from Stanford University, climate hazards have increased annual crop insurance losses by about $1 billion every year since 1991.
The threat of such catastrophes now looms over agriculture across the country. As sweeping changes start to alter what food can be produced where, Schechinger says Congress needs to “really reevaluate how we’re doing business as usual.”
The next farm bill, though its timing is uncertain due to a looming government shutdown, will determine federal agriculture policy for the next five to 10 years. It is expected to be the most expensive in the country’s history. “We choose how we subsidize everytime we make a farm bill,” Oedel, of the Northeast Organic Farming Association of Vermont, said. “That is a policy choice, not a reality about how food has to grow.”
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