Crop insurance claims hit record high after year of drought

• January 30, 2013
farmer in maize field

Farmer in maize field, Creative Commons: Neil Palmer CIAT, 2010

After a year of pervasive global drought slashed farm yields and drove up food prices, crop insurance claims reached an all time high.  Munich Re, the world’s biggest reinsurance company, reports that claims hit $23 billion for 2012.  This record comes as recent research bolsters the growing recognition that climate change will exacerbate the global food crisis and hurt food security.

Globally, only about 20% of crops are insured, which indicates that gross losses in crop values due to climate impacts are likely much higher than reported by Munich Re.  In the US, where 85% of farmland is insured, farmers will take $15 billion in insurance claims after record-breaking heat waves damaged crop productivity.  Nearly half the US is still experiencing abnormally dry conditions, according to the US Drought Monitor.

Dry weather also damaged crops in the past season in Russia, Kazakhstan, Ukraine, Argentina and Brazil, while Poland suffered from a cold snap and the U.K. had its second-wettest year on record.  Flooded fields probably cost British farmers about $2.1 billion (1.3 billion pounds) in damage, much of which wasn’t insured.

Read more: Bloomberg>>

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About the Author

Karl Burkart is the Digital Communications Director for the GCCA, the Global Call for Climate Action, and TckTckTck, a network of 400+ diverse organizations working around the world for greater action on the growing problem of climate change. Karl also blogs on technology and the environment for a variety of publications. You can follow him on Twitter @greendig.

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