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It will be weeks before the full economic impact of the 2010 Florida freeze is known, but losses will likely top $1 billion with every agricultural sector experiencing damage.

Florida citrus alone is a $9 billion annual industry and the state's other top agricultural revenue-generators -- greenhouse and nursery products, sugarcane and tomatoes -- all took a pounding from the recent record cold. Federally backed crop insurance is the silver lining that could mean the difference between solvency and bankruptcy for Florida growers affected by the freeze.

The state's growers have a combined crop insurance liability of just over $3 billion, and "all of it is protected against the record freeze that hit this past weekend," said Bob Parkerson, president of National Crop Insurance Services in Overland Park, KS, a not-for-profit organization that administers the program for the government and oversees the 16 private insurance providers authorized to provide U.S. crop coverage. "Those producers who suffered losses can rest assured that crop insurance indemnities will be paid timely."

The percentage of losses covered will depend on policies held by individual growers, said Laurie Langstraat, director of communications for NCIS. Some growers purchase catastrophic coverage that only kicks in when crop losses reach 50 percent. Others have less stringent policies that cover percentages of any crop loss.

Ms. Langstraat compared the difference to buyers electing to carry different deductibles on automobile insurance policies. She said that covered farmers can expect to be reimbursed for 55-80 percent of losses, depending on their policies.

About half of Florida's insured orange growers carry catastrophic coverage, while the other half have less-restrictive policies, Ms. Langstraat said. She added that many growers also have supplemental insurance from private providers to make up the shortfall between actual losses and coverage from NCIS.

The crop insurance industry insures over 272 million acres and protects $80 billion in America's food supply. Over 80 percent of insurable acres are protected.

Ms. Langstraat said that she does not foresee an increase in rates for coverage in the wake of the freeze.

"The good thing about crop insurance is that the government sets the rates - - the private insurance companies don't have anything to do with setting the rates," Ms. Langstraat explained. "It's all based on historical data. This is a record freeze, nobody has seen anything like it before. Is it going to affect the 2010 losses for crop insurance? Absolutely. Is it going to affect the premium rates of those crops that were significantly impacted? Maybe, maybe not -- it may not even be blip on the radar screen. The whole purpose behind the crop insurance program is to handle stuff like this."

In 2009, weather led to late planting in about half of U.S. states. An early freeze and heavy snow led to conditions where "there are places where corn is still sitting in the fields" unharvested, Ms. Langstraat said. In 2008, economic conditions led to massive farming revenue losses, and the NCIS paid out a record $5.6 billion in indemnities.

"So this is nothing new for the crop insurance industry. Those producers in Florida who had the foresight to buy crop insurance, they're going to be helped. How significantly they're going to be helped depends on their individual policies," Ms. Langstraat said.

Since the NCIS program is backed by the government and losses are amortized over many years, "I can't imagine there would be any major increase in premiums for next year. It just doesn't work like that in the government program. Also, since it's a government program, all eligible producers that want access to this program have access. There's no worry for these farmers or producers that they won't have coverage. A private insurer might say, 'After that hurricane, holy cow, we're not writing in the state of Florida,' or 'We're not writing you because you live on that coast -- no way.' If you are deemed eligible and want crop insurance we have to sell you a policy. [Florida growers] don't have to worry about crop insurance going away next year."