Crop Insurance Indemnities for 2016 at Low Levels

Crop insurance indemnities for the 2016 crop year totaled only $3.653 billion, substantially under the $6.306 billion level for 2015 crops and at a loss ratio of .39 compared to .65 for 2015, according to Risk Management Agency (RMA) data.No major program crop registered indemnities of $1 billion or more for 2016 crops, a marked shift from 2015 when corn, soybean and wheat indemnities all were $1 billion or more. Corn just missed the mark for 2016 at $944 million.Loss ratios (premiums paid versus indemnities) is also at an historical low at .39, the lowest loss ratio for program as a whole based on data going back to 1989.The crop insurance program will still be under pressure in the coming farm bill debate – the premium subsidy in particular. But that premium subsidy for 2016 crops was also lower than 2015. Still, program backers will need to have their arguments ready as the new farm bill debate moves forward.