By Jamie Martin
Farmers across the United States rely on crop insurance to manage risks, but costs vary greatly by region. A recent study by the University of Arkansas System Division of Agriculture found that farmers in Arkansas, Louisiana, and Mississippi pay up to six times more for insurance than those in the Midwest.
The main factor is hurricane risk. From 2002 to 2021, thirty named storms affected the Mid-South, causing significant crop losses. Insurance rates reflect this threat, with premiums much higher than in Illinois, Indiana, Iowa, and Minnesota.
“I began to study the price of insurance crop insurance across the United States, and what I noticed was, there were vast differences in prices between what folks in the South and primarily the Mid-South would pay versus those in the upper Midwest. One thing that I begin to think about and do some research on is what's different about the Mid-South?” said economist Hunter Biram.
Many counties in Arkansas are not included in the USDA’s Hurricane Insurance Protection program, leaving farmers exposed to storm losses. Rice farmer Drew Flowers shared that even winds as low as 30 miles per hour can knock down rice crops, making harvest slow and expensive.
The study shows that even northeast Arkansas, far from the coast, faces risks equal to or greater than some areas in Louisiana. This raises concerns about fairness in insurance coverage and highlights the need for policy adjustments.
Biram suggested working with the USDA’s Risk Management Agency to create solutions that better reflect hurricane risk in inland areas. “I think the next step would be to visit with the Risk Management Agency and other policy makers to find a way to help farmers in northeast Arkansas manage hurricane risk. I know it sounds interesting to think that we need to manage hurricane risk in northeast Arkansas,” said Biram.
The findings stress the importance of insurance support in helping farmers stay resilient against natural disasters. Hurricanes remain a key driver of agricultural risk in the Mid South.
Photo Credit: istock-urpspoteko
Categories: National