When it comes to flooding and farming it seems that insurance never covers it. In South Carolina, which saw massive flooding in October, farmers, government officials and insurers are just now beginning to come to grips with the extent of the devastation.
Officials estimate about $376 million in crop losses in the state, plus another $114 million in lost wages and another $65 million in losses to the forest products industry.
The 2014 Crop Bill changed how crop insurance works and instead of receiving guaranteed payments, today farmers rely primarily on private insurance, which is proving to be a mixed bag. South Carolina Assistant Agriculture Commissioner Aaron Wood told Insurance Business America that crop insurance simply wasn’t designed for such catastrophic losses. Still, he said “Insurers are doing what they can for farmers,” and are working with the state and the industry to mitigate losses as best they can.
Crop insurance, though, typically covers about 70% of a loss, depending on the details of any particular insurance package of course, leaving even reasonably well insured farmers facing significant losses.
Gov. Nikki Haley is pushing the feds and insurers to move quickly and reduce the time it takes for farmers to collect. Normally, farmers have to harvest their crops before the value of lost crops can be determined for insurance purposes, but Haley and Wood are saying some crops are obviously a total loss, cannot be harvested, and that farmers should not have to spend money trying to harvest something that can’t be harvested.
Wood said the flooding of October was not the end of the disaster as three significant rain events since then as well as “just rainy, humid weather overall” has continued to damage crops. “Cotton is just falling off the plants,” he said. “You can’t harvest it.”
While the total loss of around $500 million so far only represents about 1% of the state’s overall agriculture industry, some parts of the state and some crops were hit very hard.
“Ginners are hurting because there is just no cotton to gin,” he said. He added that after the first big flood event, officials estimated that the state’s soybean crop would take a 50% loss. As time has gone on and rains and humidity have continued, he said losses are now expected to total about 80% in soy.
