Climate change is raising costs for federal hurricane insurance for farmers

He hates to say it, but Ernest Fulford is hoping for a hurricane.

Storms tore through the Jefferson County grower’s 1,600 acres last fall, submerging thousands of pounds of freshly-dug peanuts in floodwaters and dropping fluffy white cotton bolls, weeks away from harvest, into the mud.

A crop insurance payout kept his Florida farm, a family legacy since the 1940’s, in business.

The Federal Crop Insurance Program, so far spared from the Trump Administration’s sweeping cuts, costs the government an average of $9 billion annually. Climate change could raise its price tag by up to a third by 2080, according to the U.S. Department of Agriculture Economic Research Service. Despite the increasing investment, the program struggles to accommodate small farmers and those, including Fulford, hit by back-to-back storms.

That worries agricultural economist Anne Schechinger of the Environmental Working Group, a nonprofit in favor of crop insurance reform.

“The crop insurance program really is not helping farmers adapt to extreme weather from climate change,” she said, noting that the program relies on past crop and weather data instead of forward-looking climate models.

“The past 20 years, specifically in historical yields, is not the next 20 years for these farmers.”

The program’s origins

Crop insurance, born from the Dust Bowl-era urgency to help farmers in times of disaster, operates through a partnership between the USDA Risk Management Agency and private insurance companies.

Growers buy policies from the private companies and front about 40% of the cost. The federal government contributes the other 60% and covers a portion of the insurer’s operating expenses.

The Congressional Budget Office and Government Accountability Office have both recommended decreasing premium subsidies and curbing administrative funding within the program, citing private companies’ above-average profits, but Congress hasn’t taken any such action.

The program’s cost to the federal government rose between 2014 and 2023, totaling $89 billion.

The feds introduced a hurricane-specific policy add-on in 2020 in response to pressure from storm-battered farmers in the Southeast and extended the program to tropical storms in 2023.

Last year, climate-friendly measures were added to the program’s list of accepted farming practices. “That was a really great change,” Schechinger said, but it didn’t fix everything.

A small farmer’s dilemma

The number of insured acres nearly doubled between 2014 and 2024 while the number of policies increased by less than 1%.

Nationally and locally, big farms got bigger while smaller farms disappeared.

“What we’re seeing in our area in Florida is there’s farmers getting bigger or there’s farmers going out of business,” said Lance Braswell, an insurance agent with Big Bend Farm Bureau. “So the number of farmers is going down, but the ones that we have are growing their production levels.”

Small farmers are disproportionately affected by climate change. They have fewer reserves to fall back on and are more likely to grow in disaster-prone areas.

They need the resilience provided by crop insurance the most, but are less likely than larger farmers to get coverage. Around three-quarters of farms with 500+ acres carry crop insurance, while less than 10% with 10 acres or fewer do.

“If you have more acres, you’re going to be receiving larger payments,” said Schechinger. “It’s really built into the program to benefit these large and oftentimes wealthy farms.”

In 2022, the 1% of farmers with the most expensive crop insurance policies received about a fifth of government subsidies, according to a report by the Government Accountability Office. A single nursery received a $7.7 million subsidy while most policyholders averaged $3,200.

Lower subsidies mean higher out-of-pocket costs to farmers, which can deter growers.

“It won’t matter if you’re in a county with hurricane winds if you weren’t able to get a policy or you couldn’t afford a policy,” Schechinger said.

When historical yields face historic storms

Insurers determine how much of a farmer’s crop they’ll cover depending on the grower’s past few years of production.

In a non-hurricane year, Fulford expects to harvest 1,200 pounds of cotton lint per acre. But hurricanes Idalia, Debby and Helene decimated his yields. Looking at his historical production, now agencies will only insure Fulford for half that much.

If a grower files a claim during a particularly bad season, most crop insurance policies will exclude that year’s yield in their calculations. But when areas face repeated catastrophes, record lows become new normals.

That’s why Fulford hopes for two extremes. If the growing season is perfect and he harvests all 1,200 pounds, he can rebuild his yield history and turn a profit despite low market prices. If a hurricane comes, he’ll at least get a crop insurance payment.

But if conditions are somewhere in the middle, say, a drought or a flood, Fulford could lose up to half of his crop and not get compensated despite paying for a policy.

“Basically, I don’t have insurance this year,” he said, referring to how much damage it’d take for him to see a return on his purchase. “It’s hard to put all that money into your crop knowing you’re most likely gonna have a loss at the end of the year. It’s hard to keep doing that year after year.”

A hurricane haven turned hotspot

Braswell, the Big Bend insurance agent, thought he had picked a quiet region in which to work.

“For the last hundred years, we had not seen a major storm,” he said. “We were in an area that we thought was not susceptible.”

Most farmers in the area didn’t carry any crop insurance. Those who did opted for the lowest level, called catastrophic coverage, just to qualify for other USDA programs and benefits.

Fulford himself carried only catastrophic coverage for decades and “never, ever” got a payment.

Florida experienced a hurricane drought between 2006 and 2015, with storms sparing the Sunshine State. Then Hurricanes Hermine, Irma and Michael hit the Big Bend between 2016 and 2018.

“When Michael hit us,” Fulford said, “if I hadn’t bought that extra insurance, it would’ve put me out of business.”

Hurricanes continued to ram the region. Hurricane Idalia arrived in 2023, followed by the one-two punch of Hurricanes Debby and Helene in 2024.

“When you have three hurricanes in two years [farmers] start to realize ‘we’re not immune’,” Braswell said. “We have to make sure we’re paying the extra premium to protect against that risk.”

The back-to-back hurricanes that struck Fulford’s farm last fall happen in West Florida an average of once every decade, but could occur as frequently as every one to two years by 2100 because of climate change, according to Princeton researchers.

Despite the rising frequency of double hurricanes, the insurance add-on allows for a maximum of one hurricane payout and one, lower, tropical storm payout per policy per season. It doesn’t use hurricane season forecasts or predictions like those from the Princeton researchers when setting premiums.

“It’s not really fair,” Fulford said. “Especially for areas like us that get hammered by hurricanes. Other areas of the country are not taking those yield hits.”

Fighting to farm

Even with last season’s hurricane payment and base crop insurance coverage, Fulford ended the year at a loss. He drives “an ‘09 truck that’s beat up”, waiting for a high-yield year to replenish his savings.

“I just wish things financially for farms were better right now,” Fulford said. “I’ve seen more farms go out of business this year because of low commodity prices and high input prices than I’ve seen my whole life.”

Fulford can’t describe why he has stuck it out other than the fact that farming is in his blood.

“I wish I didn’t love it so much,” he said. “I wish my kids didn’t love it so much.”

He’s tried to talk two of his sons out of the industry, telling them, “look, this is too hard of work for so little money and sometimes no money.”

They don’t listen.

His eldest son, Clay, is a partner on the farm and his 15-year-old is heading that route, too.

As their father finishes greasing some equipment, he thinks back to his wish for a hurricane. “Just a small one,” he amends, “that won’t destroy my crops.”

He laughs at the idea’s dissonance. “We’ve got to do what we’ve got to do to survive.”

This story was originally published by WUFT and shared in partnership with the Florida Climate Reporting Network, a multi-newsroom initiative founded by the Miami Herald, the Sun-Sentinel, The Palm Beach Post, the Orlando Sentinel, WLRN Public Media and the Tampa Bay Times.

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