Food securityGlobal Warming Increased U.S. Crop Insurance Losses by $27 Billion in 27 Years

Published 10 August 2021

Higher temperatures attributed to climate change caused payouts from the nation’s biggest farm support program to increase by $27 billion between 1991 and 2017, according to new estimates from Stanford researchers. Costs are likely to rise even further with the growing intensity and frequency of heat waves and other severe weather events.

A new Stanford University study shows hot, dry conditions caused by climate change have added billions of dollars to the cost of the federally subsidized insurance program that protects farmers against drops in crop prices and yields.

The study, published July 28 in Environmental Research Letters, finds that long-term warming contributed $27 billion to the losses covered by the U.S. crop insurance program from 1991 to 2017, or just over 19 percent of the $140 billion total. Rising temperatures contributed nearly half of the $18.6 billion in losses during the single costliest year, 2012, when record-smashing heat and severe drought engulfed much of the Midwest corn belt.

“We know that global warming is causing those really extreme thresholds to be crossed more frequently, and this new research shows that it is costing billions of dollars in the agricultural sector alone,” said lead study author Noah Diffenbaugh, the Kara J Foundation Professor in Stanford’s School of Earth, Energy & Environmental Sciences (Stanford Earth) and Kimmelman Family Senior Fellow at the Stanford Woods Institute for the Environment.

The new paper quantifies the contribution of historical warming to the rising cost of a decades-old safety net program for farmers funded largely by tax dollars. “The financial costs we identify are relevant for U.S. taxpayers and the U.S. crop insurance program, and they’re also relevant for quantifying the impacts of climate change more broadly,” Diffenbaugh said.

Crop Insurance in a Warming World
The U.S. crop insurance program, created in the wake of the 1930s Dust Bowl and expanded in 1980, now covers more than 80 percent of American cropland and costs the government an average of nearly $9 billion per year. “It’s far and away the largest source of farm support in the country,” said study co-author Marshall Burke, an associate professor of Earth system science.

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