U.S. crop insurance payouts rise sharply
Insurance payments to farmers in the United States for crops lost due to droughts and flooding have more than tripled in the last 25 years.
The report fuels fears that insuring the nation’s crops will become more expensive for insurance companies, farmers, and taxpayers as climate change causes more erratic weather events that disrupt agriculture.
The federal government pays roughly 60% of crop insurance premiums through taxpayer subsidies, and those premiums tend to rise as insurance payouts grow. According to the nonprofit environmental group, which examined publicly available data from the U.S. Department of Agriculture, insurance payments to farmers due to drought increased more than 400 percent between 1995 and 2020 to $1.65 billion, while costs due to excess moisture – such as floods – increased nearly 300 percent to $2.61 billion. The number of insured acres increased by only 84.5 percent during the period studied by EWG.
The climate crisis has increased insurance payments and premium subsidies as extreme weather has become more common.
The report did not include average premium increases since 1995. The cost of insuring crops, on the other hand, could rise by 3.5 percent to 22 percent by 2080 as a result of climate change, even if farmers adapt what and where they plant. Corn, soybeans, wheat, and cotton are the most commonly insured crops.
Gold down
Gold was lower in Asia on Thursday morning, extending losses after falling the most in two months. Investors are still digesting the Federal Reserve’s more hawkish-than-expected stance, as well as hints of an “imminent” interest rate hike. The dollar index, which usually moves in the opposite direction of gold, rose on Thursday.
The yellow metal fell 1.5 percent in the previous session following the Fed’s latest policy decision.
The drop erased gold’s gains in 2022 to date, with the improvements driven by investor bets on continuing negative accurate rates even as interest rate hike expectations grew. Despite the Fed’s hawkish turn, safe-haven gold could still benefit from rising geopolitical risks.
In response to the Fed decision, Goldman Sachs Group Inc raised its 12-month gold forecast to $2,150 an ounce from $2,000, citing slower U.S. growth, a rebound in emerging markets excluding China, and faster inflation. Investors are now waiting for the South African Reserve Bank’s policy decision, which is expected later in the day. The Bank of England and the Reserve Bank of Australia are also likely to make policy decisions in the coming week.
Silver, platinum, and palladium were among the precious metals that fell.
