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Two Arkansas counties among highest in region for flood crop insurance payouts

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Environmental Working Group
/
ewg.org
A new analysis shows the USDA has spent nearly $1.5 billion on flood crop insurance payouts in counties along the Mississippi River over the past two decades.

Farmers in some of the most flood-prone areas along the Mississippi River have received nearly $1.5 billion from the federal government over the past two decades. That’s according to a report from the nonprofit Environmental Working Group, which identified 41 counties in 10 states that received the most crop insurance payouts.

The multi-state report examined counties along the Mississippi River and its tributaries that received crop insurance payments from the U.S. Department of Agriculture because of flooding. Each of the 41 “hot spot” counties, including two in Arkansas, received at least $8 million in flood crop insurance payments between 2001 and 2020, totaling over $635 million or 44% of all payments in the region.

Anne Schechinger, midwest director for the Environmental Working Group, says crop insurance is designed to deal with yearly reductions in growers’ yields or revenue, not continued flooding that sometimes happens on a yearly basis.

“So if this year you have a big rain event as a farmer and you lose part of your yield, then you’re able to get a payment through the crop insurance program,” Schechinger said. “But what we found is that this program, because it’s so highly subsidized and how it’s set up as a yearly program based on historical yields, historical revenue, farmers really have a disincentive to adapt to climate change.”

Schechinger says each individual crop insurance policy is usually subsidized by about 60% by the USDA, regardless of whether growers are located in a flood-prone area. She says farmers likely wouldn’t farm in flood plains, and would instead choose to retire their land, were it not for the payments.

“They’re really marginal areas, you’re not going to get a lot of yield, so you wouldn’t actually make a lot of money without being propped up by these federal programs,” Schechinger said. “We do hear that a lot of farmers don’t want to farm these areas. They’d like to permanently retire and restore their land into a conservation easement, but there’s just not enough money to fund all of the farmers who want to do that.”

The USDA offers several programs for farmers seeking to convert their land into a conservation area. But, Schechinger says one of the largest such initiatives, the Agricultural Conservation Easement Program, has a very low acceptance rate.

“In 2019, farmers applied to retire over 400,000 acres through the wetland reserve easement portion of this program, but only 9% of all applications were enrolled. So there’s this big demand and it’s just not being met because of not enough funding,” Schechinger said.

Schechinger says retiring farmland and converting it to a conservation area is one of the best ways to reduce the country’s overall greenhouse gas emissions, of which agriculture makes up about 10%. With greenhouse emissions fueling climate change, she says, flooding appears to only be getting worse in the region.

“We know this region is also more vulnerable to extreme weather conditions, so we focus on flooding because flooding is just getting worse and worse in the Mississippi River, in the other rivers and streams that flow into the Mississippi, and the predictions in the future are for climate change to make flooding even worse for this region.”

The study examined the multi-state region of just over 1,000 counties known as the Mississippi River Critical Conservation Area. Missouri had the most “hot spot” counties that received flood crop insurance payouts, while Philips and Lee counties in eastern Arkansas had the highest number of payments in the state.