Corn growers get two-thirds of record U.S. crop insurance payout

WASHINGTON Mon Feb 11, 2013 6:26pm EST

WASHINGTON Feb 11 (Reuters) - U.S. corn farmers collected two-thirds of the record $14.2 billion in crop insurance indemnities paid so far for losses due to drought and other bad weather in 2012, the government said on Monday.

In a weekly summary, the Agriculture Department said corn growers had received $9.27 billion through the federally subsidized program, far more than the $1.85 billion sent to soybean farmers, the second-largest crop total.

Illinois was the leading state for indemnities with a total of $2.34 billion, followed by Iowa at $1.73 billion. Iowa and Illinois are the two leading corn-producing states. The total for payments, $14.2 billion, was $550 million from the preceding week.

Over the weekend, the farm policy group AGree called on Congress to require farmers to practice soil conservation in order to qualify for crop insurance subsidies. At present, so-called conservation compliance is tied to crop subsidies.

Record-high commodity prices have made crop insurance the largest element of the farm safety net and made traditional subsidies irrelevant.

The Senate voted last year to tie crop insurance to soil conservation and to require the wealthiest farmers to pay a larger share of the premium. Both measures died at the end of the year.

The government pays 62 cents of each $1 of the premium.

USDA issued the summary at the same time that trade groups for the crop insurance industry held winter meetings in California.

Indemnities may total as much as $20 billion - nearly double the record $10.8 billion paid on 2011 crops - analysts say. Insurers, who collected $11 billion in premiums on 2012 crops, face the first money-losing year in a decade.

Some 85 percent of eligible land, or 281 million acres, was covered by crop insurance in 2012, setting a high for coverage. (Reporting by Charles Abbott, editing by Gary Crosse)