U.S. drought prompts record crop insurance payout

washington / reuters Crop insurers have paid a record $11.6 billion to U.S. growers in compensation for losses due largely to widespread drought in 2012.

Some analysts expect indemnities to reach $20 billion this year, nearly double the old record set in 2011. That would mean steep losses as insurers collected just over $11 billion in premiums.

Washington not only pays 62 per cent of premiums but is on the hook for about three-quarters of underwriting losses. Crop insurance is the largest U.S. farm support.

Some 85 per cent of eligible farmland, 281 million acres, was covered by $116 billion worth of policies in 2012.

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