For the first time, the February 2013 Government Accountability Office High-Risk Series Report lists climate change as a high financial risk factor for the U.S. government. Specifically, it addresses the impacts of climate change on agricultural production and the U.S. government’s ability to respond to impending agricultural crises. Citing the United States Global Change Research Program, the report states, “the impacts and costliness of weather disasters- resulting from floods [and] drought- will increase in significance as what are considered ‘rare’ events become more common and intense due to climate change.” The potential costs to the federal government are substantial, particularly with regards to its role as “insurer of property and crops vulnerable to climate impacts.”
GAO’s prescience has proven evident in recent weeks. The Midwest (to include Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, Ohio, North and South Dakota, and Wisconsin) has experienced debilitating extremes of drought and floods. Every county in Kansas and 89 of the 93 counties in Nebraska have been declared drought emergencies well before harvest season. Simultaneously, 48 of the 102 counties in Illinois experienced flooding and devastation of crop land.
The implications of the drought and flood cycle are far-reaching for U.S. markets and policy. According to the USDA and the EPA, the affected region accounts for 85% of U.S. corn production, 81% of U.S. soybean production, and approximately 67% of U.S. wheat production. Corn exports comprise the largest net contribution to the U.S. agricultural trade balance of all agricultural commodities- highlighting the importance of developing effective crop crisis response.
Drought and flood will continue to persist as long-term problems. Yet the current fiscally constrained environment further limits the government’s ability to respond in an ad-hoc fashion to crop disasters resulting from climate change. GAO recommends a new look at the way federal crop insurance functions, taking into account permanent changes in climate patterns that have emerged since the inception of federal crop and flood insurance programs. It also recommends concerted efforts at data collection and analysis to ascertain the impacts of long-term climate change exposure- both on agriculture and the structure of insurance. Most importantly, the GAO recommends a stronger relationship between the Secretary of Agriculture and the Secretary of Homeland Security regarding the effects of climate change on agricultural production- establishing U.S. food security as a matter of national security.
Photo: Drought designations as of May 2, 2013. Courtesy USDA Farm Service Agency.