Assessing Climate Risk on Agricultural Production: Insights Using Retrospective Analysis of Crop Insurance and Climatic Trends

TitleAssessing Climate Risk on Agricultural Production: Insights Using Retrospective Analysis of Crop Insurance and Climatic Trends
Publication TypeConference Paper
Year of Publication2017
AuthorsReyes J.T., Eischens A, Shilts M, Williamson JC, Elias EH
Conference NameAmerican Geophysical Union
Date Published12/2017
PublisherAmerican Geophysical Union
Conference LocationNew Orleans, LA
ARIS Log Number354980

The collaborative synthesis of existing datasets, such as long-term climate observations and farmers’ crop insurance payments, can increase their overall collective value and societal application. The U.S. Department of Agriculture (USDA) Climate Hubs were created to develop and deliver science-based information and technologies to agricultural and natural resource managers to enable climate-informed decision-making. As part of this mission, Hubs work across USDA and other climate service agencies to synthesize existing information. The USDA Risk Management Agency (RMA) is responsible for overseeing the Federal crop insurance program which currently insures over $100 billion in crops annually. RMA hosts data describing the cause for loss (e.g. drought, wind, irrigation failure) and indemnity amount (i.e. total cost of loss) at multiple spatio-temporal scales (i.e. state, county, year, month). The objective of this paper is to link climate information with indemnities, and their associated cause of loss, to assess climate risk on agricultural production and provide regionally-relevant information to stakeholders to promote resilient working landscapes. We performed a retrospective trend analysis at the state-level for the American Southwest (SW). First, we assessed indemnity-only trends by cause of loss and crop type at varying temporal scales. Historical monthly weather data (i.e. precipitation and temperature) and long-term drought indices (e.g. Palmer Drought Severity Index) were then linked with indemnities and grouped by different causes of loss. Climatological ranks were used to integrate historical comparative intensity of acute and long-term climatic events. Heat and drought as causes of loss were most correlated with temperature and drought indicators, respectively. Across all SW states increasing indemnities were correlated with warmer conditions. Multiple statistical trend analyses suggest a framework is necessary to appropriately measure the biophysical signals in crop insurance trends taking into account spatio-temporal characteristics. Based on stakeholder feedback, we also developed a web-based information browser to visualize and assess indemnity trends providing useful and usable knowledge to support informed land management decisions and ecosystem resilience.