Insight: As crop losses mount, farmers seen quicker to claim: (Reuters) - The drought ravaging America's prime farmland is having an unexpected consequence that could shape the future of agricultural finance: in some cases, farmers who have amped up their insurance coverage may be giving up on their crops early rather than to trying to save them.
"Why spend money trying to save a crop when every bushel of crop you save is then going to reduce the indemnity that you would otherwise receive?" said Vince Smith, an economist at Montana State University who has been critical of the program.
Consumers across the world will also pay at the grocery store: as more farmers give up, the corn crop shrinks, propelling prices even further beyond last year's $8 a bushel. Some analysts began revising down their crop estimates this week on the basis that millions of acres may not be harvested at all.
