The Growing Prevalence of Flood Damage in Agriculture
Flood damage can impact an agricultural operation in many ways. Not only can a flood make a field unsuitable for planting, but it can also ruin crops that have already been harvested. According to the FDA, flood water is “inherently unsanitary,” and “food that has been in contact with floodwater to be unfit for human consumption.” Damage to crops stored in grain silos can mean thousands of dollars in losses.
As floods grow more common in many parts of the country due to climate change and unpredictable weather patterns, ag professionals will have to find ways to mitigate the risk of flood damage to their crops and farmland investments.
This article will take a look at the impact of flood damage in agriculture, as well as ways that ag lenders can use data-driven intelligence to address these risks.
How Climate Change Drives Flood Damage in Agriculture
In the U.S., much of the conversation around climate change has been around drought in the West. Droughts are expected to become longer and/or – in many parts of the U.S. – the swings between wet and dry seasons will become more intense.
But the American West is also at risk of increased flooding, as changing rainfall patterns lead to less snowpack and more streamflow in the spring. These areas may experience increased runoff and soil depletion, diminishing their value as farmland. In the Midwest, flooding can lead to submerged fields, damaged crops, and drowned livestock. Floods don’t always lead to agricultural damage, however, and there can even be benefits to farming in floodplains.
By understanding the specific risks associated with flood damage in a particular region, ag finance institutions can take steps to mitigate these risks and improve the long-term viability of the farms in their portfolios.
Impacts of Flood Damage in Agriculture
The National Oceanic and Atmospheric Administration (NOAA) found that extreme weather events led to over $1 trillion in damages in 2016, including three flooding events in Texas and Louisiana that surpassed $1 billion in damages each.
Not only are floods expected to become more frequent due to climate change, but the swings between wet and dry seasons can exacerbate the risk of flood damage. Droughts can make farmland more susceptible to subsequent flooding when the two weather extremes happen one after the other. According to this study:
“Mediterranean climate regimes are particularly susceptible to rapid shifts between drought and flood… A 25% to 100% increase in extreme dry-to-wet precipitation events is projected, despite only modest changes in mean precipitation. Such hydrological cycle intensification would seriously challenge California’s existing water storage, conveyance, and flood control infrastructure.”
Flash floods represent a particular challenge because they can be hard to prepare for. The Journal of Hydrology looked at the impacts of flash flooding in the period between 1996 and 2017. After analyzing nearly 75,000 flood events, they found that the overall frequency of flash flooding has increased and that these floods are “more frequent in summer and less frequent but longer in winter,” lasting an average of 3.5 hours.
As NASA explains, “heavy rain events… can overwhelm the local watershed’s capacity to absorb excessive water.” Even when rain is needed, it can fall in the wrong place at the wrong time, disrupting the water cycle and leading to agricultural damage.
Damaged Farmland is a Risk To Ag Lenders
Even if farmers have flood insurance, extreme weather events can cause premiums to greatly increase. Floods can cause long-term damage to farmland that can reduce its longevity and profitability.
Data-driven intelligence can enhance the risk discovery process so lenders know which parcels of land should have flood protection infrastructure. As FarmProgress points out, “Good planning and investment by private landowners and agricultural producers can prevent flooding and protect land interests and assets.”
These measures include investing in better drainage infrastructure and maintenance so that watercourses aren’t blocked by debris and sediment. Other options include shifting to more resilient land management practices such as planting cover crops that reduce runoff and improve the soil’s capacity to hold water.
How Data-Driven Intelligence Can Mitigate Flood Damage in Agriculture
By using data to inform their lending and investment decisions, ag professionals can be proactive about mitigating flood risk. For example, lenders should be familiar with flood zones and other water risk considerations for each property in their portfolio. GIS tools can make this process easier by presenting data in a geospatial format.
Other useful information includes FEMA narrative and panel codes, which identify zones such as Special Flood Hazard Areas, moderate to low hazard areas, and undetermined areas. These can help ag professionals understand flood insurance requirements, and assess risks that are specific to coastal regions and floodplains.
AQUAOSO provides this information in reports so that users can access it easily for all parcels of land in their portfolios. Users can include up to 40 APNs in each PDF report, cutting down on the time it takes to research and assess multiple parcels.
Flood risk is just one part of a water risk assessment in agriculture, but with data-driven intelligence — backed by secure cloud-based GIS software — ag lenders and investors can be empowered to make better decisions and reduce their overall financial risk.
The Bottom Line
Floods are expected to become more frequent and unpredictable because of climate change, resulting in billions of dollars in losses to crops and farmland. Some areas are at risk of flash flooding, while others may experience sudden swings between wet and dry weather, leading to excess runoff and soil depletion.
Ag professionals should be prepared to apply parcel-specific risk mitigation strategies to reduce flood risk across their portfolios.
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