Big Data and the Damage of Droughts

Despite the awful droughts of the summer, many farmers have been able to avoid economic disaster with the help of big data; as discussed in Wired’s “Big Data Shows Hyperlocal Harshness of 2012 Drought”, crop insurance companies have been processing large amounts of weather data in many states and using it to accurately determine appropriate amounts of financial compensation for drought-damaged crops. In addition, by compiling the data, these companies are able to display a close-up, detailed view of the drought’s impact on America’s crop yields as a whole.

One insurance company that seems to be taking a great interest in this modern face of insurance is The Climate Corporation, a six-year-old crop insurance company based in San Francisco. By doing daily measurements of ambient temperature and soil moisture, the company can determine exactly how many days presented crop-damaging levels of stress and provide financial aid accordingly. In addition, the large amounts of data processed can be used to predict future temperatures, precipitation levels, and subsequent crop yields with unrivaled accuracy.

For example, The Climate Corporation tracked the number of days in which temperatures and soil moisture reached the “heat stress” and “wilting” points in one particular Oklahoma farm. For every day that the crops suffered these undesirable conditions, the farm’s owners were compensated by a certain amount of money per acre. In this case, the farm spent most of the summer in the heat stress zone and the entirety of July and August in the wilting zone; fortunately, these recordings ensured that the farm received the economic assistance it needed in order to avoid major losses.

While the crop insurance data helps to secure the business against major losses, The Climate Corporation claims that it is possible that climate conditions could become so poor that crop insurance wouldn’t make economic sense. In that situation, farmers would have to either accept lower profit margins or raise their prices; over time, such difficulties could make farming unsustainable in some areas. Fortunately, however, that point has not yet arrived; in spite of the severity of this summer’s drought, The Climate Corporation states that it was not unprepared for it; CEO David Friedberg remarked that, “It’s not like a 99.999-percent thing that we never accounted for… We can have a good sense of the range of uncertainty.”

As a resident of a state whose income is heavily crop-based, I have to admit to a good deal of relief; without protections like these, it’s probable that my own community would have been far more devastated by the hardships of this past summer than it was. Also, I really like the idea that, by analyzing all of this data, these crop insurance companies are going to be more capable of predicting problems like these in the future; that way, our farmers will have more of a chance to prepare for them, and we might be able to avoid the worst of what nature has to offer. Chalk one up for big data!