Pro Farmer Extra
- From the Editors of Pro Farmer newsletter -
March 21, 2014
Today's perspective is provided by Pro Farmer associate editor Meghan Pedersen and Washington Consultant Jim Wiesemeyer
Q&A on crop insurance provisions of the new farm bill
The Risk Management Agency shared question and answers on crop-insurance provisions in the new farm bill. Here are the highlights.
What is the Supplemental Coverage Option (SCO)?
SCO is a county-level revenue or yield-based optional endorsement that covers a portion of losses not covered by the deductible of the same crop’s underlying policy. Indemnities will be payable once a 14% loss has occurred in the county, and individual payments will depend upon coverage levels selected by producers. The premium subsidy is 65%. Producers may not enroll a crop in both SCO and Agricultural Risk Coverage (ARC). However, producers may participate in both SCO and Price Loss Coverage (PLC).
What if I decide I want to enroll into the ARC program after I’ve selected SCO coverage for winter wheat?
Producers who enroll their winter wheat in SCO may withdraw from SCO prior to their acreage reporting date without any penalty or crop insurance premium charge.
Is there anything available for whole farm policy coverage?
Approval of a new whole farm policy is currently undergoing the process to attain the FCIC board approval. Pending approval, producers might be able to enroll in the spring of 2015. It would be a pilot program limited to certain geographic regions.
What is the upland cotton Stacked Income Protection Plan (STAX)?
STAX protects against county-wide revenue losses and can supplement a producer’s underlying cotton policy or be purchased as a standalone policy. Producers can elect coverage of up to 20% of expected county revenue, depending on the coverage level of their individual cotton insurance policy. STAX payments begin when county revenue falls below 90% of its expected level. The premium subsidy for this coverage is 80%. Any acres covered by a STAX policy may not be covered by a SCO optional endorsement.
Will I be able to purchase SCO or STAX for the 2015 crop year?
It depends. RMA is making every effort to offer these programs to as many producers as possible. SCO will be available for corn, grain sorghum, rice, soybeans, spring wheat and winter wheat in selected counties for the 2015 crop year. The same is true with STAX for cotton growers. Program details and eligible counties will be made available in the summer of 2014 for both programs.
How do the crop insurance provisions help new/beginning farmers?
A beginning farmer and rancher will be exempt from paying the $300 administrative fee for catastrophic coverage policies and they receive premium subsidy assistance for additional coverage policies that is 10 percentage points greater than what is otherwise available.
Also, if beginning farmers have a poor-yielding crop, they may replace the poor yield in their yield history for determining next year’s guarantee with 80% of the county T-Yield, which is 20 percentage points higher than they previously would have received.
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