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Agricultural News

Cotton Producers Have Crop Insurance Options for the 2019 Crop Year

Sat, 02 Mar 2019 21:41:58 CST

Plains Cotton Growers, Inc., has developed a new resource for cotton
producers currently evaluating crop insurance options for 2019. With the
addition of Seed Cotton as a Title One covered commodity starting in 2018
and continuing under the 2018 Farm Bill, cotton producers throughout the
United States have a new dynamic to consider when determining how to
structure their risk management portfolios beginning with the 2019 crop

A major part of this process, which involves evaluating the potential
integration of multiple coverage enhancing options available through the
federal crop insurance program, is the decision between the Stacked Income
Protection Plan (STAX) or the Supplemental Coverage Option (SCO). PCG's new
resource focuses on this decision.

For cotton producers with Seed Cotton base acres on their farms, the Title
One/crop insurance integration decision involves determining how to build
their insurance coverage around the Title One protection provided by
either the Price Loss Coverage (PLC) or Agriculture Risk Coverage (ARC)
programs administered through the USDA Farm Service Agency. It is
important to note that the 2018 Farm Bill imposes several restrictions,
some new and some carried over from the 2014 Farm Bill, on the purchase of
STAX and SCO policy endorsements on farms planted to cotton.

Beginning with the 2019 crop year STAX coverage will only be available for
purchase on farms that are NOT ENROLLED in either the PLC or ARC programs

That means STAX can only be purchased on farm(s) (identified by FSA farm
number) that either have ZERO Seed Cotton base or on a farm(s) where the
producer decides NOT TO ENROLL seed cotton base and participate in either
PLC or ARC for that production year. Because STAX is a cotton only product
the combination ARC/PLC STAX restriction only applies to farms with seed
cotton base eligible to participate in those programs.

Unlike STAX, SCO is ONLY available on farms ENROLLED in the PLC program
with an underlying insurance policy. Any producer enrolled in the Price
Loss Coverage (PLC) program for an insured crop, including cotton, can
purchase an SCO endorsement.

For new cotton producers or growers who have little or no farm program
base for Seed Cotton, the STAX vs. SCO decision will strongly hinge on
whether or not an additional layer of insurance protection is needed and
which of the available insurance options best fit their risk management

"We hope that this handout will help address questions our growers may
have about STAX and SCO and which may be best for their operation as they
evaluate their crop insurance options," PCG Executive Vice President Steve
Verett said. "We encourage growers to carefully consider the differences
between the two programs and work with their crop insurance agent to make
these important decisions."

The document can be found by clicking or tapping here.

Source- Plains Cotton Growers, Inc


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