Producers should initially sign up for new insurance option
A Texas A&M AgriLife Extension Service economist said the only decision farmers need to make soon concerning the U.S. Department of Agriculture Risk Management Agency announcement Tuesday of counties covered under the new Supplemental Coverage Option insurance program is “go ahead and sign up.”
Dr. Joe Outlaw, co-director of the Agricultural and Food Policy Center at Texas A&M University and AgriLife Extension economist in College Station, spoke at the Cattle Trails Wheat and Stocker Conference at Wichita Falls shortly after the announcement was made.
With the crop insurance deadline looming in September and many of the final details unknown on the farm bill, the best thing for producers to do now is go ahead and sign up for the Supplemental Coverage Option, or SCO as it will be known, when they purchase the individual coverage they normally buy, he said.
They have several months to drop SCO if they decide they do not want it or if they select the Agricultural Risk Coverage, or ARC as it will be known, on their wheat through the USDA Farm Service Agency, he said. Choosing the Agricultural Risk Coverage will automatically make them ineligible to buy or keep SCO.
Outlaw said the final decision doesn’t have to be made until December, so producers should go ahead and sign up for SCO now and then drop it before the deadline if they decide it is not for them.
“If you choose ARC, you are not going to be able to buy the supplemental coverage,” Outlaw said. “Also, if your county isn’t available for SCO on wheat, then you don’t have to worry about it.”
He said all the major wheat growing regions of Texas were included in the coverage map.
Outlaw explained that SCO provides extra protection over and above the normal coverage for a premium and can be thought of as covering part of the deductible associated with the producers’ individual coverage.
“Coverage starts at 86 percent and ends at the individual protection level,” he said. “So if a producer normally purchases 65 percent coverage, the SCO policy would cover from 86 percent down to 65 percent for an additional premium.”
“All it is doing is letting you cover more of that deductible area,” Outlaw said. “Most producers know year in and year out they won’t have enough loss to get past their deductible. This provides the opportunity to get more coverage at a pretty cheap rate. You are going to have to make a choice if you are in a covered county.”
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