Six questions for your crop insurance agent — Seven if you grow rice.

by Keith Coble and Brian Williams 

  1. What about enterprise units?

To qualify for enterprise units you must have at least two sections, section equivalents, FSA farm numbers, or units established by written unit agreement.  The requirements for enterprise units must be met for each of the irrigated and non-irrigated acreage for you to qualify for separate enterprise units by practice.

You may only elect to have separate enterprise units (EU) for both your irrigated and non-irrigated acreage and each must independently qualify as an enterprise unit.  The additional subsidy associated with enterprise units versus basic and optional units are shown for various coverage levels in Table 1.

Table 1.

Coverage Level Basic & Optional

Subsidy %

Enterprise Unit Subsidy % SCO Subsidy STAX Subsidy %
50% 67% 80% 65%
55% 64% 80% 65%
60% 64% 80% 65%
65% 59% 80% 65%
70% 59% 80% 65% 80%
75% 55% 77% 65% 80%
80% 48% 68% 65% 80%
85% 38% 53% 65% 80%


  1. May I qualify for trend adjusted yields?

Most crop yields reflect upward trends due to technological change.  The Trend-Adjusted (TA) APH adjusts yields in APH databases to reflect increases in yields through time. Trend adjustments are made on each eligible yield within your APH based on the county’s historical yield trend. The actuarial documents provide the historical yield trend. The approved APH yield is calculated using trend-adjusted yields and any other applicable yields within the APH database. Note TA results in a higher approved yield and greater indemnity payments, which results in higher premium rates. 

  1. May I qualify for APH yield exclusions?

The APH Yield Exclusion (YE) was created by the 2014 Farm Bill and allows for the exclusion of an actual yield for a crop year when RMA determines the county per planted acre yield for a crop year was at least 50 percent below the simple average of the per planted acre yield for the crop in the county for the previous 10 consecutive crop years. When a county triggers, contiguous counties are also eligible for YE.  YE is determined separately for irrigated and non-irrigated acres.  YE allows a producer to exclude an actual yield from the APH history for years where YE triggered.  Multiple years may be excluded if the county data indicates triggering.  YE results in a higher approved yield and greater indemnity payments which results in higher premium rates.  One may utilize YE and trend adjustment simultaneously.  Maps of the yield exclusion may be found at:


  1. What is the premium for different coverage levels?

Table 1 shows the subsidy percentage of different coverages, but keep in mind that the underlying rate goes up with the coverage level.  Table 2 shows an example of how base rates vary for non-irrigated soybeans in Bolivar county Mississippi.  For example the 85% coverage rate is 66% higher than 65% coverage.  This reflects much higher probability of loss as coverage increases.

Coverage Level

Rate differential



















  1. What about topping off individual coverage with SCO or STAX for cotton?

Supplemental Coverage Option (SCO) is companion policy with you underlying individual coverage that protects a portion of the deductible with and AREA triggered crop insurance layer of protection.  The coverage starts at 86% and goes down to the individual coverage chosen by the producer. You only purchase SCO if you do not participate in the FSA Agricultural Risk Coverage (ARC) program. You may be participating in FSA Price Loss Coverage. As shown in Table 1, the Federal Government pays 65 percent of the premium cost for SCO.

Stacked Income Protection Program (STAX) for cotton functions similarly to SCO, The expected revenue and actual revenue are based on county yields as determined by RMA.  The maximum coverage is 90% and the maximum range of payments is 90-70% of expected revenue.  With STAX you do not have to purchase individual-level coverage.

  1. What about separate coverage levels by practice?

The 2014 farm bill also allowed for separate coverage for an irrigated and non-irrigated practice. If you have both practices for a crop, you may select one coverage level for all irrigated acreage and one coverage level for all non-irrigated acreage. For example, you may choose a 75% coverage level for all irrigated acreage and 65% percent coverage level for all non-irrigated acreage.

  1. If you grow rice, ask about margin insurance

Margin Protection (MP) is an area based plan that provides producers with coverage against an unexpected decrease in their operating margin. The plan provides coverage that is based on the expected area revenue minus the expected area operating costs, for each applicable crop, type and practice. The margin protection plan can be purchased by itself, or with Yield Protection or Revenue Protection policy.  MP will be available in 2016 in select counties for corn, rice, soybeans, and spring wheat. In Mississippi MP will only be available for rice in 2016.