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Cotton Producers Have Crop Insurance Options for the 2019 Crop Year

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 year.
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 for SEED COTTON through USDA FSA.
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.
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