Ag Policy Blog

The Risk Management Agency has laid out some of the enhancements to crop insurance, citing the "rapid implementation" of those provisions following the passage of the One Big Beautiful Bill Act. Among the bigger changes are reduced premium subsidies for farmers with ten or fewer crop years under their belt.

"In record time, RMA has delivered these transformative changes, demonstrating the Trump administration's unwavering commitment to putting American farmers first by expanding benefits for beginning farmers and ranchers, increasing coverage options, and making crop insurance more affordable and accessible across multiple insurance programs."

POLICY CHANGES FOR BEGINNING FARMERS

Farmers who have not actively operated or managed a farm or ranch for more than ten crop years qualify for higher premium subsidies under the insurance changes made in the legislation.

Beginning farmers were already receiving a 10% benefit when it comes to premium subsidies. The legislation added some improvements such as 5% for two years; 3% for the third year; and 1% in year four.

With the added policy improvements, premium benefits for beginning farmers include:

-15% additional premium subsidy for the first two crop years

-13% in third crop year

-11% in fourth crop year

-10% for years five through ten

OTHER COVERAGE CHANGES

The legislation also includes premium reductions and policy improvements for some area-based coverage plans.

-Whole Farm Revenue Protection (WFRP) coverage levels increase from 85% to 90%. The 90% coverage will have the same premium subsidy as the 85% coverage level.

-Supplemental Coverage Option (SCO) premium subsidies are increased from 65% to 80%. Also, farmers can buy SCO regardless of whether they select Agricultural Risk Coverage (ARC) or Price Loss Coverage (PLC). In 2027, SCO also will increase to 90% coverage levels.

-Enhanced Coverage Option (ECO), Margin Coverage Option (MCO), Hurricane Insurance Protection Wind Index (HIP-WI), and Fire Insurance Protection Smoke Index (FIP-SI) will also have 80% premium subsidies. ECO also will see coverage levels go to 90% in 2026.

USDA stated the changes in policy coverages will be effective for all crops with sales closing on or after July 1, 2025.

"RMA is committed to implementing these changes before upcoming sales closing dates so that producers can make fully informed decisions about their risk management strategies," said Pat Swanson, RMA's administrator. "We've moved quickly to put American farmers first, ensuring they have the protection they need when unavoidable natural disasters occur. We encourage all producers to work with their crop insurance agent to understand how these historic changes will benefit their operations."

For more information, check with your agent.

Go to www.rma.usda.gov

Chris Clayton can be reached at Chris.Clayton@dtn.com

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