Ag Policy Blog

USDA Says SCO Insurance is Ready for 2015 Crops

By Chris Clayton , DTN Ag Policy Editor

USDA announced on Tuesday where farmers growing winter wheat would be eligible to buy the new Supplemental Coverage Option crop insurance this fall.

SCO, created in the 2014 farm bill, is a supplemental county insurance that could cover a portion of a farmer's deductible revenue on a countywide plan. A farmer buys the insurance as an enhancement to an individual policy.

Winter wheat farmers would effectively be the first ones who get the option of buying SCO for their 2015 crop. However, not every winter wheat farmer will get the option of buying the policy. Farmers in counties reflecting about 80% of the overall winter wheat acreage would get the option of enrolling. Almost all of Kansas, excluding a couple of counties, would be able to enroll, as would farmers in the western half of Oklahoma, southern and western Nebraska, parts of South Dakota, Colorado Montana, Idaho, Oregon and Washington State would get to enroll, as well as farmers in sections of California, Arkansas, Missouri, Illinois, Ohio, Michigan and Wisconsin as well as a few counties in both North and South Carolina, New Mexico, Wyoming, New York and Pennsylvania. For a full map, go to http://dld.bz/…

USDA will come out with another map later this year or early next spring showing where SCO can be purchased for other spring commodities.

SCO pays when county revenue falls below 86% of its expected level. SCO would then pay out until the individual coverage level of an insurance policy kicks in. A fact sheet can be found at http://dld.bz/…

Under SCO, the federal government also pays 65% of the premium.

SCO also in integrated into a farmer's decision to enroll in commodity programs. SCO can be used only on commodities not enrolled in the Agricultural Risk Coverage program, largely because SCO and ARC function in the same way. Commodities signed up for Price Loss Coverage would be eligible for SCO insurance.

The deadline for winter wheat farmers to sign up for SCO coverage is Sept. 30. However, it's unlikely that USDA will have rolled out sign up for ARC and PLC by then. USDA will give winter wheat farmers a grace period until Dec. 15 to withdraw coverage from any farm if they elect to enroll those acres in ARC for winter wheat. If they drop SCO after Dec. 15, farmers would have to pay the premium on the insurance.

Follow me on Twitter @ChrisClaytonDTN.

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