Ag Policy Blog

RMA Readying Details on Spring Crops and SCO

By Chris Clayton , DTN Ag Policy Editor

USDA's Risk Management Agency could announce details for the spring-crop offering for the Supplemental Coverage Option as early as this week.

Early details about SCO coverage for spring crops will help farmers consider the options for commodity programs later this year or early in 2015.

Preparing for DTN's webinar on Thursday, I emailed RMA staff asking about SCO's winter-wheat offering and where SCO would be offered for spring crops. RMA had announced earlier this month that farmers in counties amounting to about 80% of winter-wheat production area would be eligible to buy the supplemental coverage. Farmers in about 20% of winter-wheat growing areas are excluded this year.

RMA stated, "SCO coverage for crops other than cotton (in 2015) will be based upon county yield data from NASS. Because of this, SCO is being offered where there is sufficient NASS data to establish a reliable county expected yield and premium rates. This approach, which follows what is done for currently-established area-based plans of insurance, was the most straight-forward and provided the best chance for quick implementation in the short time frame since the Farm Bill was enacted. The vast majority of each crop's production will be covered."

Some Kansas counties were not included in SCO due to lack of data necessary to run an area-based program. For example, some counties that do have individual policies but do not have SCO didn’t have any wheat information reported since 2007. Others were reported, but didn’t have enough acres in production to operate an area program.

While farmers will make a five-year decision locking in their commodity programs, RMA could offer SCO "in additional counties in subsequent years, using yield data reported to RMA by insured producers," the agency stated.

"RMA intends to expand availability for 2016, using yield data from insured producers. Availability for spring crops will likely be provided in the next few weeks."

The agency's spokesman also stated that RMA expects the SCO program will nearly the triple the number of counties offering an area-wide insurance plan.

"In this timeframe, RMA intends to provide maps that show SCO availability for spring crops. While details are still being finalized, these maps will clearly demonstrate that RMA is expanding to as many counties as possible as quickly as possible."

DTN's webinar on farm-bill choices will be held at 9 a.m., CDT on Thursday. Registration can be found at…

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