WASHINGTON, Aug. 13, 2014-- USDA’s Risk Management Agency (RMA) Administrator Brandon Willis expects information about the Stacked Income Protection Plan (STAX) for cotton producers and the Supplemental Coverage Option (SCO) to be available to producers in time for the 2015 crop year. 

RMA announced this week that STAX will be available to upland cotton producers through the federal crop insurance program beginning with the 2015 crop year. The program is one of the new risk management options included in the 2014 Farm Bill.

For the 2015 crop year, STAX will be available for upland cotton in all counties where federal crop insurance coverage for upland cotton is currently offered, which means it will cover 98 percent of cotton production.

“To have all those counties covered speaks a lot to the implementation,” Willis said.

He added that the 2014 Farm Bill authorized RMA to use its own data, because the agency typically uses National Agricultural Statistics Service data. He said STAX is the first major program where RMA has used its own data, and it’s “why we’ve been able to cover so many counties.”

STAX is an area-based revenue policy that may be purchased on its own, or in conjunction with another companion upland cotton crop insurance policy, USDA noted in its announcement. The program may begin paying when revenue drops below 90 percent of the expected revenue for the area and a full indemnity may be payable when area revenue falls below 70 percent of the expected level. The amount of actual coverage and indemnity will depend on a producer's choice of a trigger yield, coverage range and other elections made under the STAX policy.

According to USDA staff, STAX sign-up will be similar to those for producers’ underlying cotton policies. Depending on the region, RMA expects sign-up to occur in January, February and March.

“Cotton growers appreciate having information out this time of year,” Willis said. “It allows producers to become educated on STAX.”

Until STAX is available, USDA's Farm Service Agency (FSA) will accept enrollment for the Cotton Transition Assistance Program (CTAP) through Oct. 7, 2014, to provide interim payments to cotton producers during the 2014 crop year.

CTAP applications approved before Oct. 1 are subject to congressionally mandated automatic reductions of 7.2 percent for the 2014 crop year, and applications approved after Oct. 1 will be reduced by the required 7.3 percent for the 2015 crop year. These reductions to program payments are required under the Budget Control Act of 2011.

Supplemental Coverage Option


Willis said RMA will be releasing more information about SCO within the month. 

The farm bill requires SCO to be made available beginning with the 2015 crop year. Crops on a farm enrolled in the Agricultural Risk Coverage (ARC) program will not be eligible for SCO coverage. However, a crop on a farm may be enrolled in both SCO and Price Loss Coverage (PLC). Both ARC and PLC are administered by FSA. 

According to RMA, SCO will be available for corn, cotton, grain sorghum, rice, soybeans, spring wheat, and winter wheat in selected counties for the 2015 crop year. Willis said information for spring crops should be available within the month. 

At end of July, RMA released information on SCO for 2015 winter and spring wheat. Producers applying for SCO for the 2015 winter wheat crop may withdraw coverage on any farm where they have elected, or where they intend to elect, ARC for winter wheat by the earlier of their acreage reporting date or Dec. 15, without penalty.

USDA said this would give producers time to make the required decision to participate in either the ARC or PLC programs for their winter wheat.

If producers withdraw SCO coverage for a farm before their acreage reporting date or Dec. 15, 2014 they will not be charged a crop insurance premium. In order to withdraw coverage without penalty, producers must notify their agents of their intended election for ARC by the earlier of their winter wheat acreage reporting date or Dec. 15, 2014. A list of crop insurance agents is available at all USDA Service Centers throughout the United States or on the RMA website: at www3.rma.usda.gov/tools/agents


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