Use of Supplemental Coverage Option by Crop

Carl Zulauf, Nick Paulson, Jonathan Coppess and Gary Schnitkey

farmdoc daily, 2025, vol. 14, issue 146

Abstract: Current public versions of both the House and Senate farm bills increase the subsidy and coverage levels for SCO (Supplemental Coverage Option) insurance. This article therefore examines the use of SCO for the large acreage field crops of barley, corn, grain sorghum, peanuts, rice, soybeans, and wheat (see Data Note 1). Use of SCO has increased since its implementation in the 2015 crop year. During 2021-2023, use of SCO was relatively highest for peanuts and rice and relatively lowest for corn, soybeans, and grain sorghum. Assuming current use indicates future use, SCO enhancements will likely benefit crops associated with the Southern US relatively more and crops associated with the Midwestern US relatively less. These differential relative benefits are consistent with SCO’s design that (a) makes SCO’s value relatively higher for crops with the lowest individual farm insurance coverage and (b) with its restriction that limits the use of SCO to land enrolled in the PLC (Price Loss Coverage) commodity program.

Keywords: Agribusiness; Agricultural Policy; Crop Insurance; Farm Program Analysis and Outlook (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:illufd:358460

DOI: 10.22004/ag.econ.358460

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