Prevented Planting Buy-Up Coverage: Payments and Policy Changes

Rwit Chakravorty, Dylan Turner and Francis Tsiboe

No 386094, ARPC Brief from North Dakota State University

Abstract: Prevented planting (PP) coverage has historically allowed crop insurance participants to receive indemnities when weather or other insured causes prevent timely planting, with an optional buy-up provision increasing payments by covering a larger share of pre-planting costs. On November 28, 2025, the USDA Risk Management Agency eliminated the 5 percent prevented planting buy-up option from all crop insurance policies. Using USDA Risk Management Agency cause-of-loss data, we document the distribution of PP buy-up indemnities across major crops and states and estimate the portion of recent indemnities that is “at risk” following the removal of the buy-up option. Results show that corn and rice account for the largest share of buy-up-related indemnities, with significant geographic concentration in the Dakotas, Arkansas, and California. A counterfactual analysis of the earlier reduction in buy-up coverage from 10 percent to 5 percent in 2018 demonstrates that prior policy changes already resulted in substantial foregone indemnities, particularly for corn and rice. Together, these findings provide context for the scale and distributional consequences of eliminating prevented planting buy-up coverage and inform expectations regarding future producer payments and program expenditures.

Keywords: Agricultural and Food Policy; Crop Production/Industries; Farm Management (search for similar items in EconPapers)
Date: 2025-12-23
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Persistent link: https://EconPapers.repec.org/RePEc:ags:arpcbr:386094

DOI: 10.22004/ag.econ.386094

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