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Figuring out options: More information about supplemental coverage coming
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news Dickinson, 58602
Dickinson North Dakota 1815 1st Street West 58602

Wheat, corn and soybean farmers soon should have access to information that will help them make an important one-time choice between two types of crop insurance, Sen. John Hoeven, R-N.D., said.

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He’s also optimistic the U.S. Department of Agriculture can provide similar information of particular value to producers of so-called minor crops by mid July.

The issue is the supplemental coverage option (SCO), which in turn affects agricultural risk coverage or price loss coverage.

The 2014 farm bill requires producers to pick either agricultural risk coverage, which protects against falling revenue, or price loss coverage, which provides payments when crop prices fall below levels set in the farm bill.

Farmers must choose carefully; once the decision is made, the producer is locked in for five years.

That decision is affected by the supplemental coverage option, which was created by the 2014 farm bill. The SCO provides area-based coverage to supplement the producer’s individual federal crop insurance coverage.

However, only crops enrolled in the price loss coverage program will be eligible for SCO; acreage planted to ag risk coverage will not.

“That enters into the decision,” said Dwight Aakre, a North Dakota State University Extension Service farm management specialist. “So far, we’ve had very little information. Once it’s available, though, you’ll be able to start taking a closer look at it.”

For now, it appears that farms with a substantial corn base might do better taking agricultural risk coverage, while farms that raise crops such as barley, canola and other minor oilseeds might do better with price loss coverage, he says.

“But it will vary from farm to farm,” Aakre said.

‘Making every effort’

The Risk Management Agency, the arm of the U.S. Department of Agriculture that administers the federal crop insurance program, says RMA is “making every effort to offer SCO to as many producers as possible. SCO will be available for corn, grain sorghum, rice, soybeans, spring wheat and winter wheat in selected counties for the 2015 crop year. Program details and eligible counties will be made available in the early summer of 2014.”

Hoeven said some farm groups and crop insurance companies have expressed concern that SCO might not be available for the 2015 crop year.

If it’s not, farmers would be handicapped in choosing between agricultural risk coverage and price loss coverage.

Hoeven said he’s pressed both USDA and RMA officials to offer SCO for as many crops and to as many producers as soon as possible.

Hoeven said he’s been told that SCO will be available for most major crops, including corn, wheat and soybeans, by the beginning of July, in most counties, with the emphasis on counties that are major producers of those crops.

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