We expect a big crowd at the upcoming STAX/Farm Bill meetings on Nov 18th and 19th. In case you missed it, there was a Farm Bill passed earlier this year, and the implementation of it is finally starting to take place. There are many changes in the new farm bill that will be discussed, but most importantly the two new insurance options for cotton, SCO and STAX, will be discussed.
I will write in more detail on this later, but in brief STAX (Stacked Income Protection Plan) is an insurance policy only available for cotton that covers revenue from 70-90%. STAX is a county based program, therefore if your county revenue drops below 90% of expected county revenue, then a indemnity payment is triggered. SCO (Supplemental Coverage Option) is also a county based program that covers revenue from 86-75%. Similar to STAX, an SCO payment is triggered if revenue falls below 86% of expected county revenue. The two programs differ in that STAX is cotton only and does not require an underlying insurance policy. SCO requires and underlying insurance policy and is available to most covered commodities (corn, soybean, sorghum, peanuts) plus cotton. I think most folks would have loved for STAX and SCO to have been available this year (if Farm Bill would have passed in 2013) as it seems it would have helped with the current price decline.
Also, November 17th marks the first day for sigm-up for ARC/PLC under Title 1 of the Farm Bill. Don’t feel rushed into making a decision as the enrollment period is open until March 31, 2015. Again, I will write more on this later. Soon, be looking for an entire post or series of post on the Farm Bill and making sound decisions about Farm Bill programs.