The Federal Crop Insurance Corporation Board of Directors met May 23 and approved an increase in the subsidy rate growers will receive when purchasing the Enhanced Coverage Option (ECO). This change will come into effect with the 2025 insurance year, which begins with policies sold after July 1, 2024.
With the change ECO will now receive a 65 percent premium subsidy rate – an increase of 21 percentage points from the endorsement’s current 44 percent level.
The change, which is effective regardless of the outcome of current farm bill discussions, brings the ECO endorsement subsidy to the same level as the existing subsidy rate provided for the Supplemental Coverage Option (SCO) endorsement. The higher ECO subsidy level could increase interest in ECO among producers by reducing the cost of the coverage.
ECO is a companion policy that can provide additional countybased shallow-loss coverage on top of the coverage provided by an underlying multi-peril revenue or yield policy and/or a Supplemental Coverage Option (SCO) endorsement. ECO protection can be selected to cover losses beginning at 90% or 95% of a county’s expected revenue for the insured crop.
The ECO endorsement cannot be purchased when a producer buys the Stacked Income Protection Plan (STAX) on cotton. Since ECO does not provide coverage that overlaps the protection provided by the USDA FSA Agriculture Risk Coverage (ARC) program, a grower may participate in ECO and ARC simultaneously as long as they have not also purchased an SCO endorsement.