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Examining the Restriction on Using SCO Insurance for Acres in ARC

Author

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  • Zulauf, Carl
  • Coppess, Jonathan
  • Schnitkey, Gary
  • Paulson, Nick

Abstract

Current public versions of both the House and Senate farm bills increase the subsidy and coverage levels for SCO (Supplemental Coverage Option) insurance. SCO insurance can be purchased only for acres elected into PLC (Price Loss Coverage commodity program) (for a more complete discussion of SCO see the farmdoc daily of April 24, 2014 and August 7, 2024). SCO cannot be purchased for acres elected into both ARC (Agricultural Risk Coverage) commodity programs. A commonly-stated rationale for this restriction is a concern that payments by SCO and ARC will overlap. This analysis however finds that, in general, little relationship exists between per acre payments by SCO and ARC-CO (ARC county version), as for payments by SCO and PLC, for barley, corn, oats, peanuts, long and medium grain rice, Japonica rice, sorghum, soybeans, and wheat over the 2015-2022 crop years. This finding does not support current policy of allowing SCO insurance to be purchased for acres in PLC but not for acres in ARC-CO.

Suggested Citation

  • Zulauf, Carl & Coppess, Jonathan & Schnitkey, Gary & Paulson, Nick, 2025. "Examining the Restriction on Using SCO Insurance for Acres in ARC," farmdoc daily, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics, vol. 14(154).
    • Handle: RePEc:ags:illufd:358452
    DOI: 10.22004/ag.econ.358452
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