Modifications Announced for STAX Insurance Product in 2016

USDA’s Risk Management Agency (RMA) is making several modifications to the Stacked Income Protection Plan of insurance (STAX) for the 2016 crop year.

STAX was introduced as part of the 2014 Farm Bill to provide an additional insurance safety net for Upland cotton growers no longer covered under traditional commodity programs. It became official for the 2015 insurance year and was available in all counties where insurance for Upland cotton was available.

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Following implementation of the 2015 STAX program, Dr. Jody Campiche, NCC vice president, Economics and Policy Analysis, said the National Cotton Council made suggestions to RMA in response to comments from growers about potential STAX enhancements. “The Council appreciates the work done by RMA to implement these changes for 2016,” added Campiche.

The first modification allows growers to now select zero percent coverage based on production practice.

“For the 2015 crop year, growers didn’t have the flexibility to decide if they wanted STAX on irrigated acres versus non-irrigated acres,” explained Campiche. “They could make different choices on coverage levels for each, but they still had to have at least a minimum level for one or the other. This change means that growers can now get STAX at the coverage level they want for either irrigated or non-irrigated fields.

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“We had growers who were interested in that, because they didn’t want STAX for both or because the STAX expected yield for their area was not attractive. This gives them the flexibility to choose. They won’t owe premiums for the acres with zero percent coverage.”

The second change allows STAX coverage for growers in areas who can only secure cotton crop insurance through a written agreement.

“If growers are in a county where they need a written agreement policy in order to get an underlying insurance policy, they didn’t have the flexibility in 2015 to purchase a STAX policy,” said Campiche. “Now, they can.”

The final change adds STAX coverage for cottonseed in 2016 through an optional endorsement. For 2015, that endorsement could only be added to an underlying insurance policy.

For additional information on the STAX modifications, growers should visit the RMA website  or contact a local crop insurance agent.

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