By Andi Anderson
The USDA’s Risk Management Agency (RMA) raised the premium subsidy for ECO (Enhanced Coverage Option) crop insurance to 65% in 2025, up from previous rates of 44% and 51%.
This change has led to a major increase in adoption, with ECO use tripling compared to 2024. As of June 30, 2025, 23% of primary insured acres in nine major crops were enrolled in ECO, up from just 6% the year before.
ECO provides area-based revenue or yield coverage from 95% or 90% down to 86%. It can be used independently of SCO (Supplemental Coverage Option) and applies to farms enrolled in either ARC or PLC programs.
The rising popularity of ECO shows how responsive farmers are to higher subsidy rates.
SCO, which provides coverage from 86% down to a farmer’s chosen level on an individual policy, is also included in proposed House and Senate Reconciliation Farm Bills.
These bills recommend increasing the SCO subsidy from 65% to 80% and raising the coverage level to 90%. Experts expect SCO usage to rise even more than ECO as a result.
Meanwhile, cotton producers are shifting away from STAX (Stacked Income Protection Plan), which blocks enrollment in ARC or PLC. ECO allows this flexibility, especially for PLC, the preferred program for cotton growers. In fact, STAX coverage has dropped from 54% to 20% of insured cotton acres.
The data suggests that increasing subsidies for area-based insurance will raise federal spending. It also hints that Congress may move to simplify area insurance, much like it did with individual farm policies in 2011.
However, higher subsidies alone won’t fix existing differences in insurance performance between crops or regions. Riskier areas still benefit more in payouts. A broader review of crop insurance equity remains necessary.
Photo Credit: usda
Categories: Illinois, General