Ag Insurance Add-ons: A Complete Guide

To enhance their risk management protection, farmers and ranchers often bundle area/county‑based endorsements with their core Multi‑Peril Crop Insurance (MPCI) policies. Building off these core individual MPCI programs – Yield Protection (YP), Revenue Protection (RP/RP‑HPE), or Actual Production History (APH), – area/county-based plans are increasing protection, often at a reduced cost, helping producers rest easy when dark clouds are looming. Below are a few highlights of the some of the common area/county-based plans Texas producers are including in their risk management baskets.

1. Supplemental Coverage Option (SCO)

• What it is: Adds area/county‑level coverage between your individual policy’s coverage and 86% of area/county yield or revenue.
• How it works: Triggers when area/county performance falls below 86%, adding additional coverage, above your MPCI deductible.
• Eligibility: Requires underlying MPCI and participation in PLC (ARC election disqualifies acres).
• Subsidy: 65%
• Trigger timing: Paid in months following the release of official county yields, typically summer following the year the crop was harvested.

2. Enhanced Coverage Option (ECO)

• What it is: Extends coverage further – from 86% to 90% or 95% of area/county level – using area revenue or yield.
• How it works: Provides a band of area/county coverage from 95% (or 90%) down to 86%.
• Eligibility: Works with YP, RP, or APH. Available regardless of ARC/PLC election.
• Subsidy: 65% for YP/APH, and 56% for RP  
• Trigger timing: Paid in months following the release of official county yields, typically summer following the year the crop was harvested.

3. Stacked Income Protection Plan (STAX)

• What it is: Provides a band of area/county-based coverage from 70% to 90%. STAX is only available on cotton.
• Stand‑alone endorsement: Available separately or layered over cotton MPCI (YP, RP, RP‑HPE, or area policy).
• Eligibility: Cotton only; FSA base acre ARC/PLC enrollment disqualifies acres.
• Subsidy: 80%
• Trigger timing: Paid in months following the release of official county yields, typically summer following the year the crop was harvested.

4. Margin Coverage Option (MCO) – newly launched

MCO is a great alternative for operations looking to protect area/county-based harvest margins (revenue minus inputs).

Here is how it stacks up:

• Coverage goal: Protects against drops in area/county harvest margin (revenue minus specified input costs such as diesel, fertilizer, natural gas, potash, urea, DAP).
• Claim trigger: Payment made when actual margin falls below trigger margin – based on elected band (86‑90% or 86‑95%) minus deductible (5% or 10%).
• Coverage levels: Bands from 86% (or 90% with STAX) up to 90% or 95%, at area/county level.
• Eligible crops & regions:
  • Cotton in TX, OK and KS
  • Grain Sorghum in TX, OK and KS
  • Rice in TX, AR, CA, LA, MO and MS
• Sales deadline: September 30 (Rice varies)
• Bundling restrictions: Cannot be combined with Margin Protection (MP), ECO, or Hurricane Income Protection (HIP‑WI); adjustments apply with STAX.
• Trigger timing: Paid in months following the release of official county yields, typically summer following the year the crop was harvested.
• Subsidy: 65%

Choosing the Right Add‑Ons

When it comes to ag insurance, more isn’t always better. The goal is to strike the right balance – enough coverage to protect your operation without paying for more than you need. Some endorsements work well together, while others come with restrictions that need to be carefully navigated.

The best strategy starts with contacting an Agent at Texas Farm Credit who has a suite of risk management tools at their fingertips ready to work together in understanding your operation’s unique risks and goals, and help you select add-ons that complement your base policy. 

Next Steps

With the next sales deadline approaching September 30^th, now is the time to evaluate your options. These opportunities don’t come around often, and the right mix of coverage can make all the difference when the unexpected hits.

Contact a Texas Farm Credit Insurance Specialist today