Crop Insurance, 2025 Farm Bill, and Mission Creep
The modern US crop insurance program has undergone substantial mission creep since its creation by the Federal Crop Insurance Act of 1980. Coverage levels, Federal premium subsidy rates, and types of risk covered have all increased. Of particular note, the offering of ECO insurance starting with the 2021 crop year and the 2025 Farm Bill increase in SCO coverage to 90% with an 80% subsidy rate point to crop insurance policy entering a new chapter: publicly subsidized management of price risk.
Response to the Increase in 2025 Crop ECO Premium Subsidy
Although early in the reporting period for 2025 crop insurance decisions by farmers, use of ECO (Enhanced Coverage Option) insurance has tripled vs 2024. The key change from 2024 is an increase in ECO premium subsidy implemented by USDA, RMA. ECO subsidy rate is now 65% compared to the prior rates of 44% when ECO was combined with individual farm revenue coverage and 51% when combined with individual farm yield coverage.
Dramatic Difference in Expected Yields between Corn, Soybeans, and Cotton for Area-Based Insurance Products
Both the House and Senate Reconciliation Bills include provisions to encourage the purchase of the Supplemental Coverage Option (SCO). Since 2015 when SCO was first offered, actual county-level yields of corn and soybeans in the Midwest have been above expected yields in most years, implying a continuation of historical increases in yield and lower expectations for indemnities. On the other hand, actual county-level yields have been below expected yields for the majority of years for cotton.

The farmdoc Crop Insurance section offers iFARM online tools including the Premium Calculator, Payment Evaluator and Price Distribution Tool. These tools are updated annually during the Spring crop insurance election period.