§1508b Stacked Income Protection Plan for producers of upland cotton

Summary

Starting with the 2015 upland cotton crop, the Corporation must offer a new insurance option called the Stacked Income Protection Plan (SIPP). It is like the Group Risk Income Protection plan and its Harvest Revenue Option from 2011. SIPP covers county revenue losses from 10% to 30% of expected county revenue, in 5% steps. The deductible is the smallest percent that triggers a payment and cannot be under 10%. It should be offered in all cotton-producing counties using county data when possible or a larger area if needed. You can buy SIPP by itself or with other coverage, but if you already have individual or area coverage on the same acres, SIPP’s maximum payout cannot exceed that other coverage’s deductible. SIPP uses the expected price from existing area plans and an expected county yield that is the higher of the area-plan yield or a 5-year average excluding the highest and lowest year (using RMA or NASS data or other data if needed). A protection factor of at least 120% (or the higher program-wide level) sets per-acre protection. Payments equal the shortfall between expected and actual county revenue and do not cover the chosen deductible. Irrigated and nonirrigated acres can have separate levels where data exist. Premiums must cover expected losses, a reserve, and admin costs. For qualifying levels, the Corporation pays 80% of the premium plus the admin amount. From the 2019 crop year, a farm cannot use SIPP for upland cotton if it is enrolled for seed cotton under price loss coverage or agriculture risk coverage.