§1508b Stacked Income Protection Plan for Producers of Upland Cotton

Summary

The Corporation must offer a new insurance option for upland cotton called the Stacked Income Protection Plan starting no later than the 2015 crop. The plan must pay for county-level revenue losses between 10% and 30% of expected county revenue, chosen in 5% steps, with the deductible equal to the lowest chosen percentage and never less than 10%. It must be sold to upland cotton growers in all counties, using county data when possible or a larger area if a county lacks data. Farmers can buy it alone or with other individual or area policies, but if they already have coverage for the same acres, the SIPP payment cannot exceed that other policy’s deductible. The plan 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 trimmed average (drop highest and lowest). A multiplier (protection factor) sets maximum per-acre protection and must be at least the higher of a program-wide level or 120%. Payments equal the shortfall between expected and actual county revenue applied to the producer’s selected coverage, and irrigated and nonirrigated acres must have separate levels where data exist. The premium must cover expected losses, a reasonable reserve, and include an amount for operating and administrative costs set by law. The Corporation must pay 80% of the premium for qualifying coverage levels and pay the allowed amount for administrative and operating expenses. The SIPP is in addition to other available coverages. Starting with the 2019 crop year, a farm cannot get SIPP for upland cotton if the farm is enrolled for seed cotton in price loss coverage under section 9016 or agriculture risk coverage under section 9017.