Documents & Presentations by Chandan Bhattarai
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Estimated Net Returns to Supplemental Coverage Option Participation Before and After OBBBA changes
Link to SCO Expected Net Indemnity Payments Map : https://agmanager.info/crop-insurance/crop-insurance-papers-and-informat... |
September 4, 2025 |
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SCO Expected Net Indemnity Payments Map
Link to article: https://www.agmanager.info/crop-insurance/crop-insurance-papers-and-info... This study estimates how the Supplemental Coverage Option (SCO) performs with and without the changes to subsidies and coverage levels in the One Big Beautiful Bill Act (OBBBA). We calculate “net indemnities” (payments minus farmer-paid premiums) using 2025 crop prices and premium rates, combined with historic county yield data. By averaging across many possible yield outcomes, we estimate the long-term value of SCO under both the old and new rules. For corn, soybeans, and wheat, expected SCO net indemnities increase by 63–70% with the OBBBA changes. In short, the new law makes SCO more valuable to farmers by lowering their costs and increasing the likelihood and size of payments. Other considerations not analyzed in this study include premium costs and farm-level risk reduction.
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September 2, 2025 |