New for 2025: Premium is 65% Subsidized
Starting for the crop year of 2025, Enhanced Coverage Option (ECO) will have an increased subsidy making it a great option for farmers. The subsidy has been increased to 65%. This is a 21% increase from 2024. Holding all other factors constant, the subsidy increase results in a significant cost reduction for the producer to get this excellent risk management tool.
ECO is a top-layer protection. It is supplemental insurance that offers farmers an extra layer of protection against crop losses. This endorsement provides insurance coverage to a previous gap on the top end of county revenue losses that can’t be covered any other way in the federal program. ECO is an area-based plan.
Crop insurance can be thought of in tiers. The base tier is the Multiple Peril Crop Insurance (MPCI). This tier has the choice of coverages such as Revenue Protection and Yield Protection. The next tier will cover up where the MPCI coverage ends up to 86% of losses.
Enhanced Coverage Option covers 86% to either 90% or 95% of county revenue, depending on which level of coverage the grower selects.
The higher subsidy level should encourage more farmers to explore ECO as part of their overall risk management strategy. With the enhanced subsidy, the cost of securing higher levels of coverage is reduced, offering a broader safety net against adverse weather conditions, price fluctuations, and other covered perils. This change makes ECO a more cost-effective option and helps farmers better protect their investments and livelihoods. This is also a great change for producers who have already been using ECO to protect their operation. They will now get the same policy at a lower premium cost.
Precision Risk Management has seen great results for producers who chose ECO in the last couple of years. The PRM team examined how ECO helped protect against lower commodity prices in this article. You can read more about how an ECO policy would protect your operation here.
Each farm operation is unique, with specific needs and risk profiles. PRM Risk Management Advisors can help you determine whether ECO is the right fit for your operation, considering factors like your crop mix, financial goals, and risk tolerance. They will work with you to analyze historical price movements, current market trends, and provide a county-specific quote. ECO is not a right fit for all operations but it is important to make sure you know how it could protect your operation in a detailed analysis.
