How Does Supplemental Crop Insurance Work?

Photo by Kirsten Strough

Sales of the USDA Risk Management Agency’s Enhanced Coverage Option (ECO) crop insurance for corn surged over 325% last spring after the federal subsidy rose to 65% for the low-deductible insurance plan. ECO, along with Supplemental Coverage Option (SCO) and Margin Protection (MP), is part of the USDA’s suite of shallow-loss insurance products designed to protect producers as a supplement to standard revenue protection.

MP insurance helps farmers manage risks from lower yields, falling commodity prices, or rising input costs. Using early price discovery (August 15 to September 15), the USDA estimates costs versus revenue to determine coverage. Farmers choose 70 to 95% protection, with subsidies varying by level, while premiums can be costly due to extended time value.

ECO insurance, available since 2021 for corn and soybeans, provides 86 to 95% county-based revenue protection. It can trigger based on declining prices or yields. Farmers can enroll in ECO regardless of their Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) program choice.

SCO insurance offers farmers additional coverage above their base policy. It allows farmers to purchase an additional band of coverage, ranging from 86% down to the coverage level of their policy. According to the OBBBA, we should see an increase to 90% in 2027. Updated for 2026, premium subsidies will increase from 65% to 80%. Another change implemented in the OBBBA includes the option to choose SCO regardless of their ARC election with the FSA.