US Farmers Flock to ECO and SCO Area Add-On Insurance Amid 80% Subsidy Rate

The US Department of Agriculture's (USDA) risk management agency has reported a significant increase in area add-on insurance purchases by American farmers, particularly for Enhanced Coverage Option (ECO) and Supplemental Coverage Option (SCO) products.

Between 2024 and 2026, the number of acres insured under ECO-RP and SCO increased by 98 million and 53 million, respectively. This growth is attributed to an 80% federal premium subsidy rate for these products, introduced through administrative actions and the 2025 Farm Bill.

ECO-RP's share of Revenue Protection (RP) insured acres varies across crops, with corn having the highest share at 61%. The corn belt states of Illinois, Indiana, Iowa, Minnesota, and Ohio had at least 65% of their RP acres in ECO-RP for corn.

The growth in area add-on insurance has led to a $3 billion increase in federal premium subsidies. This trend is expected to continue, with some experts predicting a $30 billion increase in federal spending on crop insurance premium subsidies over the next 10 years.

Questions remain about the long-term impact of this trend on farmers' willingness to purchase add-on area insurance and the potential effects on crop practices and management.