FARMER Act Boosts Crop Insurance Subsidies to 80%, Cutting Costs for Farmers Using Whole-Farm Plans

The Federal Agriculture Risk Management Enhancement and Resilience Act, or the FARMER Act, is all about adjusting the dials on federal crop insurance to make specific, broader coverage plans more attractive and affordable for farmers. Essentially, this bill is a targeted financial tune-up for how the government helps shoulder the risk in agriculture.

The Whole-Farm Discount: Making Big Coverage Cheaper

Section 2 of the FARMER Act tackles the premium support farmers receive when they choose larger, more comprehensive insurance plans. Right now, many farmers insure individual fields or crops separately, but the trend has been toward “enterprise unit” or “whole farm unit” coverage. These broader policies cover a farmer’s entire operation, which can simplify things and potentially encourage diversification. The problem is that the subsidies for these plans can sometimes be less clear.

This bill locks in specific subsidy rates for these enterprise and whole-farm plans. For one coverage level, the subsidy factor is set firmly at 77 percent, and for another, it’s set at 68 percent (Section 2). What does this mean in plain English? If you're a farmer using one of these comprehensive policies, the government is guaranteeing it will cover these specific percentages of your premium. This provides certainty and a clear financial incentive to use these broader risk management tools, which often benefit larger, more diversified operations.

Supplemental Coverage Gets a Major Premium Boost

Section 3 is where the biggest financial change for many farmers happens. It deals with the Supplemental Coverage Option (SCO), which is an insurance product designed to cover a portion of a farmer’s deductible. Think of it as gap coverage. Currently, the government covers 65% of the premium cost for this SCO.

The FARMER Act raises that federal subsidy rate significantly, moving it from 65% up to 80% (Section 3). For a farmer who relies on this SCO, this means a substantial reduction in their out-of-pocket costs for that extra layer of protection. This is a direct financial benefit to participating farmers, making risk management cheaper and more accessible. Section 3 also tweaks the coverage limits for this SCO, lowering one threshold from 14 to 10 and raising another from 86 to 90, which adjusts the maximum level of coverage available.

Mapping the Future of Farm Insurance

Finally, Section 4 directs the Federal Crop Insurance Corporation (FCIC) to hit the books and conduct a study. The FCIC needs to look at whether it’s feasible to expand the geographic limits of that Supplemental Coverage Option (SCO) (Section 4). Currently, the SCO is often limited to smaller areas.

The FCIC must study whether the SCO can be adjusted to cover areas larger than 1,400 square miles, but still less than county-wide coverage. They have one year to report their findings and recommendations to Congress. This is basically a mandate to explore how to offer more flexible, localized risk management options that could better suit the needs of farmers in areas that don't fit the typical county-wide coverage model.