Understanding Cotton Producer’s Crop Insurance Choices Under the 2014 Farm Bill

The 2014 Farm Bill adds the Stacked Income Protection Plan (STAX) and the Supplemental Coverage Option (SCO) to the suite of insurance choices for producers in 2015. Unlike other crops with the ARC and PLC programs, cotton only has access to crop insurance under the new Farm Bill. Therefore, the crop insurance choices that farmers make will constitute the only government safety net for farm income. The overall objective of this research is to understand the impact of the new crop insurance policy options for cotton on farmer decisions regarding risk management strategies. A mail survey was conducted in February 2015, at the time when farmers were making insurance purchase decisions. Our results suggest that cotton farmers are taking benefits of 2014 Farm Bill, which enables them to take separate dry land and irrigated insurance policies