Crop Insurance Impacts from the One Big Beautiful Bill Act
On July 4, 2025, lawmakers passed the One Big Beautiful Bill Act (OBBBA), making changes to the Federal Crop Insurance Act that directly affects farmers. Crop insurance is an essential way to mitigate risk and is utilized as a safety net for many producers. The One Big Beautiful Bill Act included important updates and improvements to strengthen crop insurance programs, including the expansion of beginning farmer and rancher benefits, increasing coverage options, and higher premium support.
Below, we’ve summarized these updates to help you understand how your operations may be impacted in the coming year.
Beginning Farmer or Rancher (BFR) Benefit – Section 10501
One significant change was the expansion of the USDA beginning farmer and rancher (BFR) definition from five to 10 years of experience. In addition to the current extra 10% premium subsidy rate, those who qualify as BFR will receive an additional 5% premium subsidy rate for the first two crop years, 3% premium subsidy rate the third year, and an additional 1% premium subsidy rate the fourth year. This BFR expansion will increase premium support and allow more producers to qualify for this benefit, and for a longer period.
Increased Coverage Options – Section 10502
Another impact of the bill was the premium subsidy rate increase from 65% to 80% for numerous Area-Based Coverage Options popular to our region. Supplemental Coverage Option (SCO), Enhanced Coverage Option (ECO) and Hurricane Insurance Protection Wind Index (HIP-WI) will all have the increased subsidy applied. These area-based crop insurance coverages provide additional coverage for a portion of an insureds underlying crop insurance policy deductible, essentially, allowing an insured to insure up to 95% of the value of their crop.
However, different from an underlying policy which is based on actual production history, SCO, ECO and HIP-WI pay a loss on an area basis, meaning that indemnity is triggered when there is a county level loss. Previously, SCO was only available to farmers enrolled in Price Loss Coverage (PLC) with the Farm Service Agency (FSA). However, farmers can now purchase SCO even if Area Risk Coverage (ARC) is elected, creating much higher flexibility in purchasing these additional coverages, allowing ECO and SCO to be more accessible and affordable to producers.
Premium Support – Section 10504
The OBBBA also increased premium subsidy rates for the various coverage levels and unit elections for policies that follow the Common Crop Insurance Policy, Basic Provisions (CCIP). The Basic Unit and Optional Unit subsidy rates increased by 3% to 5% across coverage levels, providing a major benefit to farmers.
Poultry Insurance Pilot Program – Section 10507
Finally, this bill initiated a Poultry Insurance Pilot Program for contract poultry growers, allowing them to mitigate their production risk. Contract poultry growers can elect to receive index-based insurance to cover utility costs caused by extreme weather. These utility costs can include gas, electricity, and water costs. This program will be piloted in top poultry-producing states, with more to come in the future.
Overall, the One Big Beautiful Bill Act has greatly improved crop insurance coverage for farmers nationwide. Crop insurance helps farmers manage both market and weather-related risks and offers certainty for farmers in a very unknown world. The benefits from this bill are effective now for all crops with sales closing dates on or after July 1, 2025. If you have any questions about these coverage options and how these changes could benefit your operation, please reach out to one of our agents at 888.339.3334.
Sources:
https://www.fb.org/market-intel/one-big-beautiful-bill-act-final-agricultural-provisions
https://www.calt.iastate.edu/post/reviewing-agricultural-provisions-one-big-beautiful-bill-act