A bipartisan group of lawmakers has reintroduced legislation aimed at increasing federal subsidies for crop insurance premiums, with the stated goal of improving access to higher levels of coverage for farmers, according to a report from AM Best.

The proposed Federal Agriculture Risk Management Enhancement and Resilience, or FARMER, Act would raise government contributions to premiums under specific insurance plans.

Currently, the federal government covers 68% of premiums for policies offering up to 80% revenue or yield coverage and 53% for policies at the 85% coverage level. Under the bill, those subsidy rates would increase to 77% and 68%, respectively, according to an analysis released by Sen. John Hoeven, R-N.D., one of the bill’s sponsors.

These higher subsidies would apply only to enterprise and whole-farm insurance units. Enterprise units apply to a single crop across a county, while whole-farm units cover all commodities on a farm, according to the U.S. Department of Agriculture (USDA).

The bill also proposes changes to the Supplemental Coverage Option (SCO), which provides an additional layer of county-level coverage on top of a farmer’s individual policy. The legislation would raise the premium subsidy for SCO from 65% to 80% and increase the maximum coverage level from 86% to 90%. The USDA’s Risk Management Agency would be directed to evaluate how SCO functions in larger counties and identify areas for improvement.

Rep. Brad Finsta, R-Minn., another sponsor, said the proposal is intended to reduce the reliance on ad hoc disaster assistance by expanding access to more comprehensive insurance coverage.

The Senate version of the bill includes a provision to eliminate the current restriction that prevents farmers from purchasing certain enhanced crop insurance policies if they are enrolled in Agriculture Risk Coverage or Price Loss Coverage programs. Sen. Roger Marshall, R-Kan., said the change would give producers more flexibility in choosing coverage options suited to their operations.

The FARMER Act follows earlier efforts this year to modify the federal crop insurance system. In February, a separate Senate bill was introduced to add parametric insurance options, which pay out based on weather indexes or other measurable triggers rather than reported losses. Supporters of that measure argue it could offer faster and more targeted responses to increasingly frequent extreme weather events.

Source - https://www.insurancebusinessmag.com