Stacked Income Protection Plan (STAX)

Stacked Income Protection Program (STAX)

The Stacked Income Protection Plan (STAX) is a crop insurance product for upland cotton that provides coverage for a portion of the expected revenue for your area. Most often your area will be your county, however, your area may include other counties or even practices as necessary to obtain a credible amount of data to establish an expected yield and premium rate.

STAX may be purchased on its own, or in conjunction with another policy referred to as a “companion policy". Companion policies may include Yield Protection, Revenue Protection, Revenue Protection with the Harvest Price Exclusion, and any of the Area Risk Protection Insurance policies. You may also purchase STAX if your farm is covered under the Whole Farm Revenue Protection (WFRP) policy. The Federal government will pay for 80% of the premium cost for STAX.

STAX is available in all counties where Federal crop insurance coverage for upland cotton is offered.

How does STAX work?

STAX provides coverage for up to 20% of the expected area revenue in increments of 5, 10, 15, or 20 percent. Loss payments begin when area revenue falls below 90% of its expected level –although a lower loss trigger may be selected. Loss payments reach their maximum when area revenue falls to 70% of its expected level –unless your companion policy has a coverage level above 70% in which case payments end sooner. Like other area plans of insurance, the amount of coverage may also be increased or decreased by selection of a protection factor so that growers may better tailor their coverage to their risks.

The amount of STAX coverage depends on the expected yield, projected price, coverage range, and protection factor. The expected yield for STAX will be based on the historical average of yields in the county reported to RMA by insured growers. In areas where the yield data are thin, counties will be combined in order to accumulate enough data to determine expected yields and premium rates. STAX pays a loss based on an area-wide basis. An indemnity is triggered when there is an area loss in revenue.

Important Note: Enrolling a farm in seed cotton Agricultural Risk Coverage (ARC) or Price Loss Coverage (PLC) makes the farm’s seed cotton or upland cotton ineligible for STAX coverage. Per Product Management Bulletin 21-068: Crop Policy Provisions have been updated to provide a set date of March 15, for determining enrollment status in ARC or PLC, for STAX insurability purposes.