The bill amends the Federal Crop Insurance Act to increase federal support for specific farm‑based revenue and yield insurance plans and to change parameters of the Supplemental Coverage Option (SCO). It creates a new statutory provision directing the Federal Crop Insurance Corporation (FCIC) to apply elevated premium‑support factors to individual farm‑based revenue protection and yield protection policies when producers elect enterprise or whole‑farm units.
The measure also adjusts SCO’s numeric thresholds and increases the federal share of SCO premiums, and it directs the FCIC to study the feasibility of offering coverage at an intermediate geographic scale for counties larger than 1,400 square miles. Together these changes alter producer incentives for unit choice, expand federal exposure to crop losses, and require FCIC to assess new unit designs for large counties.
At a Glance
What It Does
Adds a new paragraph to the premium‑support rules in the Federal Crop Insurance Act so that farm‑based revenue and yield policies elected on enterprise or whole‑farm units receive higher federal premium support. It revises the Supplemental Coverage Option’s statutory parameters and increases the federal subsidy for SCO premiums. The bill also mandates a feasibility study for a coverage unit larger than individual but smaller than county for very large counties.
Who It Affects
Producers who purchase individual farm‑based revenue protection or yield protection and choose enterprise or whole‑farm units; private crop insurers and agents who sell and service those products; and the USDA’s FCIC/Risk Management Agency, which administers and rates these policies. Federal program outlays and actuarial processes will also be directly affected.
Why It Matters
Changing premium support and SCO subsidy reshapes the economics of unit selection and uptake of supplemental coverage, potentially increasing program participation and federal liability. The required study signals possible future development of intermediate units, which would be a structural change to how area‑based risk is measured and priced for very large counties.
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What This Bill Actually Does
The bill makes three operational changes to federal crop insurance. First, it creates a specific statutory hook so that farm‑based revenue protection and yield protection policies chosen on enterprise units or whole‑farm units receive enhanced federal premium support.
That is a targeted change: it does not alter basic availability of those policies but changes who pays what share of the premium when certain unit structures are chosen.
Second, the bill changes how the Supplemental Coverage Option is configured. It reduces one numeric threshold in the statute and increases another, and it directs a much higher federal share of SCO premiums.
Practically, producers buying SCO will pay a smaller share of the SCO premium, and SCO will cover a slightly different slice of losses given the altered numeric parameters.Third, the FCIC must carry out (or contract out) a study that looks at whether an intermediate coverage unit — larger than an individual farm but smaller than a county — is workable in counties larger than 1,400 square miles. The study must consider feasibility and produce a report within a year.
That study is procedural but important: it is the statutory step toward any future new unit type, and it forces FCIC to confront data, mapping, and actuarial challenges required to price and administer such a product.Together, these changes are administrative and actuarial rather than program‑creation moves: they adjust subsidy formulas and SCO terms now, and they create a pathway to examine structural unit changes later. Implementation will require FCIC/RMA to modify premium‑setting procedures, update policy language, and, for the study, scope data‑collection and potential pilot needs.
The Five Things You Need to Know
The bill inserts a new paragraph (designated paragraph (8)) into 7 U.S.C. 1508(e) to create targeted premium support for certain plans.
When a producer elects an individual farm‑based revenue protection or yield protection policy on enterprise units or whole‑farm units, the bill sets the applicable federal premium factor at 77 percent for one coverage level and 68 percent for the other.
The Supplemental Coverage Option statutory language is amended to change one numeric threshold from 14 to 10 and to raise a coverage cap from 86 to 90, and the federal subsidy for SCO premiums is increased from 65 percent to 80 percent.
Section 522(c) of the Act (7 U.S.C. 1522(c)) gains a new subsection requiring the FCIC to study feasibility of offering coverage at a scale between individual and county for counties exceeding 1,400 square miles and to report results within one year.
The study can be performed by FCIC staff or contracted to qualified outside parties; the FCIC must include recommendations with the report to Congress.
Section-by-Section Breakdown
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Short title
Establishes the act’s formal name: the Federal Agriculture Risk Management Enhancement and Resilience Act of 2025, or the FARMER Act of 2025. This is purely identification language but signals the bill’s focus on risk management and resilience.
Targeted premium support for enterprise and whole‑farm unit elections
Adds a new paragraph that directs the Federal Crop Insurance Corporation to apply premium‑support rules to individual farm‑based revenue protection and yield protection plans when producers elect enterprise or whole‑farm units, but with higher 'applicable factor' levels than under current subparagraphs. Practically, this forces FCIC to change premium tables and billing so that producers choosing these units see lower out‑of‑pocket premiums and the FCIC covers a larger fraction federally. Insurers and RMA will need to implement rating changes, update policy forms and system logic, and communicate unit‑specific pricing to agents and insureds.
Adjusts SCO parameters and raises federal share of SCO premiums
Makes three connected edits to the SCO statutory text: it lowers one numeric threshold (striking '14' and inserting '10') and raises a coverage cap (from '86' to '90') and increases the federal subsidy percentage applied to SCO from 65% to 80%. Operationally, these edits change both how much SCO will pay at particular loss points and how much of the SCO premium is paid by the government versus the producer. RMA must revise actuarial documents, premium calculators, and enrollment materials; private insurers will collect smaller producer premiums and invoice FCIC for higher subsidy shares.
Study on intermediate‑scale coverage for very large counties
Directs FCIC to conduct or contract a study on the feasibility of offering a supplemental coverage option that applies to geographic units larger than an individual farm but smaller than a county in counties that exceed 1,400 square miles. The provision requires a report to the Senate and House agriculture committees within one year that includes results and recommendations. This section does not create a new product but creates the analytical basis necessary for FCIC to consider pilots or rulemaking to introduce intermediate units.
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Explore Agriculture in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Producers electing enterprise or whole‑farm units: They pay a smaller share of premiums for farm‑based revenue and yield protection when they choose these unit structures, improving cash‑flow and risk coverage economics.
- Producers purchasing Supplemental Coverage Option (SCO): The higher federal subsidy and altered SCO parameters reduce SCO out‑of‑pocket costs and change SCO’s effective coverage profile, making SCO more financially attractive.
- Large, diversified farms in very large counties: If the study leads to intermediate units, farms spanning sub‑county geographic variation could get area protection better aligned to their risk footprint.
Who Bears the Cost
- Federal government / taxpayers: Higher subsidy rates for both the targeted unit support and for SCO increase expected federal outlays and long‑term liability for crop insurance losses.
- FCIC/Risk Management Agency: RMA must revise actuarial schedules, systems, oversight, and potentially manage contracted studies — a nontrivial administrative and technical burden.
- Private crop‑insurance companies and agents: They must update pricing, enrollment processes, and policy forms; while they still collect fees, administrative and compliance costs will rise during implementation.
Key Issues
The Core Tension
The central dilemma is between strengthening farm financial resilience by lowering producers’ out‑of‑pocket costs and expanding federal exposure on one hand, and preserving actuarial soundness, fiscal sustainability, and market discipline on the other; the bill favors immediate producer support and study of new unit design at the cost of greater federal liability and increased implementation complexity.
The bill increases federal subsidy levels without specifying offsets or identifying new funding sources, which raises actuarial and budgetary questions. Higher subsidies change the distribution of risk between producers, insurers, and the federal backstop: producers face lower marginal costs for certain coverage choices, which tends to increase take‑up, while the federal government absorbs a larger share of downside losses.
That shift can undermine premium adequacy if actuarial rates are not rebalanced or if adverse selection concentrates higher‑risk policies under the enhanced subsidy rules.
The study requirement is a careful—but incomplete—step toward new unit types. A feasibility study can catalog technical barriers (data granularity, yield correlation across large areas, loss heterogeneity, reinsurance implications), but it does not itself commit FCIC to pilots, funding, or statutory authority to implement intermediate units.
The timeline—one year—may be short for robust actuarial modeling, and contracting the work to outside parties raises governance choices about methodology, data access, and transparency. Finally, changing SCO thresholds and subsidy percentages can interact with other federal programs and crop‑specific programs, creating layering of protections that may duplicate coverage or distort planting and management incentives in ways not resolved by the bill.
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