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.
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.
Purchase Considerations
STAX may be purchased as a Standalone policy or in conjunction with another policy referred to as a “companion policy." Companion policies may include Yield Protection (YP), Revenue Protection (RP), Revenue Protection with the Harvest Price Exclusion (RP-HPE), and any of the Area Risk Protection Insurance policies. The companion policy must be written with the same Approved Insurance Provider (AIP).
- You may also purchase STAX if your farm is covered under the Whole Farm Revenue Protection (WFRP) policy.
- The Federal government will pay 80% of the premium cost for STAX.
- STAX is available in all counties where Federal crop insurance coverage for upland cotton is offered.
- Final area yields will be determined on or before August 1 following the crop year.
- If the grower elects STAX and the Supplemental Coverage Option (SCO) on or before the STAX Sales Closing Date (SCD), the insured must designate which acres of upland cotton in the county will be covered by STAX and which acres will be covered by SCO. Please refer to the STAX Handbook for more details.
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. The Farm Service Agency (FSA) permits enrollment updates until September 30. However, the Risk Management Agency (RMA) will use the grower's selection as of April 15 for STAX coverage.
To be eligible for the STAX Cottonseed Endorsement (STAX-SE) *, the insured must:
- Have the STAX cotton lint policy.
- Have elected the STAX Cottonseed Endorsement by the SCD.
- Cover all planted acreage of the crop in the county insured by the STAX cotton lint policy.
* The STAX Cottonseed Endorsement is only available where specified in the actuarial documents.
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