Stacked Income Protection Plan for Upland Cotton
Stacked Income Protection Plan for Upland Cotton (STAX) is a crop insurance product for upland cotton that provides coverage for a portion of the expected revenue for the area the upland cotton is produced. Most often the area will be the county, but it may include other counties or even practices as necessary to obtain a substantial amount of data to establish an expected yield and premium rate. STAX may be purchased on its own, or in conjunction with another policy, also known as a “companion policy.”
The Federal government will pay for 80 percent of the premium cost for STAX. This plan provides coverage for up to 20 percent of the expected area revenue in increments of 5, 10, 15 or 20 percent.
Loss payments begin when area revenue falls below 90 percent of its expected level – although a lower area loss trigger may be selected. Loss payments reach their maximum when area revenue falls to 70 percent of its expected level – unless the companion policy has a coverage level above 70 percent 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.
This information is intended for informational purposes only. Nothing contained herein can or should be interpreted to take precedence over policy language, Federal Crop Insurance Corporation/Risk Management Agency regulation, and Underwriting or Loss Adjustment rules.