Stage 2 Farmers Will Not Get More than Stage 1 Farmers

There is a perception that SDRP Stage 2 farmers will get more than Stage 1 farmers

Photo by KADM Creations on Unsplash

We continue to get feedback from farmers who received payments under Stage 1 that farmers who will collect payments under Stage 2 will likely receive a larger payment than Stage 1 farmers received.

The reality is that Stage 2 farmers who elected the same coverage level as a Stage 1 farmer will receive net/net less than a Stage 1 farmer. Remember that in order for a Stage 2 farmer to collect (assuming they obtained crop insurance) they just missed out on collecting an indemnity, therefore, their final yield as compared to APH would be higher than what a Stage 1 farmer would have.

It is likely easier to look at an example that we worked up. We assumed that both farmers had the same corn APH (225), the same coverage level (80%) and finally slightly different final yields. The Stage 1 farmer had a final harvest yield that was one bushel lower than the Stage 2 farmer. Here is the result: