Will Disaster Aid Penalize Farmers Who Elected Higher Coverage Levels

We continue to get comments about this topic

Photo by Ciprian Pardău on Unsplash

We continue to get comments along the lines of:

“I elected coverage at the 85% or higher level and those farmers who elected coverage at lower levels appear to be benefiting from the disaster aid. Is this correct?”

First, we believe that there will likely be some type of crop insurance premium rebate, so the issue primarily relates to the amount of benefit that farmers might receive.

Again, before we do the analysis, we must remember that USDA may not even use the same guidelines that was used in 2020/21, but let’s assume they do.

We worked up the estimated payments to be received for a farmer who either elected coverage at the 70% level or a farmer who elected coverage at the 85% level.