A new article, Measuring the Revenue Risk Reduction of Supplemental Crop Insurance Policies, co-authored by Francis Tsiboe (Program Leader at ARPC), Hunter Biram (University of Arkansas), and Amy Hagerman (Oklahoma State University Extension), analyzes how supplemental coverage options (SCO, ECO) interact with base policies such as Actual Production History (APH), Yield Protection (YP), and Revenue Protection (RP). Using national data from 2015 to 2023, the study evaluates their effects on farm income stability, premium costs, and regional outcomes.

Key findings include:

Adding SCO/ECO increased the likelihood of recovering weather-related revenue losses by 27.9% compared to farming without insurance.

Variability in farm revenue dropped nearly 50%, while downside risk fell by more than 80%.

Cotton, corn, and wheat producers experienced the highest reductions in revenue risk, with states like Arizona, Iowa, and Illinois surpassing 86% in protection.

Benefits were uneven across regions, with some states reporting risk reductions below 71%.

“Crop insurance continues to be a cornerstone of U.S. farm policy, especially as producers face greater income volatility from climate events,” said Francis Tsiboe, Program Leader at ARPC. “Our findings show that supplemental coverage options provide an important buffer against income shocks, but policymakers must also weigh affordability and equity across regions and crops.”

The full article is available at: https://southernagtoday.org/2025/09/11/measuring-the-revenue-risk-reduction-of-supplemental-crop-insurance-policies/

Media Contacts:
Francis Tsiboe – francis.tsiboe@ndsu.edu

Agricultural Risk Policy Center (ARPC)
North Dakota State University
www.ndsu.edu/agriculture/arpc