A new white paper from the Agricultural Risk Policy Center (ARPC) at North Dakota State University analyzes the economic and risk management consequences of eliminating the remaining 5% prevented planting (PP) buy-up option under USDA’s Expanding Access to Risk Protection (EARP) rule, effective beginning with the 2027 crop year.

The paper, Prevented Planting Buy-Up Elimination and What the Evidence Indicates about Adoption, Actuarial Performance, and Pre-Planting Risk Management Options for Farmers (ARPC White Paper 2026–02), authored by Dr. Francis Tsiboe, Dr. Rwit Chakravorty, Dylan Turner, Shawn Arita, and Hongxi Zhao, synthesizes a series of ARPC analyses using USDA Risk Management Agency data from 2011–2024. The study evaluates actuarial performance, producer adjustment behavior, distributional exposure, and the costs of replacing lost PP protection through higher coverage levels.

The findings show that PP buy-up coverage was actuarially sound at the national level, with loss ratios closely aligned to base-only policies and no evidence of systematic adverse selection. Despite this, eliminating the buy-up removes a targeted risk management tool that allowed producers to adjust planting-season protection independently of broader coverage decisions.

The analysis also documents that producer losses from buy-up elimination are economically meaningful and geographically concentrated. For indemnified acres, losses average $18–26 per corn acre and $14–21 per soybean acre in the absence of ad-hoc relief. While recent disaster programs partially offset these losses in some years, residual net losses remain, and offsets are uncertain and contingent on congressional action.
Finally, the paper finds that replacing prevented planting buy-up protection through higher coverage levels is costly and, for some producers, infeasible. Even under the enhanced subsidy structure introduced by the One Big Beautiful Bill (OBBB), replacing the buy-up generally requires producer-paid premium increases of roughly 14–29%. For producers already near the 85% coverage ceiling, full substitution is mechanically impossible.

The ARPC White Paper is available through the Agricultural Risk Policy Center at North Dakota State University: https://ageconsearch.umn.edu/record/388968

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