A new white paper from the Agricultural Risk Policy Center (ARPC) at North Dakota State University analyzes the economic consequences of eliminating prevented planting (PP) buy-up coverage under USDA’s Expanding Access to Risk Protection (EARP) rule, with particular attention to producer costs and the role of enhanced premium subsidies under the One Big Beautiful Bill (OBBB).

The paper, Prevented Planting After Buy-Up Elimination: Coverage Level Substitution, Producer Costs, and the Role of Enhanced Premium Subsidies Under the One Big Beautiful Bill (OBBB), authored by Dr. Francis Tsiboe, evaluates how producers can, or cannot, substitute higher coverage levels for the loss of targeted PP buy-up protection. Using administrative data from USDA’s Risk Management Agency spanning the 2011–2025 commodity years, the analysis examines mechanical coverage effects, observed producer behavior, and counterfactual premium outcomes.

The findings show that eliminating PP buy-up fundamentally integrates early-season risk management into broader coverage decisions, reducing producer flexibility. While modest coverage increases can partially substitute for former buy-up protection at moderate coverage levels, substitution is nonlinear and constrained, particularly for producers already near the 85 percent coverage ceiling. By 2025, more than three-quarters of insured acres were already at coverage levels of 70 percent or higher, limiting adjustment capacity for many producers.

The study also finds that premium subsidy design plays a central role in determining the economic feasibility of coverage substitution. Under the 2018 Farm Bill subsidy structure, replacing buy-up protection through higher coverage would have implied producer-paid premium increases of roughly 24 to 41 percent. Enhanced subsidies enacted under OBBB substantially reduce these cost pressures, lowering premium increases by about 10 percentage points on average, though producer costs remain higher than under the pre–buy-up environment.

“These results highlight how the elimination of targeted risk management tools reshapes both producer behavior and cost exposure,” said Dr. Tsiboe, Senior Research Economist and Program Leader at ARPC. “Enhanced premium subsidies under OBBB make coverage substitution more viable for some producers, but structural limits mean that many cannot fully replace the protection previously provided by prevented planting buy-up.”

The ARPC White Paper is available through the Agricultural Risk Policy Center at North Dakota State University.

Media Contact:

Dr. Francis Tsiboe - francis.tsiboe@ndsu.edu
Agricultural Risk Policy Center (ARPC)
North Dakota State University
www.ndsu.edu/agriculture/arpc