USDA Moves to Restore the Prevented Planting Buy-Up Option: What It Means for Producers
- ARPC NDSU
- 2 days ago
- 6 min read
On July 21, 2026, USDA stated that it would restore the prevented planting (PP) buy-up option under the Federal Crop Insurance Program. The statement was made by Agriculture Secretary Brooke Rollins during a Senate Appropriations Committee hearing, in response to questioning from Senator John Hoeven (R–ND), chair of the Senate Agriculture Appropriations Subcommittee. Rollins indicated that the Department supported the option and was proceeding with implementation. Restoration is expected to begin with the 2027 crop year, although RMA guidance will be needed to confirm the effective date.
The statement constitutes an administrative commitment rather than a regulatory action. As of this writing, USDA’s Risk Management Agency (RMA) has not issued guidance establishing the scope, eligibility, or timing of the restoration.
The buy-up option permits producers with eligible additional coverage policies to increase prevented planting protection by five percentage points above the standard PP coverage factor. In 2025, the option was elected on more than 67 million acres nationwide, including approximately 10 million acres in North Dakota. These brief reviews the regulatory action that eliminated the option, summarizes prior ARPC research on its performance, and identifies the crops and regions where restoration will matter most.
From Elimination to Restoration
The Federal Crop Insurance Corporation eliminated the buy-up option in the Expanding Access to Risk Protection (EARP) final rule, 90 Fed. Reg. 54523 (Nov. 28, 2025). The change applied beginning with the 2026 crop year for crops with contract change dates on or after November 30, 2025, and beginning with the 2027 crop year for all other crops.
USDA characterized the change as part of a broader effort to modernize crop insurance. The Department noted that use of the option was concentrated in the Prairie Pothole Region and that recent supplemental disaster programs had provided assistance for some of the same losses.
Farm groups, lenders, crop insurance agents, and lawmakers raised objections to this rationale, contending that insurance and ad hoc assistance are not substitutes. Crop insurance is purchased prior to the growing season and can be incorporated into production and financing decisions. Disaster assistance is authorized after losses occur, is not guaranteed, and may be subject to substantial delay.
FCIC issued EARP as a final rule with a request for comments, with the comment period closing January 27, 2026. Under Secretary Richard Fordyce subsequently testified before the House Agriculture Committee that USDA had received approximately 350 comments, which he characterized as overwhelmingly favoring restoration of the option.
On January 22, 2026, Senator Hoeven joined Senate Agriculture Committee Chairman John Boozman (R–AR), Ranking Member Amy Klobuchar (D–MN), and 16 other senators in a letter requesting that USDA reverse the decision. The letter cited 7 U.S.C. §1508(h)(6), which directs the Federal Crop Insurance Corporation to offer additional prevented planting coverage, and argued that producers required continued access to established risk-management tools at a time of high production costs and continued weather
uncertainty. In a news release issued following the July hearing, Hoeven stated that his office had worked with Secretary Rollins and Under Secretary Fordyce on the issue and had raised it with the Office of Management and Budget.
Evidence on Buy-Up Performance
Prior ARPC research examined several questions that became central to this debate (Tsiboe et al., 2026c; Tsiboe et al., 2026b). Eliminating the option removes coverage targeted at a specific interval in the production cycle. Producers may respond by electing higher overall coverage levels, but that represents a less targeted and more costly substitute for a risk concentrated in the planting window.
Historical loss experience provides little evidence that policies carrying the option were associated with excessive underwriting losses. From 2011 through 2024, policies carrying buy-up coverage recorded a cumulative loss ratio of 0.818, compared with 0.866 for policies carrying only the standard PP coverage factor (Tsiboe et al., 2026a). Both ratios fall below 1.0, indicating that indemnities were less than premiums in each group, with the group carrying the option recording the lower ratio.
These are aggregate policy-level comparisons and should not be interpreted as a direct estimate of the loss ratio on the incremental buy-up layer. Crop mix, geography, and producer characteristics also differ between the two groups, and a simple comparison of ratios does not control for those differences. The national record nonetheless does not indicate a pattern of excessive losses on policies electing the option.
Where Buy-Up Coverage Has Mattered Most
Use of the option has been geographically concentrated, as is the risk against which it provides protection. The ability to plant within the insurable period depends on soil drainage, spring precipitation, and the interval between field access and the final planting date. These conditions are spatially correlated and persistent over time, and the geographic distribution of prevented planting indemnities follows from them. Election of the option reflects that exposure together with premium rates and crop mix.
From 2010 through 2024, corn accounted for the largest share of PP indemnities on policies carrying the buy-up option, followed by rice, soybeans, and wheat. North Dakota and South Dakota recorded the largest cumulative state totals, primarily attributable to prevented planting losses in corn and soybeans, while California and Arkansas accounted for the majority of buy-up-related rice indemnities (Figure 1; Chakravorty et al., 2025). Because indemnity totals scale with insured acreage, these rankings reflect the size of each crop sector as well as the incidence of prevented planting.
Figure 1: Top Five Crops and States by Prevented Planting (PP) Indemnities with Buy-Up Coverage.
Note: Values represent total indemnities paid on prevented planting records with the buy-up option attached from 2010 through2024. Totals are not acreage-adjusted and therefore reflect differences in insured acreage across crops and states.
Source: NDSU ARPC using data from USDA Risk Management Agency Cause of Loss data.
Geographic Concentration in the Upper Midwest
County-level indemnities are concentrated in eastern North Dakota and northeastern South Dakota (Figure 2). Many of the counties recording the largest cumulative payments are located along or west of the Red River Valley, where poorly drained or saturated soils, excess spring moisture, and compressed planting windows can delay fieldwork beyond final planting dates.
The restored option will therefore carry greater value in areas where prevented planting constitutes a recurring production risk rather than an isolated event. North Dakota illustrates this pattern, with approximately 10 million acres electing the coverage in 2025.
Figure 2: County-Level Prevented Planting Buy-Up Indemnities for All Crops (2018–2024).
Note: The map reports county-level prevented planting indemnities attributable to buy-up coverage for all crops combined. The accompanying bar chart reports the ten counties with the largest cumulative indemnities from 2018 through 2024.
Source: NDSU ARPC using data from USDA Risk Management Agency Cause of Loss data.
What Restoration Means for Producers
Prevented planting coverage compensates producers for a portion of the costs incurred prior to planting when an insured cause of loss prevents a crop from being planted. These may include land, machinery, seed, fertilizer, and financing costs. Payment is calculated from the producer’s guarantee and PP coverage factor and does not constitute reimbursement of specific expenses.
The buy-up option increases the PP coverage factor by five percentage points. Consider a corn producer with a $700-per-acre guarantee and a standard PP factor of 55 percent. The standard payment would be $385 per acre. At 60 percent, the payment would be $420 per acre, an increase of $35 per prevented planting acre before accounting for the additional premium.
What RMA Must Decide Next
USDA and congressional statements indicate that restoration is intended for the 2027 crop year. Meeting that timeline requires RMA to issue guidance sufficiently in advance for approved insurance providers to revise systems and rate the product, and for producers to evaluate the option before applicable sales closing dates.
Four issues require clarification:
1. The crop years and commodities to which the restored option will apply;
2. Eligible policies and coverage levels;
3. Election procedures and deadlines relative to applicable sales closing dates; and
4. Whether USDA will establish transitional procedures for producers affected during the 2026 crop year.
Producer organizations have noted that a Federal Register action or written USDA guidance would provide greater administrative certainty than a statement made in a hearing setting. The elimination took effect for the 2026 crop year, and the timing of RMA guidance will determine whether the interruption in access is limited to affected crops in that year or extends into another production year.
References
Chakravorty, Rwit, Dylan Turner, and Francis Tsiboe (2025). Prevented Planting Buy-Up
Coverage: Payments and Policy Changes. ARPC Brief 2025–18.
Tsiboe, Francis, Rwit Chakravorty, Dylan Turner, Shawn Arita, and Hongxi Zhao (2026a).
Prevented Planting Buy-Up Elimination and What the Evidence Indicates about Adoption, Actuarial Performance, and PrePlanting Risk Management Options for Farmers. ARPC White Paper 2026–02. https://doi.org/10. 22004/ag.econ.388968.
Tsiboe, Francis, Rwit Chakravorty, and Hongxi Zhao (2026b). Ending Prevented Planting Buy-Ups Changes Insurance Choices and Expands Program Risk. ARPC Brief 2026–02. https://doi.org/10.22004/ag.econ.388966.
Tsiboe, Francis, Hongxi Zhao, and Rwit Chakravorty (2026c). What Ending Prevented Planting Buy-Ups Means for Farmers’ Insurance Costs. ARPC Brief 2026(03): 1–4. https://doi.org/10.22004/ag.econ.388965.