What Ending Prevented Planting Buy-Ups Means for Farmers’ Insurance Costs
- ARPC NDSU
- 5 days ago
- 3 min read
By Francis Tsiboe, Hongxi Zhao, and Rwit Chakravorty
The planned end of the prevent planting (PP) buy-up option in 2027 marks an important change in how farmers manage risk Chakravorty et al. (2025). This option has allowed farmers to better protect them- selves against planting-season risks such as delayed fieldwork or adverse weather. New research from ARPC suggests that farmers can make up for the loss of the buy-up option by choosing higher levels of crop insurance coverage Tsiboe (2026) and Tsiboe et al. (2026). However, this substitution expands total insured liability and increases both producer-paid premiums and program costs, making higher coverage a less targeted and more expensive tool for managing planting-season risk.
Beginning in 2026, the One Big Beautiful Bill (OBBB) substantially expands federal support for agriculture and restructures premium subsidies within the Federal Crop Insurance Program. Premium subsidy rates increase for many coverage levels relative to prior policy rules, and recent ARPC analysis shows that enterprise units now receive subsidy support more comparable to basic and optional units Turner et al. (2025). These changes broaden access to premium assistance and increase total federal spending on crop insurance, while also altering the cost-sharing balance between producers and taxpayers.
The elimination of the PP buy-up and the subsidy changes under OBBB generate offsetting but uneven effects on producer-paid premiums. Although enhanced subsidies lower premium burdens for some coverage choices, producers who substitute toward higher coverage levels to replace lost PP protection must pay a larger share of total premiums at those levels. Consequently, producers seeking stronger protection against planting-season risk may experience higher out-of-pocket insurance costs despite increased federal support, especially those already concentrated at high coverage levels and with limited scope to further adjust their coverage elections.
A counterfactual simulation is used to evaluate the combined cost effects of PP buy-up elimination and subsidy changes under OBBB. Using data from the Risk Management Agency, recent ARPC research simulates producer-paid premiums under the assumption that insured acres, insurance plan choices, and unit structure selections remain fixed at their observed values Tsiboe (2026). At the national level, the results indicate that substantial increases in producer-paid premiums would be required to replace the eliminated 5 percent PP buy-up through higher coverage levels. Estimated premium increases range from 29 percent for canola, 28 percent for barley and soybeans, 27 percent for rice and corn, 26 percent for peanuts, 24 percent for popcorn, 21 percent for wheat and dry beans, 20 percent for cotton and sunflowers, 17 per- cent for grain sorghum, and 14 percent for dry peas. These increases correspond to additional per-acre producer costs ranging from approximately $1.91 to $5.13.
As shown in Figure 1, expected out of pocket costs vary substantially across states following the substitution of the prevent planting buy up option under OBBB. The main drivers of these differences are pre- vailing unit structures and typical coverage level choices. States dominated by enterprise or whole farm units, such as Vermont, New Mexico, Massachusetts, Utah, and Texas, are expected to see most of the substitution costs offset by OBBB. In contrast, states that are also dominated by enterprise or whole farm units but have historically selected high coverage levels, above 70 percent, are expected to experience the largest increases in out-of-pocket costs. This group includes Arizona, New Jersey, Iowa, Alabama, Tennessee, Pennsylvania, Illinois, and North Dakota.
These results suggest that OBBB alleviates the cost burden for producers across a broader spectrum but does not alter the distribution of costs across coverage levels. For farmers, the loss of a targeted planting season tool, combined with steeper premium contributions at higher coverage levels, may reduce incentives to maintain strong risk protection. This could leave some producers more vulnerable to weather and market risks or lead them to seek alternative private risk management strategies.
Figure 1: State-Level Impacts on Producer-Paid Premiums from Coverage Level Adjustment After Prevented Planting Buy-Up Removal Under Alternative Subsidy Policies.
Source:NDSU Agricultural Risk Policy Center (ARPC), using data from USDA, Risk Management Agency Summary of Business as of January 06, 2026.
References
Chakravorty, Rwit, Dylan Turner, and Francis Tsiboe (2025). Prevented Planting Buy-Up Coverage: Payments and Policy Changes. ARPC Brief 2025–18.
Tsiboe, Francis (2026). 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). ARPC White Paper 2026-01.
Tsiboe, Francis, Rwit Chakravorty, and Hongxi Zhao (2026). Ending Prevented Planting Buy-Ups Changes Insurance Choices and Expands Program Risk. ARPC Brief 2026–02.
Turner, Dylan, Francis Tsiboe, Hunter Biram, and Lawson Connor (2025). Actuarial implications of prevented planting coverage. Applied Economic Perspectives and Policy 47(1): 394–415. https://doi.org/10.1002/aepp.13471.