What is STAX and what will it mean to cotton farmers when it takes effect in 2015?

Under the new farm bill or the Agricultural Act of 2014, cotton program benefits will now be delivered through crop-insurance-based delivery systems. Cotton's program will not take effect until 2015 to give USDA more time to develop and implement its regulations.

The Stacked Income Protection Program, or Stax, is designed to provide farmers a layer of coverage between where traditional crop insurance programs stop and 100 percent of risk. Thus, it could be said to be layered or "stacked" on top of traditional crop insurance programs.

The National Cotton Council's Craig Brown talked to farmers in Robstown, Texas, in the first meeting of a series of educational sessions the NCC is conducting on the new legislation. Cotton farm bill meetings scheduled for the Southeast start later in March.

"This will be a new revenue product, available for purchase on all acres planted to upland cotton," said Brown, vice president for producer affairs for the NCC. "STAX will be administered by USDA's RMA (Risk Management Agency). You will have to purchase it from your crop insurance agent. You cannot get this through your county FSA office."

This is the second of a series of video reports prepared from the Robstown meeting by Farm Press contributor Logan Hawkes. See the whole video “Surviving Farm Bill Changes Part II” and more at Southwest Farm Press.

STAX indemnities are triggered at the county level, according to Brown. "STAX indemnities are not based on individual experiences."

The new program is set up so that it is stacked on top of a producer's other crop insurance coverage. It provides protection against losses between the 90 percent and 70 percent levels of total risk. As such, it has a 10 percent deductible.

"This area of coverage is really coverage that now is not obtainable and it's certainly not affordable. So that's the purpose of adding this insurance program to your mix in 2015."