Stacked Income Protection (STAX)

The Stacked Income Protection Plan (STAX) is a crop insurance product for upland cotton that provides coverage for a portion of the expected revenue for your area. Most often your area will be your county, but it may include other counties or even practices as necessary to obtain a credible amount of data to establish an expected yield and premium rate.

How Does It Work?

STAX provides coverage for up to 20 percent of the expected area revenue in increments of 5, 10, 15 or 20 percent.
It may be purchased on its own or as a companion to an MPCI policy.

The amount of STAX coverage depends on the following items:

Expected Yield
The expected yield for STAX will be based on the historical average of yields in the county reported to RMA by insured growers. In areas where the yield data are thin, counties will be combined in order to accumulate enough data to determine expected yields and premium rates.

Projected Price
Determined by CEPP.

Area Loss Trigger
The percentage of expected area revenue you choose, ranging from 90 percent to 75 percent in 5 percent increments, below which an indemnity is paid and which is contained in the actuarial document.

Coverage Range
The percentage which represents the amount of the expected area revenue covered by STAX. It is the difference between the grower’s selection of the Area Loss Trigger and the higher of 70 percent or the companion policy coverage level.

Protection Factor
Grower may select a protection factor from 0.80 to 1.20 (0.01 increments) to better tailor their coverage to their risks.
STAX pays a loss on an area wide basis, and an indemnity is triggered when there is an area loss in revenue or yield as determined by the FCIC. Loss payments begin when area revenue falls below the Area Loss Trigger selected by the grower (90, 85, 80, or 75 percent). Loss payments reach their maximum when area revenue falls to 70 percent of its expected level – unless your companion policy has a coverage level above 70 percent, in which case payments end sooner.
STAX payments are determined only by area average revenue, and are not affected by whether a grower receives a payment on their companion policy (if purchased). So it is possible for a grower to experience an individual loss on his or her companion policy, but not trigger an area-based STAX payment (i.e. grower does poorly but the overall area does well), or vice-versa.
A separate administrative fee will be applied.

Sample Calculations

StepSTAX Coverage Calculation


STAX begins to pay when area revenue falls below this percent of its expected level (grower may select from 90% down to 75%)90%
BSTAX Endorsement pays out its full amount (liability) when area revenue falls to this percent of its expected level (equal to the higher of 70%) or the coverage level percentage of the companion policy. In this case the companion revenue policy brings this to 75%)75%
CCoverage Range of STAX (A - B)15%
DProtection factor (grower may change the amount of coverage by selecting a protection factor from 0.80 to 1.20)1.20
EAmount of STAX Protection (C x D x $538.20)$96.88

Additional Information

STAX is available in all counties where Federal crop insurance coverage for upland cotton is currently offered.

Can I add Supplemental Coverage Option (SCO) to my STAX coverage?
SCO cannot be added to any acreage that is covered under the STAX policy, however; the insured must designate which acres of cotton in the county will be covered by STAX and which acres will be covered by SCO.

If I enroll my upland cotton in STAX, can I enroll my other crops in a different program?
Yes, you may enroll separate crops on your farm into one of three programs: PLC, ARC-County, or ARC-Individual.

Purchasing STAX

You may purchase STAX the same way as for any crop insurance policy, through your crop insurance agent. You must also decide if you want to purchase STAX alone or with another crop insurance policy as identified above.

If you choose to purchase STAX with a companion policy, it must be done by the sales closing date and with the same insurance company. The coverage level of the companion policy can affect the amount of coverage that STAX provides.

STAX is a continuous option – it must be cancelled by the cancellation date.


How Much Does STAX Cost?
The Federal government will pay for 80 percent of the premium cost for STAX. The exact premium cost will depend on the area, coverage range selected, and protection factor selected. You should consult your crop insurance agent for detailed price quotes.

Payments are received when county revenue falls below the area loss trigger selected by the insured.