USDA's Risk Management Agency (RMA) recently announced the expansion of the pasture, rangeland, forage crop insurance program (PRF) to additional states and counties over the next two years. "These programs were developed ... to provide producers the ability to purchase insurance protection for losses of forage produced for grazing or harvested for hay," says Matthew Diersen, South Dakota State University extension ag economist.
"It is important to remember PRF is a pilot program and there could be some bugs in it that may need to be worked out. Producers need to go into the program with their eyes open," Diersen says.
Beginning with the 2008 crop year, the program will include the entire states of Alabama and Wyoming, selected counties in South Dakota and New York's southern tier of counties. In 2009, coverage will include all of Kansas, Missouri, Nebraska, North Carolina and Virginia.
PRF began this year in selected counties in Colorado, Idaho, North Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota and Texas. By 2009, approximately 450 million acres of grazing and forage land will be eligible for coverage, according to RMA.
Diersen says PRF could substitute for forage production insurance in areas. The group risk policy covers livestock grazing and forage land and is based on either the Rainfall Index or the Vegetation Index. Using the Rainfall Index, insurance payments are calculated on the deviation from normal precipitation within a certain area during a specified time period. The Normalized Difference Vegetation Index (NDVI) measures vegetation greenness and correlates to vegetation conditions and productive capacity. In general, healthier plants are given a higher NDVI value. Losses are also indemnified based on the deviation from normal.
Diersen urges producers to read nationwide insurance coverage fact sheets at www.rma.usda.gov/policies/pasturerangeforage/. The site's mapping tool locates which land is insurable; historical data, coverage details and a premium calculator are also available. RMA's Web site -- www3.rma.usda.gov/apps/agents/ -- helps growers to locate local crop insurance agents. Deadline for the 2008 program is Nov. 30.
Contact Diersen at 605-688-4864.