An insurance tool that
was introduced a few years ago to help manage risk associated with drought or a
lack of rainfall in pastures and rangeland has the sales closing dates for the
upcoming year set for November 15, 2012.
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| Drought of 2011 and 2012 in Nueces County, Texas. |
Pasture Rangeland
Forage (PRF) crop insurance is a group risk policy that covers livestock
grazing and forage land, and in Texas, it is based on a Rainfall Index. The
Rainfall Index (RI) uses National Oceanic and Atmospheric Administration (NOAA)
data and the index reflects how much precipitation is received relative to the
long-term average for a specified area or grid and time frame.
Each grid covers an
approximate 12 x 12 mile grid. You must select at least two, 2-month time
slots, where rain is important to your operation in your area. These time slots
are called index intervals. Your insurance payments will be calculated based on
the actual rainfall in the grid and how it differs from normal rainfall within
the grid and index interval(s) you have
chosen to insure. When the final grid index falls below your “trigger grid
index” (coverage level multiplied by the expected grid index), you will receive
a loss payment. This insurance coverage is for a single peril—lack of rain.
Coverage is based on the experience of the entire grid. It is NOT based on
individual farms or ranches or specific weather stations in the general area.
PRF insurance was
designed for maximum flexibility. You
are not required to insure all your acres, but you cannot exceed the total
number of grazing or haying acres you operate. This allows you to insure only
those acres that are important to your grazing program or hay operation. By
selecting a Productivity Factor, you can establish a value between 60 and 150
percent of the County Base Value and match the amount of your protection to the
value of forage that best represents your specific grazing or hay operation, as
well as the productivity of your land.
You will be asked to
make several choices when insuring your grazingland or hayland production,
including coverage level, index intervals, productivity factor, and number of
acres. You will also need to provide your farm numbers. You should work with your crop insurance agent to view the map and index
grids for your area, and assign acreage to one or more grids based on the
location and use of the acreage that is to be insured. It is critical that producers review the
historical indices for their grid ID to determine how well the past results
correspond to their past observations.
Remember the sales closing date
for 2013 crop is November 15, 2012.
The web site with more
information on this program and grid locations and can be found at: http://www.rma.usda.gov/policies/pasturerangeforage/
