By Billy Fanning
Hay and pasture producers, are you frustrated with the limited attributes of the NAP program? Are you looking for something to better cover your risk with hay and pasture acres? If so, you really need to look at the Pasture, Rangeland, Forage (PRF) program available from the Risk Management Agency (RMA).
PRF is a federally subsidized product offered through RMA to producers in all 48 lower states. The PRF program is designed to provide insurance coverage on your pasture and/or forage acres. This innovative program is based on a precipitation Rainfall Index. PRF gives you the ability to buy insurance protection for losses of forage produced for grazing or harvested for hay, which result in increased cost for feed, destocking, depopulating, or other actions.
How does it work? The Rainfall Index uses NOAA data from the climate prediction center. Coverage is set up on a grid system across the US with each grid being 0.25 degrees in latitude and 0.25 degrees in longitude which translates to approximately a 17 x 17 mile grid at the equator, and approximately a 12 x 17 mile grid in the eastern part of the US. An enrolled producer will select a minimum of two, 2-month periods where precipitation will be monitored, these periods are called the index intervals. This is area coverage based on the entire grid and not based on individual farms or specific weather stations in a general area.
A producer can insure up to 150% of the county base value or as low as 60%. This range of coverage is called the productivity factor. Average rainfall triggers can be set as high as 90% of normal rainfall and as low as 70%. Therefore, a producer can have any combination of values and triggers between the two ranges of protection. The most common coverage is an 85% rainfall trigger and a 150% productivity factor.
The enrolled producer will be asked to make several choices when insuring their grazing and hay production, including coverage level, index intervals, productivity factor and number of acres. Crop insurance agents across the country can sell this product and RMA encourages producers to use the decision making tool to best locate their operation and historical indices.
From the author’s prospective, I have been writing this type of coverage for the last several years and have learned that most producers are not aware of the program and the attributes offered. Many are leaving themselves exposed to risk that can be covered. This program does really work the way it was designed.