Agricultural News
OSU Report Outlines New Federal Pasture and Forage Insurance Program
Tue, 25 Sep 2012 15:16:59 CDT
A report published by the Oklahoma State University Department of Agriculture Economics examines the new federal Pasture, Rangeland, Forage (PRF) insurance program. Authored by Extension economists Jody Campiche and J.J. Jones, the report describes the program and walks producers through an online decision tool to determine the financial ramifications of insuring their forage crops under this program.
PRF is a pilot federal crop insurance program that provides insurance protection for forage produced for grazing or harvested for hay. The program is administered by the USDA Risk Management Agency (RMA) and sold through private crop insurance companies. Private crop insurance companies directly insure producers and their crops, and then RMA reinsures the companies against a portion of the losses they may suffer.
Due to difficulties quantifying price and yield for forage crops, particularly for grazing, standard crop insurance products are generally not an option. This product is similar to group risk insurance and provides area-wide coverage. For Oklahoma and the majority of the United States, the program is based on a rainfall index. PRF insures producers based on the average rainfall in their geographic area instead of the producers' individual farm. Producers receive an indemnity payment when rainfall in their area falls below the normal historical level.
To participate in PRF, producers must submit an application and an acreage report to their crop insurance agent no later than November 15th of the previous crop year. So, for the 2013 crop year, the deadline is November 15, 2012. Producers must certify all insurable and uninsurable acreage of the crop type and the general location within a specified grid, but they are not required to insure all eligible acreage or specify which acres are insured.
Producers should visit a crop insurance agent to enroll in PRF or to obtain more information. To find a crop insurance agent, producers can use the RMA agent locator tool by clicking here.
Any pasture, rangeland, or forage crops produced for haying or grazing by livestock is eligible for PRF coverage. However, producers can be ineligible to participate in PRF if they have enrolled the particular acreage in other government programs, especially conservation programs that prohibit them from grazing or haying the land. For example, producers who enroll land in the Farm Service Agency's (FSA) Conservation Reserve Program agree to plant resource-conserving vegetative covers that would generally preclude grazing. Producers can enroll in both PRF and the Non-Insured Disaster Assistance Program (NAP) since PRF does not provide multi-peril coverage.
Producers may select only one coverage level and dollar amount of protection per acre for each of the insured crop types in the county. The dollar amount of protection per acre selected will be applied to each Grid ID and crop type. Producers are not required to report yield history or maintain production records for the PRF policy. However, producers should continue to maintain production records in case an Actual Production History (APH) plan of multiple peril crop insurance becomes available in future years.
Producers do not need to file a claim or submit any documentation for a loss under the PRF
policy. Payments will be made after rainfall data is collected for each interval and provided to
RMA and crop insurance companies, which means that payments may be issued multiple times
in a year.
You can read the full OSU report with links to the decision tool by clicking here.
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