Pasture, Rangeland, Forage Insurance (PRF)
is developed, underwritten and subsidized by the USDA Risk Management Agency.
PRF was designed to help provide protection from increased feed costs due to
forage losses caused by lack of rain. With this program the rancher can select which
acres they wish to insure. They may select a different coverage level
and productivity factor for each insured crop type in the county
Coverage under the PRF program is available for Grazing and Haying crop types.
This plan is available in the 48 contiguous states.
The sales closing date for this program is November 15, for coverage in the
upcoming year Coverage is based on rainfall experience of
a predetermined grid rather than individual farms or specific weather stations.
Lack of precipitation is the only cause of loss covered. Precipitation data will be
determined by NOAA, and RMA uses this to calculate the Final Grid Index. Losses
are paid when the grid’s final grid index, falls below the insured’s deductible.
Coverage levels are available from 70% to 90%.
Productivity factors allow individualization of coverage, from 60% to 150%.
Since PRF is an area-based plan of insurance, it’s possible to suffer a loss on an
individual operation and not receive an indemnity payment. Likewise, it’s possible
to receive an indemnity payment and not suffer a loss on your operation.
Coverage for bee producers is available under Apiculture (API). This provides
coverage for lost honey production due to insufficient plant growth caused by
below normal precipitation. Here’s how PRF works.
Daniel’s a cattle rancher. He insures his 10,000 acre grazing land that’s located
in one grid location, and selects two, 2-month
periods or Index Intervals. January/February and April/May Index Intervals.
The FCIC determines the County base value is $39.00
He selects the 90% coverage level He has an exceptionally good area, so he selects
a Productivity factor of 120% Example:
County Base value=$39 Coverage value=90%
Productivity factor=120% $39 x 90% x 120%=$42.12 per acre
Since his coverage is 90%, his Trigger Grid Index is also 90.
Regrettably, there is poor rainfall and the April/May Final Grid Index is
determined to be 72. Since the Final Grid Index is below his deductible,
there is a payable loss. The payment calculation is the difference
between the Trigger Grid Index and the Final Grid Index divided by the Trigger Grid
Index. (90 – 72) ÷ 90=0.2.
This payment calculation factor is multiplied by the dollar amount of protection.
$42.12 x 0.2=$8.42 per acre x 10,000 acres=$84,200 total payable loss
This payment will help Daniel meet some of his ranching expenses and keep his
operation going. Your first and most important decision is
to choose a specialist in this type of insurance coverage. Someone who not only understands
the program but can easily explain it and help tailor it to your
individual operation. At Golden Pacific Crop Insurance, our agents
have two decades of experience in crop insurance and still farm our own crops
as well. We know full well what you face out there with ever increasing regulations,
and food safety issues. Give us a call and learn how we can make this very important
risk management tool something that can be easy to use and much
more affordable than you may think. Call us at (559) 825-CROP (2767) or by email
at [email protected]