SALEM, Ohio – A new insurance program is giving Pennsylvania farmers another option when it comes to risk management.
The pasture, rangeland, forage insurance program gives producers the opportunity to protect themselves against losses resulting from lack of rain.
Developed by USDA’s Risk Management Association, the program applies to forage produced for grazing or harvested hay. It is separated into two portions – vegetation greenness and rainfall indices.
Rainfall Index. The Rainfall Index portion of the program was tested in 220 U.S. counties during 2007, including 17 southwestern Pennsylvania counties.
For this program, the land is divided into a grid with 12-by-12 mile sections. Each section of the grid has its own normal rainfall, determined by the National Oceanic and Atmospheric Administration.
Rather than measuring rainfall at a specific weather station, the administration combines estimates from several weather stations to approximate a normal rainfall for an area in the grid. The data is checked for extreme values and compared to observed amounts at nearby stations, as well as compared to a weather radar system.
This data collection method is designed to give an overall value for the grid’s rainfall, rather than an estimate from one location.
Farmers who enroll in the insurance program select at least two, two-month periods when rainfall is important for their pastures. If precipitation deviates a predetermined percentage from the normal estimate during those times, producers are eligible to receive insurance payments.
“You get paid if the rainfall is less than normal,” said Bill Chess, an extension educator in Lawrence County.
But it’s up to farmers to decide how much this program would benefit their property.
“Everybody has to weigh this themselves,” the educator added.
A meeting on the pasture, rangeland, forage insurance program, the milk revenue insurance program and crop insurance will be held 7-9 p.m. Nov. 8 at the Butler County Farm Service Agency office. The meeting is free, but registration is required by Nov. 2. To register, call 724-654-8370 or 724-287-4761.
Deadline. Those who wish to participate next year must enroll with a crop insurance agent by Nov. 30.
Producers can chose which acres they want to insure and the cost varies based on where a property is located on the grid.
Premium costs are shared by USDA and Pennsylvania.
The pasture, rangeland, forage insurance program will be phased in throughout the next two years. It began this year in selected counties in Pennsylvania, Colorado, Idaho, North Dakota, Oklahoma, Oregon, South Carolina, South Dakota and Texas.
Next year, it will expand to include Alabama and Wyoming, plus other parts of South Dakota and southern New York.
Producers in the following Pennsylvania counties may enroll for 2008: Allegheny, Armstrong, Beaver, Butler, Cambria, Clarion, Clearfield, Fayette, Greene, Indiana, Jefferson, Lawrence, Mercer, Somerset, Venango, Washington and Westmoreland.
In 2009, coverage will expand to all of Kansas, Missouri, Nebraska, North Carolina and Virginia.
Vegetation Index. The second part of the program – the Vegetation Index – measures the quality of vegetation. The vegetation greenness pilot program was tested in 110 U.S. counties, including nine northeastern Pennsylvania counties.
Using a grid setup, producers chose a three-month time period that is critical for their forage species production.
If the vegetation deviates from normal quality during the selected time, farmers are eligible for insurance payments.
In 2008, the Vegetative Index program will be open to farmers in Bradford, Lackawanna, Luzerne, Pike, Sullivan, Susquehanna, Tioga, Wayne and Wyoming counties.
Milk insurance. For dairy farmers looking for a little added insurance, the state will soon offer another program.
The milk revenue insurance program will allow producers to insure their gross margins, the difference between revenue and feed costs.
This program hasn’t begun yet, but will be available to farms of all sizes. It will offer monthly coverage, so farmers can choose which months to insure and which months to skip.
More information will be available as this program gets closer to its release date, which is expected to be in 2008.
(Reporter Janelle Skrinjar welcomes feedback by phone at 800-837-3419, ext. 22, or by e-mail at email@example.com.)
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