Pasture, Rangeland and Forage Pilot Insurance Program

SOUTH DAKOTA - South Dakota is one of six states selected to participate in a pilot project to provide livestock producers with insurance on their haying and grazing lands, a South Dakota State University specialist said.
calendar icon 5 October 2006
clock icon 3 minute read

The pilot program was developed by the USDA Risk Management Agency (RMA) and is available through local crop insurance agents. SDSU Extension Ranch Management Specialist Marty Beutler said producers wanting to take part in the pilot program need to sign up by Nov. 30, 2006, for the 2007 growing season.

The program gives livestock producers the ability to purchase insurance protection for losses of forage produced for grazing or harvested for hay. The program is only available in the following counties in South Dakota: Bennett, Butte, Corson, Dewey, Haakon, Harding, Jackson, Jones, Lyman, Meade, Mellette, Perkins, Shannon, Stanley, Todd, and Ziebach.

Other states participating in this pilot program are Colorado, Oklahoma, Oregon, Pennsylvania, and South Carolina.

“The pilot project is currently set to run for three years, after which a determination will be made to see if it will continue and be expanded to other states and other counties in South Dakota,” Beutler said. “The insurance for this program is a group plan provided by private insurance companies, although the Federal Government will be subsidizing over the half the cost of the premiums. Premiums will be the same at all participating crop insurance providers. The goal is to provide a safety net for producers who face drought conditions.”

Insurance premiums are determined through the use of satellite technology that assesses the losses in forage production across diverse range and pasture environments. Data from satellite images are used to determine the “greenness” of a given “index grid” of land. By comparing the current “greenness” level to those determined historically, an index is developed that reflects current production levels. The program does not measure individual production on a given pasture. If the index falls below a level set by the program and producers at signup, then payments are made to producers for the forage loss.

Beutler said each producer will be asked to make several choices when insuring grazing land or hay land production, including coverage level, index intervals, productivity factor, and number of acres. Producers can insure their acreage one time per year within four three-month intervals starting April 1, July 1, Oct. 1, and Jan. 1.

Producers will work with crop insurance agents to view the map and index grids for their area and assign acreage to one or more grids based on the location and use of the insured acreage.

The Risk Management Agency has a Web site that explains the program in detail and has an interactive worksheet (Decision Support Tool) that producers can access to evaluate various rates and productivity factors and performance from previous years. That will give them an idea of the level of indemnity and returns from their insurance investments for their specific index grid (location in South Dakota).

Source: agbionews.sdstate.edu

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