With recent cuts by USDA, the Risk Management Agency “renegotiated” their agreement with all crop insurance companies, said crop insurance agent Aaron Tattersall. Though these changes directly affect agencies and agents, they also affect consumers because the program has expanded.
“The RMA saved money in areas of the existing program then redirected that money toward expansion and improving the Pasture Rangeland Forage insurance program for 2011,” said Tatersall. “There are changes for next year. The program will be expanded for 2011 through federal crop insurance. Now all counties in Colorado, Oklahoma, New Mexico and Texas are eligible.
All counties in Arizona, California, Florida, Georgia, Idaho, New York, North Dakota, Oregon, Pennsylvania, South Carolina and South Dakota are also eligible.
In Colorado, since the program’s inception in 2007, the rainfall index has been used for eastern slope counties and the western slope counties used the vegetative index. Prior to 2011 the counties in the “middle” could not participate but changes were recently announced to include all of the “middle” counties on the rainfall index.
The vegetative index is based off a “reflectivity index.” When plants or forage are stressed they reflect less light so the policy will trigger an indemnity when the reflectivity of a 4.8 by 4.8 mile square (as measured by the U.S. Geological Survey) comes in less than normal. The Rainfall Index will trigger an indemnity when precipitation (measured by NOAA) comes in less than a historical average. Both programs allow producers to choose “intervals” (or a set of two to three months) that gives them the ability to align when production is the most important on their place.
One significant change in the vegetative index includes an adjustment to the indemnity factor, Tattersall said. The program now assumes a 30 percent of normal reading is a total loss and will provide a higher indemnity, in comparison to prior years, once triggered.
Changes in deadlines have also been made. The sign up deadline is now Sept. 30, 2010 and the acreage reporting deadline will be Nov. 15, 2010. “The coverage kicks in January 2011,” Tattersall said.
Other changes implemented for the 2010 year include:
VI - The Vegetative Index insurance period was shifted to a Risk Management Agency determined “growing season” by county.
RI - The Rainfall Index moved from six to 11 different intervals to choose from
RI - The method for determining precipitation was improved from the Cressman Index to Standardized Interpolation.
All plans - requirements to submit FSA information along with a PRF application. This means that ranchers who have never certified their grass and want to participate in PRF will be required to get a Farm Serial number at the FSA office.
“I believe the RMA continues to make an honest effort to improve the program,” Tattersall said. “The program’s current ‘pilot phase’ allows the RMA to make changes based on feedback. It isn’t a one size fits all program but my experience is that it will help when it is dry.”
