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USDA launches new insurance tools for range and pasture

rangeland insurance for risk management

On August 7 USDA announced the availability of two new risk management tools for pasture, rangeland and forage, beginning with the 2007 crop year.

"These new insurances tools will help farmers and ranchers, especially with operations located in drought impacted areas, to improve their risk management capabilities," said US Secretary of Ag Mike Johanns, in a statement to the press.

Designed to operate in a variety of range and pasture environments, the new insurance products, the Rainfall index insurance program and theVegetation index insurance program, are offered by the Risk Management Agency (RMA) and are available through approved insurance providers. These programs will provide livestock producers the ability to purchase insurance protection for losses of forage produced for grazing or harvested for hay.

The Rainfall index insurance program will be pilot tested in 220 counties in Colorado, Idaho, Pennsylvania, South Carolina, North Dakota and Texas and is based on rainfall indices as a means to measure expected production losses.

The Vegetation index insurance program will be pilot tested in 110 counties in Colorado, Oklahoma, Oregon, Pennsylvania, South Carolina, and South Dakota and is based on satellite imagery that determines the productivity of the acreage as a means to measure expected production losses.

Together, these pilot programs will be available to provide coverage on approximately 160 million of the 640 million acres of grazing land and hay land in the United States.

Both insurance products are designed to allow maximum flexibility for the producer. For instance, producers are not required to insure all their acres, but rather may elect to insure only those acres that are important to their grazing program or hay operation.

Further, producers are not required to insure the acreage for the entire crop year. The crop year is divided into intervals and producers may elect to insure their acreage for only those intervals where the risk is the greatest.

Development of the two programs was provided through provisions of the Agricultural Risk Protection Act of 2000, which established the development of a pasture, rangeland and forage program as one of RMA's highest research and development priorities.

Both of these products will be available for sale from crop insurance agents beginning in late August 2006. The sales closing date is November 30, 2006. More detailed information about these two new pilot programs is available on the RMA Web site at: