As growing seasons often prove unpredictable, crop insurance can help save a farmer’s livelihood.
A. Fay Benson, a Cornell Extension agent in Seneca County, recently presented “Pasture, Range and Forage Crop Insurance” at New York Certified Organic’s winter meeting.
He discussed the benefits of drought insurance, known as Rainfall Index.
“This insurance is coverage for precipitation only, with payments triggered when current rainfall is sufficiently below historic levels,” Benson said, adding that a farmer doesn’t have to provide information on forage yields.
He cited his own operation as an example.
“Anytime I am beneath the 90 percent average rainfall, I get a payment,” he said. “Last year, I got some sizable payments on this, as you can imagine.”
In 2016, Seneca County suffered severe agricultural losses due to the drought. By August, the USDA designated 15 counties as primary natural disaster areas because of the drought, including Seneca.
The Rainfall Index is based on more than 50 years of data from the National Oceanic and Atmospheric Administration. The government’s data is dependable, Benson said.
“A rainfall index is used as proxy indicator of the amount of forage production on pasture grazing land and hay land,” he said.
According to the USDA’s Risk Management Agency website, the Rainfall and Vegetation Index plans of insurance are designed as risk management tools to insure against declines in a designated area called a grid.
They are primarily intended for use by producers whose crop production tends to follow the average precipitation or vegetation patterns for the grid. NOAA determines the size of the grid.
Benson said the “insurable crop” is pasture or hay first seeded before July 1 of the previous year.
“There are two crop types: pasture grazing land and hay land,” he said.
Benson said the cost of the insurance depends on the type of crop being insured. He recommends the Ag-Analytics website — www.ag-analytics.org — run by Joshua D Woodard, assistant professor of agribusiness and finance at Cornell.
A farmer can review 50 years of rainfall data by month on the website just by entering a ZIP code. It can also estimate premium costs.
“You don’t have to insure all your acres,” Benson said.
For example, if a farmer has irrigation and tiling on one field but not the another, he could choose to insure the nonirrigated field for higher risk of damage from drought.
Benson said that sometimes the valuation of acres doesn’t make sense to some farmers, like $78 an acre for pasture. But “crop insurance isn’t logical,” he said.
Some people complain that organic should be valued higher than traditionally grown acres.
But Benson said reporting the value of previous years’ yields can help farmers receive the appropriate insurance payment.
“Buy a little at first until you know how it works,” he said. “Talk with an agent, and better yet, talk with a farmer who uses crop insurance. Visit an FSA office and look online.”
To find a crop insurance agent, Benson told the group to visit www.rma.usda.gov/tools/agent.html.
Source: Lancaster Farming
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