On April 29, 2019, RMA announced modifications to the Rainfall Index Annual Forage plan of insurance. Beginning with the 2020 crop year, a dual use option was added to the policy that allows producers to purchase both an Annual Forage policy and a Small Grains policy for a crop that is both grazed and harvested. Counties where the option is available will be designated in the Special Provisions. The Annual Forage policy was also revised to change the pricing methodology to better reflect difference in annual forage values at the county level and reduce the large differences across state lines. The productivity factor was removed in Colorado and New Mexico. Catastrophic risk protection coverage is now available with the intended use of grazing. The veteran farmer and rancher and native sod provisions contained in the 2018 Farm Bill were added. Lastly, the conservation compliance language was updated consistent with USDA regulations. RMA also issued the Rainfall Index Plan Annual Forage Crop Provisions, actuarial information, and a summary of changes.
RMA issued a press release announcing the dual use coverage on May 7, 2019, and a Fact Sheet on May 22, 2019 at https://www.rma.usda.gov/en/Fact-Sheets/National-Fact-Sheets/Annual-Forage-Insurance-Program-Dual-Use-Option.
ANALYSIS – The FCIC Board of Directors approved these changes on April 23, 2019. Dual use coverage was authorized in section 11109 of the 2018 Farm Bill and allows crops that are both grazed and harvested to be covered for the separate uses. In the past, only the harvested production was covered so when there was an early season loss that prevented grazing of the acreage, the producer was not indemnified for this loss of production. Now producers can receive separate indemnities for these losses. These changes will hopefully improve the policy and offer coverage consistent with the value of the crop.
All statements made are opinions of the author and are not intended to provide legal opinions or legal advice.