The Pasture, Rangeland, Forage (PRF) is a pilot insurance program created in 2007 as a tool for livestock and forage producers to mitigate the risk of forage loss associated with the lack of precipitation. Currently, the program is available in 48 states and over 158 million acres were enrolled in 2020. Compared to traditional crop insurance programs, the PRF is an index-based insurance that utilizes aggregated weather data to estimate the relative temporal precipitation within a specific area. Specific farm level precipitation or forage production is not measured. Thus, given future and unknown precipitation levels, effective participation in the program depends merely on farmers’ selection of the decision parameters: grid intervals, coverage level and productivity factor. These parameters determine the amount of protection, premium rates, subsidy level, and expected indemnity payments. At present, farmers rely on ad-hoc recommendations to tailor their policies given the limited research or decision-aid tools available. There is a need to provide educators with research-based tools that they can use to train and assist forage producers to better manage precipitation uncertainty. This presentation discusses comprehensive risk-efficient allocation methods to solve the PRF parameter selection problem, and how they were incorporated into Extension programming. Discussion also provides the foundations to develop inclusive decision-aid tools for farmers, and lessons learned training South Texas forage producers. This presentation is of interest to ag lenders and crop insurance providers working with forage producers, and to Extension professionals and educators assisting farmers to better manage production risk.
|2021 Extension Risk Management Education National Conference