A pilot program for rangeland insurance, criticized by some for how it calculated losses, has been revamped and expanded to include more producers in Montana and Wyoming, a federal agriculture official said Dec. 20.
Beginning with the 2005 crop year, ranchers in 39 Montana counties and 10 Wyoming counties will be eligible for coverage under the Group Risk Plan Rangeland Pilot Program, said Dave Nickless, deputy director of the U.S. Department of Agriculture’s Risk Management Agency in Billings. The regional office oversees federal crop insurance programs in Montana, Wyoming, North Dakota and South Dakota.
Previously, the pilot extended to only 12 Montana counties.
But the program will be much different from the pilot that started in 1999, Nickless said. One of the big differences involves the trigger for which losses could be calculated.
The program is meant to provide protection against loss of production on rangeland or pasture for whatever reason, said Virginia Guzman, supervisory risk management specialist with the agency in Kansas City, Mo. Drought has been a factor in low production in recent years but excess moisture could also be a problem, she said.
The trigger will be based on total hay production in a given county rather than on average yield per acre, as it had been, Nickless said. He and others said the old method did not always fully reflect drought conditions in some areas.
Under the new program, a county’s total dryland hay production for a year would be compared to a 30-year average. If production falls below the average, a producer could be paid for losses, depending on his coverage level, Nickless said.
“We’re hoping there will be some participation out there,” he said, noting that interest in the old program grew each year.
George Hammond is among those who have participated. The Big Horn County farmer and rancher said he considers the changes a “step in the right direction” and is interested in buying coverage under the new program to see how it works.
“I look at it as a luxury, with rangeland, to be able to insure it and manage it,” he said.
A telephone message left for the Wyoming Stock Growers Association was not immediately returned Monday.
Steve Pilcher, executive vice president of the Montana Stockgrowers Association, said having options for managing risks is important. But he said it will be interesting to see how well accepted the new program is, given past glitches.
Pilcher said that inconsistent information on yields and the drought’s effect previously meant that some ranchers who had losses weren’t compensated.
“If you can insure against drought in areas, I would think that people would take a hard look at it,” Pilcher said. “But again, we have to make sure that if it is taken as an insurance policy against drought and these people don’t get a crop of grass or any other crop they will get compensation for that.
“If not, even if it is economical, it would be a waste of money.”
Guzman likens pilot programs to document drafts and said officials expect there will be changes along the way.
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