Vegetation Index Basic Concept
Jul 6, 2010
Q: What are some of the basic concepts of the Vegetation Index Pasture, Rangeland, Forage (VI-PRF) Insurance Program?
A: The Vegetation Index is an area insurance plan, and is based on Earth Resources Observation Systems (EROS)
Normalized Difference Vegetation Index (NDVI) data, using an approximate 4.8-mile square grid. Producers can
select one or more, three month time periods in which NDVI data is important during the growth and production
of the forage species. These time periods are called Index Intervals. Insurance payments to a producer are
calculated based on the deviation from normal NDVI within the grid and index interval(s) selected.
It is critical that producers review the historical indices for their grid ID to determine how well the
past results correspond to their past observations.
Q: What does NDVI mean?
A: Normalized Difference Vegetation Index, which is a multi-spectral satellite image that records changes in "greenness" of vegetation on the surface of the earth.
Q: Can I just insure the acreage where my best improved grasses are grown or do I have to insure all of my pastures?
A: You may choose to insure grazing land, hay land, or both. You are NOT required to insure 100 percent of the
crop type's insurable acres in the county.
Q: Can my pastureland be insured for grazing in one year and for haying the next year?
A: The crop type and associated insurance can vary from year to year and this determination will be based on the
intended use; however, if you change crop types, intended use, and insured acres, you must contact your
insurance agent to make the appropriate changes to your policy, prior to the acreage reporting date.
Q: Are there a minimum number of acres which I can insure?
A: No. However there are minimums and maximums that can be insured in any one interval.
Q: Can I insure my hay land that I plant to a forage crop each year?
A: No. You cannot insure acreage with annual plantings. However, there are provisions that allow overseeding into an established perennial pasture.
Q: If I establish an improved forage pasture, how long do I have to wait until I can insure these acres?
A: The policy states that land is insurable as long as it is not initially planted to a forage crop after
July 1 of the previous crop year, unless allowed by the special provisions. For example, the land could be
insured in 2010 if planted before July 1, 2009.
Q: Is overseeding into established acreage of existing forage crops, which are not planted annually,
an acceptable farming practice and not considered as an annual planting?
A: Yes. Overseeding into established existing forage crop acreage, which are not annually planted, is an
acceptable practice in the Vegetation Index PRF Insurance Program.
Q: Can my Farm Service Agency (FSA) maps be used to determine acreages for my policy?
A: Yes, FSA maps and records are acceptable for determining insurable acreages for your policy.
Q: Will I be able to insure my Conservation Reserve Program (CRP) land?
A: Acreage enrolled in other types of USDA programs is not eligible. Also, due to the fact that CRP programs prohibit
grazing and haying, land in a CRP program is considered uninsurable acreage.
Q: Can I insure the waterways around my row crop fields that I hay for my livestock?
A: Yes, if it is declared as hayland, and you intend to hay the acreage during the upcoming crop year.
Q: Can I insure my grazing land that is located within a city limit or within a deed restricted area?
A: Yes, if it can legally be used for grazing and you intend to graze the acreage during the upcoming crop year.
Q: How do I determine the value per acre of my grazing land?
A: You may select a value for your grazing/hay land that is between 60 and 150 percent (protection factor) of the
county base value per acre, depending on your costs/revenue expectations for your grazing/hay land.
Q: Will the value be the same for all of the grazing land in my county?
A: Yes, county base values are determined and provided on a county basis; they will not change for each grid.
Q: What is the protection factor and why is it included in the program?
A: A percentage factor selected by you that allows you to individualize your coverage based on the productivity of the
crops you produce and may be between 60 and 150 percent. Only one protection factor may be selected per county and crop type.
Q: Will the county base value of a grid be changed from year to year?
A: The county base value will be updated when grazing land and hay land values within an area change. It is anticipated that these values will be updated or evaluated on a periodic base of three to five years, not yearly.
Q: If my grid has a loss, how will I be notified of my loss?
A: Based on your policy, your insurance company will automatically send you an indemnity payment once the final grid index
is determined and if the final index value is below your trigger grid index, assuming all qualifications of the policy are fulfilled. Once published, you can check on the RMA web site for official final index values.
Q: Does the vegetation index predict forage production on each insured's operation?
A: The vegetation index does not explicitly predict forage on a given producers operation. Instead, the index is simply a reflection of how the greenness of the vegetation has changed over the given 3-month interval for a specified grid, declared by the producer, relative to a long term average for the same interval and grid. Research indicates that the NDVI index is highly correlated with forage production, but does not directly predict forage production.
Q: What is the trigger grid index?
A: It is the result of multiplying the expected grid index by your selected coverage level.
Q: How many years have NDVI records been kept that will be used to determine the average NDVI Index for this insurance?
A: USGS/EROS has kept records since 1989 which are used in calculating the "normal" NDVI index for each interval.
Q: What is a grid index?
A: A calculated value utilizing each grid's current and historical NDVI data for each grid ID and index interval.
The index is expressed as a percentage.
Q: Where are the origins of the grid ID system?
A: USGS/EROS reports the NDVI data in 1 x 1 km grids, which are aggregated to 8.0 x 8.0 km grids (4.8 x 4.8 miles).
The current grid size is utilized, to capture changes in NDVI/forage on a scale smaller than the county level but large
enough to prevent individuals from influencing the value.
Q: Will I have to provide the grid ID numbers to my agent, or will he or she be able to help me
A: You can determine the grid ID yourself, or your agent will be able to help you locate them. It is recommended that during the application, the agent be involved to ensure you meet all the policy requirements.
Q: If I have five pastures located several miles apart, will I be able to insure them separately, or will I have to put them all together?
A: It depends, if they are in different grids they will have to be insured in the grid in which they are located.
Q: If an applicant has non-contiguous acreage which is located in separate grids, can he/she opt to use one point of reference for all the acreage and use only one grid ID?
A: No. A point of reference must be selected for each separate, non-contiguous acreage of the crop that is located in the county. If the non-contiguous acreage is located in separate grids, each non-contiguous acreage must have a separate grid ID.
Q: Can all contiguous acreage of the crop type be combined into a single grid ID using one point of reference for all of the acreage, including acreage that extends into an adjoining numbered grid or county?
A: All contiguous acreage of the crop type may be combined into a single grid ID using one point of reference for all
of the acreage, including acreage that extends into an adjoining numbered grid or county.
For more information on grid selection and grid identification, refer to the Vegetation Index Insurance
Q: Can a new application be accepted at anytime the first time an insured applies?
A: New applications must be submitted prior to the sales closing date as outlined in the actuarial documents for the given crop year.
Q: Will I have to supply fertilizer records or other management records if I have a loss?
A: No. Individual inputs and records are not required. Losses and indemnities are determined by the final index values.
Q: Does the website servicing the Vegetation Index PRF Insurance Program require internet access and can the information only be used electronically?
A: The Vegetation Index PRF Insurance Program system has been developed as an interactive website that a user can navigate to collect information and establish a grid ID. The system also allows screen printing, including the maps and grids. Contact your approved agent for available options.
Q: With the written approval of the insurance provider, may the insured assign rights to an indemnity
payment to someone else for the current crop year?
A: Yes. The insured may assign rights to an indemnity payment to another party for the current crop year.
Q: Do I have to select more than one interval if I get most of my grazing in only one?
A: You may select only one interval if you feel that one interval alone best represents your annual production.
For more information regarding these programs, please contact
a qualified crop insurance agent.
For more information regarding the contents of this page, please contact