RMA’s Success Story – A Family’s Risk Mitigation Strategy Provides Farming Safety Net
American farmers and ranchers like Rick Wise know the importance of producing quality food for the table as well as for livestock. And they know the value of risk management to ensure they can provide year after year.
The Wise family has been farming in Pennsylvania since 1837. Mr. Wise owns 700 acres in Jefferson and Clearfield counties, where he and his sons grow wheat, corn and oats, among other crops. But it is the hay, alfalfa and pasture land that they grow that are the core of their business, because the family farm annually averages about 140 to 160 Angus cows. Mr. Wise takes pride in producing quality cattle each year and works very hard to ensure that his crop productions are at the average yield or better.
The Risk Management Agency (RMA) administers the federal crop insurance program as a tool for American farmers and ranchers to plan for smart growth and economic sustainability as part of their risk management strategies. Apart from individual crop production policies, there are specific policies for livestock risk protection as well as forage protection. These policies form the basis for a sound farm safety net.
Part of Mr. Wise’s risk management strategy to ensure his family can continue to farm year after year has been to purchase federal crop insurance. He recently bought forage production insurance due to the unpredictability of rainfall. RMA has a few insurance options for pasture, rangeland and forage, commonly called PRF, for ranchers to choose from. The Rainfall Index policy is based on weather data collected and maintained by NOAA’s Climate Prediction Center. The index reflects how much precipitation is received relative to the long-term average for a specified area and timeframe. The Forage Production Index is based on is based on NASS county level hay yield data (all hay or alfalfa hay). The index reflects how much hay is produced relative to the long-term trend for the county. Mr. Wise likes that his insurance policy allows for him to also insure his pastures, which he considers to be a very important part of his operation. Mr. Wise points out that with the rainfall based insurance he is able to spread his risks out over the entire year.
According to Mr. Wise, his family has exercised several risk management strategies and he hopes that they can continue to lead by example. He is confident that his business will continue to be successful in view of this crop safety net, and his sons will continue to be able to farm based on the steps he’s taken to insure against risks.
To find out more about crops or livestock insurance, visit RMA’s web site.