Program Overview
The Pasture, Rangeland and Forage – Rainfall Index Crop Insurance (PRF-RI) crop insurance program is a single-peril, area-based policy from the USDA Risk Management Agency (RMA). The policy pays an indemnity when the rainfall index for a grid, provided by NOAA's Climate Prediction Center (CPC) and the National Centers for Environmental Information (NCEI), falls below the coverage level selected. The payment is based on the measured rainfall in the grid where the insured land is located, not on own-level farm production or losses.
The PRF-RI insurance program has been available in South Dakota since 2013, and some South Dakota producers have used its payouts to protect their operation from the risks of forage loss when rainfall falls below the local average.
The payout record has been favorable: from 2016 to 2024, South Dakota producers, on average, received about $86 in indemnities for every $100 of total premium- a loss ratio of 0.86 (Cho and ShalekBriski, 2026). Producers do not pay that full premium because 51–59% of premiums are subsidized depending on the coverage level. Therefore, producers paid under $49 out of pocket for premiums (at the 90% coverage level), so each $1 paid returned about $1.75 in payouts, on average. Even with that benefit, only about 38% of the state's forage land was insured in 2026 (Figure 1; USDA RMA, 2026).
Selecting Coverage
To enroll in the PRF-RI insurance program, producers must select a coverage level, a productivity factor, and bi-monthly intervals to be covered, creating a customized bundle of coverage. Table 1 summarizes three categories in which producers must make decisions when selecting PRF-RI coverage.
| Category | Choice Options | Notes |
|---|---|---|
| Coverage Level (%) | 70%, 75%, 80%, 85%, and 90% |
|
| Productivity Factor | 60 – 150%, in 1% increments | Adjusts the protection amount based on the field’s productivity relative to the county base value. |
| Interval Selections | 11 bi-monthly intervals (Jan–Feb, Feb–Mar, …, Nov–Dec) |
|
The number of possible bundles is very large, which may contribute to decision fatigue. Producers may respond by avoiding enrollment or by choosing more intuitive coverage selections that are easier to evaluate but may not fully align with their risk-management goals.
For 2026, PRF-RI premiums are subsidized at rates that vary by coverage level: 59% for the 70% and 75% coverage levels, 55% for the 80% and 85% coverage levels, and 51% for the 90% coverage level. For more information, please visit USDA RMA website.
One intuitive strategy is to choose coverage selections that are expected to generate higher indemnity payments. Under the current subsidy policy, this strategy may be a reasonable choice. Even when producers select the highest coverage level of 90%, the maximum productivity factor of 150%, and two of the driest bi-monthly intervals, such as January–February and November–December, the expected indemnity payments are more than the producer-paid premiums. However, if the premium subsidy rate decreases or premium subsidies are eliminated, producers would pay more and receive lower expected net payouts (Cho and Diersen, 2026).
PRF-RI program is an insurance program for risk management. To protect against financial losses in forage production caused by a lack of precipitation, producers may spread their interval selections across the months when forage production or grazing occurs. The productivity factor should also be adjusted to reflect the productivity of the insured pastureland relative to the county base value provided by RMA.
Last Note
The sales closing date for PRF-RI insurance in South Dakota is December 1 of the calendar year 2027. These figures are for educational purposes only; talk with a crop insurance agent to choose the intervals, coverage level, and productivity factor that fit the operation. For more information, please refer to the USDA’s Pasture, Rangeland, Forage Pilot Insurance Program guidance document.
References
- Cho, W., and M. Diersen. 2026. Effectiveness of the Pasture, Rangeland, and Forage Rainfall Index (PRF‐RI) Program: Interval Selections With Uniform Premium Subsidy Rates. Applied Economic Perspectives and Policy.
- Cho, W., and A. ShalekBriski. 2026. Linking rainfall index variability and program performance: implications for Pasture, Rangeland and Forage-Rainfall Index program. Agricultural Finance Review.
- USDA NASS. 2026. Quick Stats.
- USDA RMA. 2026. Summary of Business.
Funding Acknowledgement
This work is supported by the North Central Extension Risk Management Education Center, project award no. 16719 from the National Institute of Food and Agriculture, U.S. Department of Agriculture.
