Insured Information Security Policy 1 Introduction to Rain and Hail... 1 Company Directory... 2

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1 Table of Contents i Table of Contents 2016 Pasture, Rangeland, Forage and Apiculture Rainfall/Vegetation Index Training Manual PUBL_1306_06_09_15 For the electronic version of this manual, please visit: Insured Information Security Policy 1 Introduction to Rain and Hail... 1 Company Directory Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index... 3 Rainfall Index Eligible States and Counties... 4 Rainfall Index Available in the Following States and Counties... 5 Program Overview... 5 Advantages for Producers... 6 Disadvantages for Producers... 6 Important Dates... 6 Underwriting Guidelines... 7 Crop Information... 9 Index Background... 9 Program Basics Pasture, Rangeland, Forage (PRF) and Apiculture (API) Vegetation Index Vegetation Index Eligible States and Counties Vegetation Index Available in the Following States and Counties Program Overview Advantages for Producers Disadvantages for Producers Important Dates Underwriting Guidelines Crop Information Index Background Program Basics Annual Forage Rainfall Index Annual Forage Rainfall Index Plan RH 5081 Rainfall Index (RI) and Vegetation Index (VI) Application/Cancellation/Transfer/Policy Change/Acreage Reporting Form PRF Processing Procedure PRF Processing Procedures Web Services/Resources Quoting Options Quick Analyzer User Interface Unit Details Coverage Analyzer User Interface Detail Panel Pasture, Rangeland, Forage and Apiculture Rainfall/Vegetation Index Training Manual

2 ii Table of Contents 7 Claims and Quality Control Rainfall Index Claims Rainfall Index Quality Control Requirements Vegetation Index Claims Vegetation Index Quality Control Requirements Rainfall Index and Vegetation Index Basic Provisions RIVI Rainfall and Vegetation Index Plan Common Policy RI-PRF FCIC Rainfall Index PRF Crop Provisions RI-API FCIC Rainfall Index API Crop Provisions VI-PRF FCIC Vegetation Index PRF Crop Provisions VI-API FCIC Vegetation Index API Crop Provisions RMA Ineligibility Amendment Rainfall Index Actuarial/Special Provisions Rainfall Index Actuarial/Special Provisions API Rainfall Index Actuarial/Special Provisions Vegetation Index Actuarial/Special Provisions PRF Vegetation Index Actuarial/Special Provisions API Vegetation Index Actuarial/Special Provisions Forms Rainfall Index (RI) and Vegetation Index (VI) Application/Cancellation/Transfer/Policy Change/Acreage Reporting Form (RH-5081) NCIS 920D Rainfall Index Disclaimer NCIS 930D Vegetation Index Disclaimer Rainfall Index Questions and Answers Pasture, Rangeland, Forage Rainfall Index Questions and Answers (Provided by RMA) Vegetation Index Questions and Answers Pasture, Rangeland, Forage Vegetation Index Questions and Answers (Provided by RMA) Rainfall Index and Vegetation Index Biology of the Crop Biology of the Crop (Provided by RMA) Marketing Materials Rainfall Index Marketing Materials Vegetation Index Marketing Materials Civil Rights Civil Rights Awareness Nondiscrimination Company Policy/Assurance Statement Public Notification Required Discrimination Complaints Rehabilitation Act of Title VII Civil Rights Communication Tools Reaching Limited Resource, Women and Minority Producers Ordering Information for Civil Rights Materials Office of Civil Rights

3 Never send communication to Rain and Hail which includes personal identifiable information for any person, including SSN, EIN, etc. Insured Information Security Policy Rain and Hail Insurance Service, Inc., and its Subsidiaries I. Purpose The purpose of this Insured Information Security Policy is to: (1) ensure the security and confidentiality of customer information; (2) protect against any anticipated threats or hazards to the security or integrity of the information; and (3) protect against unauthorized access to or use of the information that could result in substantial harm or inconvenience to any customer. This Policy applies to Rain and Hail Insurance Service, Inc., and all of its subsidiaries ( Rain and Hail ). II. Insured Information Security Risk Assessment and Existing Rain and Hail Procedures A. Rain and Hail specializes in providing and servicing crop insurance and other commercial agricultural risk protection insurance products. Rain and Hail does not provide or service life insurance, annuity contracts, or workers compensation coverages. B. All applicants are required to provide social security numbers and employer identification numbers as part of the application process. C. When third parties, including policyholders, agents and adjusters, submit sensitive information electronically, the information is protected both online and off-line. Rain and Hail uses encryption software and other security measures to protect from the loss, misuse, or alteration of sensitive information under our control. D. Rain and Hail limits employee access to personally identifiable information to those employees with a business reason to know such information. Rain and Hail educates its employees about the importance of confidentiality and customer privacy through standard operating procedures, special training programs, and our policies on ethics. Rain and Hail takes appropriate disciplinary measures to enforce employee privacy responsibilities. E. Rain and Hail does not reveal specific information about customer accounts or other personally identifiable data to parties outside its affiliated companies for independent use unless: (1) the customer requests or authorizes it; (2) the information is provided to help complete a transaction initiated by the customer; (3) the information is provided to a reputable credit bureau or similar information reporting agency; or (4) the disclosure otherwise is lawfully permitted or required. Rain and Hail does not provide account or personal information to non-rain and Hail affiliated companies for the purpose of independent telemarketing or direct mail marketing of any non-financial products or services of those companies. F. At times it is necessary for Rain and Hail to provide personally identifiable information about customers to a party outside its affiliated companies, such as to an insurance agent or adjuster who provides support or services for one or more of our products. These parties agree to safeguard our confidential information about our customers and our customers products and services with us and must abide by applicable law. G. Rain and Hail has implemented a Privacy Statement for its website and has an E-Business Implementation Plan, which addresses the proper handling of customer transactions. H. Based upon the types of risks that it insures and its existing procedures, Rain and Hail has determined that its precautions to protect insured information are commercially reasonable. III. Designation of Compliance Officer Rain and Hail hereby designates its Associate General Counsel/SIU Manager as the Policyholder Information Security Compliance Officer. IV. Detecting Violations If an employee detects any suspected violations of this Policy, the employee shall notify the Compliance Officer. In the event of a referral or notification, the Compliance Officer shall audit and investigate the circumstances of any such activity. Rain and Hail, through its Compliance Officer, will directly review and report any suspicious activities to the proper authorities as required. These controls and monitoring shall be in place on a daily basis. V. Independent Audit of the Insured Information Security Policy The Insured Information Security Policy shall be subject to audit, not less than annually, by Rain and Hail s internal auditor. The internal auditor shall annually report its findings as to compliance with this Insured Information Security Policy to Rain and Hail s audit committee as appointed by its Board of Directors and provide a copy of its findings to the Compliance Officer. VI. Training All employees shall be adequately trained and instructed with regard to Insured Information Security Policy. The scope of this training will be modified to suit the duties of individual employees. Such training will include: 1) proper handling of customer information that could arise during the course of the employee s duties, 2) instructions to contact the SIU if such violations of this policy are suspected, and 3) an explanation of the disciplinary consequences, including civil and criminal penalties, for non-compliance with this policy. The SIU officer at all times shall meet the qualifications and training required by the Federal Crop Insurance Corporation, the Risk Management Agency of the United States Department of Agriculture, and the Commissioner of Insurance of the State of Iowa. VII. Effective Date This program shall be effective June 30, (Rev. 5/11)

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5 1 1 Introduction to Rain and Hail 2 Company Directory Introduction to Rain and Hail

6 2 Section 1 Introduction to Rain and Hail Company Directory Midwest Division IA and MO 9200 Northpark Drive, Suite 200 Johnston, IA PH: FAX: Central Division IL, IN, MI and OH 7800 North Sommer Street, Suite 504 Peoria, IL PH: FAX: Southwest Division NM, OK and TX 2201 Civic Circle, Suite 604 Amarillo, TX PH: FAX: Northern Division MN, ND, SD and WI Two Carlson Parkway, Suite 255 Plymouth, MN PH: FAX: Great Plains Division CO, KS and NE F Street, Suite 213 Omaha, NE PH: FAX: Southern Division AL, AR, FL, GA, KY, LA, MS and TN 1951 Rosebud Road Grayson, GA PH: FAX: California Division AZ and CA 499 West Shaw Avenue, Suite 101 Fresno, CA PH: FAX: Northwest Division ID, MT, NV, OR, UT, WA and WY North 200 Mullan Road, Suite 111 Spokane, WA PH: FAX: Great Falls Service Office 300 River Drive North, Suite 2 Great Falls, MT PH: FAX: Atlantic Division CT, DE, ME, MD, MA, NH, NJ, NY, NC, PA, RI, SC, VT, VA and WV 3120 Highwoods Blvd., Suite 202 Raleigh, NC PH: FAX: Canadian Division AB, MB and SK 4303 Albert Street, Suite 200 Regina, SK S4S 3R6 PH: FAX: Corporate Headquarters 9200 Northpark Drive, Suite 300 Johnston, IA PH: FAX: ACE Agribusiness Farm & Ranch 9200 Northpark Drive, Suite 250 Johnston, IA PH: FAX: Commercial Ag 72 North Franklin Street P.O. Box P Wilkes-Barre, PA PH: Farm & Ranch, Commercial Ag Sun Center Drive Rancho Cordova, CA PH: FAX: Help Desk: Available Mon. - Fri. from 7:00 a.m. to 7:00 p.m. CST (All Inquiries) Available Sat. from 7:00 a.m. to 9:30 a.m. CST (General) 7:00 a.m. to 8:00 p.m. CST (LGM Only) Agency Support Unit All States PH: FAX:

7 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index 4 Rainfall Index Eligible States and Counties 5 Rainfall Index Available in the Following States and Counties 5 Program Overview 6 Advantages for Producers 6 Disadvantages for Producers 6 Important Dates 7 Underwriting Guidelines 9 Crop Information 9 Index Background 12 Program Basics 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index

8 4 Section 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index Rainfall Index Eligible States and Counties 2013 and Succeeding Crop Years - Pasturage, Rangeland, Forage Availability and Succeeding Crop Years - Apiculture

9 Section 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index 5 Rainfall Index Available in the Following States and Counties States PRF Counties API Counties Alabama All Counties All Counties Arkansas None All Counties California All Counties All Counties Colorado Adams, Alamosa, Arapahoe, Baca, Bent, Boulder, Chaffee, Cheyenne, Clear Creek, Conejos, Costilla, Crowley, Custer, Denver, Douglas, Eagle, El Paso, Elbert, Fremont, Gilpin, Grand, Gunnison, Huerfano, Jackson, Jefferson, Kiowa, Kit Carson, Lake, Larimer, Las Animas, Lincoln, Logan, Morgan, Otero, Park, Phillips, Pitkin, Prowers, Pueblo, Rio Grande, Routt, Saguache, Sedgwick, Summit, Teller, Washington, Weld and Yuma Florida All Counties All Counties Georgia All Counties All Counties Kansas All Counties All Counties Maryland None All Counties Minnesota All Counties All Counties Missouri All Counties All Counties Montana All Counties All Counties Nebraska All Counties All Counties New York All Counties All Counties North Carolina All Counties All Counties North Dakota All Counties All Counties Oklahoma All Counties All Counties Pennsylvania All Counties All Counties South Carolina All Counties All Counties South Dakota All Counties All Counties Texas All Counties All Counties Virginia All Counties All Counties Wisconsin All Counties All Counties Program Overview Perils Covered 1. Rainfall Index coverage is for a single peril, which is lack of precipitation. Coverage Levels 1. Percentages available: 70, 75, 80, 85 and 90 a. The insured may select only one coverage level for each of the insured crop types in the county. 1. For example, the insured could insure 90% for grazing and 80% for haying in same county. 2. Higher coverage levels reduce basis risk. a. This policy correlates closer to individual experience. Catastrophic Risk Protection (CAT) Not currently available Adams, Alamosa, Arapahoe, Baca, Bent, Boulder, Chaffee, Cheyenne, Clear Creek, Conejos, Costilla, Crowley, Custer, Denver, Douglas, Eagle, Elbert, El Paso, Fremont, Gilpin, Grand, Gunnison, Huerfano, Jackson, Jefferson, Kiowa, Kit Carson, Lake, Larimer, Las Animas, Lincoln, Logan, Morgan, Otero, Park, Phillips, Pitkin, Prowers, Pueblo, Rio Grande, Routt, Saguache, Sedgwick, Summit, Teller, Washington, Weld and Yuma 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index 2016 Pasture, Rangeland, Forage and Apiculture Rainfall/Vegetation Index Training Manual

10 6 Section 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index NAP Clarification 1. Producers can have both a PRF RI policy and a NAP policy and have losses incurred under both independently of each other. 2. Producers can obtain NAP on grazing crops (grazing) and RI on forage crops (haying) or vice versa, because they are considered separate crops by both RMA and FSA. Other Insurance 1. Unless otherwise specifically allowed by the Rainfall Index Crop Provisions or Special Provisions, an insured producer cannot insure the same crop type in the same crop year through any other federally subsidized crop insurance program in counties where they carry Rainfall Index coverage (except as noted below). If more then one policy has been written that covers the insured s share of the crop type, the policy with the earliest application date will be in effect. All later policies will be void. Penalties may be applicable as specified in the provisions of 7 CFR Section Exception: a. Rainfall Index insureds may insure the same crop in the same county and crop year under a Whole-Farm Revenue Protection (WFRP) policy. b. If allowed by the Special Provisions, an insured can have both an APH Forage Production policy and coverage under this policy (same acreage cannot be insured on both policies). Examples: 1. An insured can have an APH Forage Production policy on haying and insure grazing under this program in the same county. 2. An insured can have an APH Forage Production policy and insure all insurable acreage under that policy and then insure acreage that does not meet the minimum stand requirements under this program. Advantages for Producers 1. Flexibility Allows producers to tailor a program to their risk management needs by selecting coverage levels, index intervals, productivity factor and the number of acres to insure and allows producers to determine when precipitation is vital to plant growth. 2. Covers lack of precipitation The predominant peril to pasture and rangeland forage (a decrease in the precipitation or index would indicate a decrease from normal) 3. Provides for timely indemnities 4. Index intervals are mutually exclusive 5. No individual loss adjustments needed 6. Index is easy to understand 7. No production records are required 8. Moral hazard and adverse selection minimized Disadvantages for Producers 1. Individual losses/experiences not covered 2. Only covers a decline in precipitation Important Dates Sales Closing Date: November Only one sales closing per year a. Consistent with other programs SCD b. Minimizes possible forecasting and program abuse 2. Application must be submitted by sales closing date a. Insured must select the county, crop, plan of insurance (RI), type, level, productivity factor and dollar amount of protection per acre. 3. A Mandatory Disclaimer Form must be signed and dated for each RI crop being insured (See Section 8: Forms) The disclaimer is only required to be completed once, along with the new application.

11 Section 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index 7 Insurance Period 1. Rainfall Index crop year is 12 months and begins January 1 2. Acreage Reporting Date: November 15 a. Must file annually on insurance provider s form (such as RH-5081) b. The insured must report and certify by the acreage reporting date the insured acreage of the crop type in the county in which the insured has an interest, by share, for each grid ID and crop type. For these insured acres, the FSA farm number, FSA tract number and FSA field number must also be reported. If these numbers do not exist, the insured should request such numbers from the applicable FSA office. The insured must also report insurable acreage in the county by crop type and include percent of value on application. c. For apiculture, the insured must also report the total number of insurable colonies in the United States. d. Acreage on which the insured has failed to follow good farming/ranching practices as defined in the RI Basic Provisions for the insured crop will not be insured. e. Acreage altered or removed as criteria for participation in any other government program is not insurable. A revised acreage report must be submitted removing the acreage, if such acreage was previously reported as insurable. 3. Acreage reports can be corrected or revised prior to the ARD. After the acreage reporting date, corrections (e.g., 87 acres reported but should be 78) may be allowed at our discretion. 4. Premium Billing Date: September 1 a. Premium and administrative fees shall be due and payable 30 days after the premium billing date. 5. Contract Change Date: August 31st 6. Cancellation/Transfer: November 15th This is a continuous policy. 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index Underwriting Guidelines Share All acreage with the same share, index interval and crop type, regardless of name of other person(s) sharing in the crop, can be entered on a single line of the acreage report. Coverages Not Applicable The following coverage does not apply to Rainfall Index: 1. Hail and fire exclusion provisions 2. High-risk land exclusion provisions 3. Late planting provisions 4. Replant requirements 5. Replanting payment provisions 6. Prevented planting provisions 7. Experience adjustment factors 8. Optional units 9. Enterprise Units 10. Whole Farm Units 11. Production Reporting 12. Written agreements 13. Added county election (not applicable to pilots) Percent of Value 1. Insureds must allocate, on their application, a percent of value to each unit. The percent of value allows insureds with more than one unit to individualize their coverage within the requirements of the program. Using the percent of value, insureds can allocate a percentage of the total insured value to each selected index interval. 2. Regardless of how the total value is allocated between index intervals, the sum of the percentages for all index intervals, by grid ID, share and intended use, must equal 100 percent. 3. There may be a minimum and maximum percent of value that can be allocated to an index interval. See the crop provisions and actuarial documents for more information about minimum and maximum amounts that may be allocated Pasture, Rangeland, Forage and Apiculture Rainfall/Vegetation Index Training Manual

12 8 Section 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index Production Records and Yield History 1. Insureds are not required to report yield history or maintain production records for the Rainfall Index policy. However, they are encouraged to maintain any individual crop production records and acreage history for use or possible future use in a plan of insurance that uses APH yields for the same crop (e.g., APH Forage Production). 2. If a Rainfall Index insured returns to a plan of insurance that uses APH yields for the same crop types, his/her APH yield history database will be updated only if continuous crop production reports (including the period insured under Rainfall Index policy) are filed when returning to such a plan. Failure to file the most recent year s crop production report may limit the insured s choices. APH procedures will apply and can be referenced in the CIH. Insured and Insurable Acreage The insured is not required to insure 100% of acreage. 1. The insured acreage in the county is the acreage selected to be insured. 2. The insured acreage will not exceed 100% of the insurable crop acreage in the county. Insurable acreage is haying and grazing that is not planted annually (unless allowed by the Special Provisions). 1. Overseeding into acreage of existing forage crops is an acceptable farming practice and is not considered an annual planting. 2. Insurable acres consists of the total number of acres suitable for insurance, which includes both insured acres and acres of the crop type that are not insured. Insured Crop The insured crop will be the crop types in the county: 1. In which you have a share. 2. That is grown for the purpose of grazing, haying or apiculture crop production. 3. Located on insurable acreage in the county listed in the accepted application. 4. Intended for harvest by haying or grazing by livestock or honey production, collection of pollen, wax and bee breeding purposes and reported as such by the acreage reporting date. 5. That is produced on established acres or on annually planted acreage if allowed by the Special Provisions (such as, but not limited to, establishment of small grains and annual forage sorghums). 6. That is not initially planted to a forage crop after July 1 of the previous crop year (unless allowed by the Special Provisions). 7. You may choose to insure grazing, haying or both. The same acreage cannot be insured as both grazing and haying. If the insured acreage is intended to be utilized as both grazing and haying and meets the requirements of both crop types, the insured must choose one crop type under which to report the acreage. 8. You must determine the applicable grid IDs, crop types and percent of value no later than the sales closing date. 9. You must determine the number of insured acres and index intervals no later than the acreage reporting date. Rain and Hail will not insure any acreage: 1. That is not established forage (unless allowed by the Special Provisions) or is not intended for harvest by haying, grazing or apiculture crop production. 2. Where the crop is destroyed or put to another use during the crop year for the purpose of conforming with, or obtaining payment under, any other program administered by the USDA, such as, but not limited to, the Conservation Reserve Program. 3. That was initially seeded after July 1 of the previous year (unless allowed by the Special Provisions).

13 Section 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index 9 Crop Information (0088) Pasture, Rangeland, Forage Type Grazing (007) 1. Established acreage of perennial forage 2. Intended for grazing by livestock 3. Acreage must be suitable for grazing a. Acreage that is steeply sloped, too far from water sources, etc.; such that livestock would not normally physically graze on the acreage is not considered suitable for grazing. Haying (030) 1. Established acreage of perennial forage 2. Intended for haying 3. Acreage must be suitable for haying a. Acreage that is steeply sloped, covered by water, etc., such that it would be impractical or impossible to mechanically harvest the acreage is not considered suitable. 4. Program covers all types of grazing and haying forage (i.e., not just alfalfa) (1191) Apiculture 1. The raising and care of honey bees for agricultural crop production 2. Honey production, collection of pollen, wax and bee breeding purposes Type No crop types specified Index Background The index is based on reliable National Oceanic and Atmospheric Administration (NOAA) data. The technology is utilized as follows: The PRF-RI Pilot Program does not explicitly predict individual forage or production on a producer s operation. Instead, the index is simply a reflection of how much precipitation is received for a specified weather grid s given two-month interval relative to the long-term average for the same interval grid. Research indicates that precipitation is highly correlated with forage production but does not directly predict forage production. Key components of the RI program include: 1. Basis for losses and payments are based on sub-county level known as a Grid ID. 2. Daily collected precipitation data is mathematically interpolated into weather grid nationwide a. Each grid is approximately 12 x 12 miles in size 3. Same data used by a. U.S. Drought Monitor b. U.S. National Threat Assessment c. Palmer Drought Index d. CPC Soil Moisture Forecast Project 4. Precipitation is averaged over 12 x 12 mile weather grid a. Actual precipitation received on a given property may not reflect what is reported for the entire grid 5. Seasonal constrained rainfall index derived a. From data collected, processed and maintained by NOAA s Climate Prediction Center (NOAA data is sustainable indefinitely given the strategic nature of the data to national monitoring programs and USDA investment in the data gathering and processing). b. Daily rainfall data starts in 1948 and is updated daily for the entire U.S. c. Data undergoes rigorous quality control from over 15,000 weather stations reporting daily into the system. 6. Eleven intervals per year for each weather grid a. Each interval is two months in duration and cannot overlap b. Four-month requirement, so at least two index intervals must be selected c. Large variation in conditions between regions across the U.S. d. Best way to recognize and capture regional variations was to provide producers the most flexibility in managing their own rainfallinduced forage risks by selecting the period of the year that best reflects their conditions Pasture, Rangeland, Forage and Apiculture Rainfall/Vegetation Index Training Manual 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index

14 10 Section 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index 7. Index accumulates daily, with the daily precipitation events beginning on the first day of the specified interval through the last day of the same interval. 8. Accumulated values (inches) for each of the six intervals are stored by year for all years from 1948 to 2003, resulting in 56 accumulated precipitation values for each of the eleven intervals for each of the weather grids in the proposed study area. 9. The mean accumulated value is computed for each grid and interval for this 56-year period. The computation of the index involves calculating the percent of normal value using the following formula for each grid and interval: (Current Accumulated Rainfall Index = Average Accumulated Rainfall) 100 Average Accumulated Rainfall 10. Each night a computer system automatically logs onto the NOAA data site, downloads the precipitation data for each grid and updates the accumulated rainfall amounts for each weather grid. 11. At the end of each two-month interval, the same computers then compute the percent of normal value of the resulting index. 12. This value is then made available to insurance companies via RMA s website. Biology of the Crop (Provided by RMA) 1. Because the forage-based systems consist of predominantly perennial plants and often contain mixtures of different species, each with different growth habits and seasons, rainfall, adequate to maintain sufficient soil moisture to sustain plant growth, over extended periods is important to total annual production. 2. For this reason, the PRF Rainfall Index program requires that the crop be insured for at least two intervals or four months. Index is based on deviation from normal of accumulated rainfall during a given index interval 1. Little to no actual production data is available. 2. No scientifically consistent and sound methodology for measuring production for the crop without extensive field plots, manpower, etc. 3. The deviation from long-term normal rainfall during the index intervals is used to develop the index. 4. Rainfall has a high degree of correlation to forage production. Areas of insurance are grids grids (grids 12 x 12 miles); therefore, there can be multiple grids per county. 2. Provides for a consistent program across the United States. 3. Counties vary in size, but the grids do not, which average about six to eight NOAA 12 x 12 grids per county. 4. The grids allow for closer correlation to local precipitation variations than using entire counties as an index. 5. Grid size reduces basis risk vs. county size. 6. Allows for closer correlation to individual experience. 7. Grids will cross county and state lines. (See image below) PRF Grid Example for North Dakota

15 Section 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index 11 Multiple Index Intervals 1. Considered separate crop practices 2. Coverage available over 11 index intervals, in two-month increments, beginning with January 1 of the crop year. PRF Index Interval Start Date End Date Haying 030 January February Haying 030 February March Haying 030 March April Haying 030 April May Haying 030 May June Haying 030 June July Haying 030 July August Haying 030 August September Haying 030 September October Haying 030 October November Haying 030 November December PRF Index Interval Start Date End Date Grazing 007 January February Grazing 007 February March Grazing 007 March April Grazing 007 April May Grazing 007 May June Grazing 007 June July Grazing 007 July August Grazing 007 August September Grazing 007 September October Grazing 007 October November Grazing 007 November December API Index Interval Start Date End Date (997) No Type Specified (625) January February (997) No Type Specified (626) February March (997) No Type Specified (627) March April (997) No Type Specified (628) April May (997) No Type Specified (629) May June (997) No Type Specified (630) June July (997) No Type Specified (631) July August (997) No Type Specified (632) August September (997) No Type Specified (633) September October (997) No Type Specified (634) October November (997) No Type Specified (635) November December Index Intervals 3. Allows producers to appropriately design their coverage to match their local growth patterns and production seasons. 4. The two-month intervals provide for greater reaction to precipitation events and their deviation from normal (e.g., a dry Interval II is not countered by a wet Interval IV as they are independent of each other). 5. Minimizes dependency on subjective pre-determined estimated forage growing seasons. 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index 2016 Pasture, Rangeland, Forage and Apiculture Rainfall/Vegetation Index Training Manual

16 12 Section 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index 6. Maintains consistency across the country, while still allowing for regional and local variances by allowing individual freedom to select appropriate intervals. a. These intervals act as mini-insurance periods. 1. For example, indemnities payable on one interval are not dependent on results from other intervals. b. Index intervals are mutually exclusive. 1. One index does not affect the others. 2. All index intervals are rated separately. Insured must select at least two intervals. The two intervals do not have to be contiguous and they cannot overlap. 1. The purpose of the program is to insure annual forage production. a. Total annual forage production is influenced by precipitation in more than one two-month interval; therefore, producers are required to insure in more than one interval. 2. Maximum percentages are region specific based on growing season. The following statements are in the state/county actuarials for PRF Rainfall Index: 1. The minimum percent of value allowed in any one index interval by grid ID, intended use and share is 10 percent. The maximum percent of value that can be allocated to any one index interval by grid ID, intended use and share is specified in the Special Provisions. 2. Regardless of how the total value is allocated between index intervals, the sum of the percentages for all index intervals by grid ID, share and intended use, must equal 100 percent. Each scenario of each grid, index interval and coverage level combination is individually rated. 1. Minimizes adverse selection There is not an economic advantage of insuring in one scenario vs. another, thereby encouraging producers to select a scenario that best fits their operation. 2. Adequate data permits the individual rating, thereby allowing for the rates to accurately reflect the risks of each scenario. No requirement to insure 100% of acreage 1. Forage utilized in the annual grazing or hay cycle can be insured without insuring all acreage. 2. All acres within a property may not be productive (e.g., rocky areas, submerged areas). 3. Provides flexibility for the insured to design the coverage to his/her specific needs. 4. Because the program is an index program and other programs are not available, there is no opportunity to move production. Program supported via Internet 1. Provides the most efficient and effective way to deliver the program. 2. Allows access to the mapping tools that allow the user to locate his/her grazing areas and associated grid ID numbers. 3. Provides access to the historical rainfall indices. 4. Allows access to all relevant data, materials and tools associated with the program. Program Basics Terminology and Other Differences 1. Grid and grid ID in addition to county 2. Insurable and insured acres vs. planted acres 3. Index vs. yields 4. Web-based 5. Not required to insure 100% of acres 6. Must select two index intervals 7. Grid IDs, crop types, will be determined prior to the sales closing date 8. Acreage and index intervals will be determined by acreage reporting date

17 Section 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index 13 Basic Definitions County: May also include any acreage within a grid ID that crosses an adjoining county or state line where the acreage is contiguous. (See image below) County A County B Grid 3 C 140 Acres Grid ID Example for adjoining county or state Insurable Acreage: Haying and grazing that is not planted annually. 1. Overseeding into acreage of existing forage crops is acceptable. 2. Annually planted crops currently are not insurable. 3. Insurable acres will consist of the total number of acres suitable for insurance under the PRF Crop Provisions. 4. Includes both insured acres and uninsured acres. Insured Acres: The number of insurable acres selected to be insured by a producer. 1. May choose to insure either Grazing, Haying or both. (Insured may certify acres with FSA as haying but report them to crop insurance as grazing.) 2. Not required to insure 100% of the crop type(s). Unit: The insured acres within or assigned to a grid ID for each crop type and index interval. 1. If there are multiple grid IDs on a policy, the index values are not added together, as each unit and crop stands on its own. 2. Basic Units only no basic unit discount. County Base Value: Established production value, in dollars, of grazing and haying forage. 1. Only one value per county for each crop type. 2. RMA and the Contractor used U.S. Geological Survey land-cover estimates, regional experts and the following to establish grazing and haying county base values for each location: a. USDA Farm Service Agency Grassland Reserve Program prices for grazing b. National Agricultural Statistics Service for haying rates Productivity Factor: A percentage multiplier allowing the insured to individualize coverage based on their individual crop productivity. 1. Insured selects between 60% and 150%. a. Concept is the same as price election in GRP policies. b. Only one productivity factor may be selected per county and crop type. Dollar Amount of Protection per Acre: The county base value (CBV) per acre (determined by RMA), multiplied by the productivity factor (PF) (60% to 150% as selected by insured), multiplied by the coverage level (CL) (70% to 90% as selected by insured). 1. Example: a. $17.65 (CBV) 1.20 (PF) 0.85 (CL) = $18.00 per acre 2. Only one dollar amount of protection per acre for each county and crop type (Insureds cannot elect different levels or productivity factors for different grids within the same county). Policy Protection per Unit: Dollar amount of protection per acre, multiplied by the insured acres, multiplied by the producer s share of the unit for each grid. 1. Example: a. Amount of Protection/Acre = $18.00 (See calculation above) b. Insured Acres = 1,000 c. Share = 100% d. 50% Interval March April, 50% Interval June July e. Index Interval March April: $ acres 100% (share) = $9,000 f. Index Interval June July: $ acres 100% (share) = $9,000 Policy Protection: The sum of the policy protection per units ($18,000). 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index 2016 Pasture, Rangeland, Forage and Apiculture Rainfall/Vegetation Index Training Manual

18 14 Section 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index Index Definitions Index Interval: A specified period of time (Example: Apr - May) in which precipitation data is collected resulting in a grid index. Expected Grid Index: Based on the historical mean accumulated precipitation by index interval, expressed as a percentage; EGI = 100. Trigger Grid Index: The selected coverage level multiplied by the expected grid index. 1. How to calculate a Trigger Grid Index: Coverage Level = 85 and Expected Grid Index = 100; then Trigger Grid Index = 85 (Level x Expected = Trigger) 2. If the final grid index falls below the trigger grid index, the insured may be due an indemnity. Final Grid Index: Based on the current accumulated precipitation data for each index interval. The index will be available on the RMA website following the end date of each index interval. Rates and Premiums 1. Rates are the same for grazing and haying in the same grid and interval. 2. Premium subsidy by level is also located in the Special Provisions for the crop/county. Premium Subsidies and Fees Coverage Level Premium Subsidy Factor Administrative Fee $30 $30 $30 $30 $30 3. Formula for premium/unit (Index Interval) = $ amount of production/acre x insured acres/unit x premium rate x.01 x share % Grid ID Selection Grid ID: A specific code, typically five digits, associated with each grid. Point of Reference: A designated point, identifiable by longitude and latitude which can be used to identify a grid ID. 1. Selected by the insured. 2. Point that best represents the insured acreage. 3. This determines the grid ID for insurance. Certify the points of reference are representative of the acreage assigned to each grid ID and the amount of acreage in each grid ID(s). 1. Example: If the contiguous acreage is located in four grids, the acreage can be separated into two, three or four grids, or left all in one grid. 2. The same acres cannot be insured in more than one grid ID or county. Determine the point of reference and corresponding grid ID by the acreage reporting date.

19 Section 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index 15 Examples of Determining Grid ID(s) + (Plus sign represents point(s) of reference in the following examples, circled area represents the selected field.) Contiguous Acreage One Grid (See image below) 1. The insured picks one point of reference on the property. Grid 1 Grid 2 50 Acres Grid 3 Grid 4 2 Contiguous Acreage One Grid Contiguous Acreage Multiple Grids, Counties and/or States (Combined) (See image below) 1. The insured selects one point of reference in the contiguous acreage (may select Grid 1 or Grid 2). In this example, all 50 acres are insured in Grid 1. Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index Grid 1 Grid 2 50 Acres Grid 3 Grid 4 Contiguous Acreage Multiple Grids (Combined) 2016 Pasture, Rangeland, Forage and Apiculture Rainfall/Vegetation Index Training Manual

20 16 Section 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index Contiguous Acreage Multiple Grids, Counties and/or States (Separated) (See image below) 1. The insured selects one point of reference in each grid and assigns the number of acres contained in each grid. Thirty-five acres are insured in Grid 1 while 15 acres are insured in Grid 2. Grid 1 Grid 2 35 Acres 15 Acres Grid 3 Grid 4 Contiguous Acreage Multiple Grids (Separated) Determining the Grid ID(s) for Non-Contiguous Acreage (Multiple properties separated by roads, trees, other fields, etc) (See image below) 1. A point of reference must be selected for each separate, non-contiguous acreage. 2. The insured has two separate acreage locations in two grids. 3. The insured selects a point of reference in Grid 1 and a point of reference in Grid 4. These properties must be insured under their respective grid IDs. Grid 1 Grid 2 50 Acres Grid 3 Grid 4 50 Acres Non-Contiguous Acreage Located in Separate Grids

21 Section 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index In the next example, the insured has two separate acreage locations contained in three grid IDs. (See image below) 2. First, the insured selects a point of reference in Grid The insured has the option of combining the acreage in Grid 1 and Grid 2 or insuring the acres contained in each grid separately. The insured has elected to insure 35 of the 50 total acres in Grid 1 and the remaining 15 acres in Grid 2. Grid 1 Grid 2 35 Acres 15 Acres Grid 3 Grid 4 Contiguous Acreage Multiple Grids (Separated) 50 Acres 1. In the next example, the non-contiguous acreage is located in the same grid. (See image below) 2. The non-contiguous acreage is combined and given a single grid ID because it does not qualify for a separate unit. The 50 acres will be insured as a single unit. 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index Grid 1 Grid 2 25 Acres 25 Acres Grid 3 Grid 4 Non-Contiguous Acreage Located in Same Grid Review of Determining Grid ID(s) Type of Acreage Grid Information Guideline Contiguous Acreage Single Grid Choose one point of reference Contiguous Acreage Multiple Grids Combined Choose one point of reference Contiguous Acreage Multiple Grids Separated Choose one point of reference for each grid Non-Contiguous Acreage (Multiple Properties) Choose one point of reference for each separate, non-contiguous acreage in the county 2016 Pasture, Rangeland, Forage and Apiculture Rainfall/Vegetation Index Training Manual

22 18 Section 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index Grid ID Selection Test Grid 1 Total Ac: 150 Grid 2 B A 100 Acres 110 Acres 50 Acres County A County B Grid 3 Grid 4 Total Ac: 140 D C 100 Acres 120 Acres E 125 Acres 40 Acres Haying Topographical Map Topographical Map Determining Grid ID(s) Basic Steps 1. Primary step: a. Accurately identify the grid ID(s): A direct link to RMA s web-based tool is available on the specific crop page under the Rainfall/Vegetation Indices gateway page. This link will bring you to the default page for the map-driven grid ID locator for the Rainfall Index pilot programs for Pasture, Rangeland, Forage. The Apiculture Rainfall Index map-driven grid ID locator tool can be found on the same gateway page. 2. Type in the city and/or county name where the property is located. 3. Select the city or county from the possible matches. A topographical map for the area will be displayed. 4. Narrow the search by selecting an area near the actual location of the insured s property. 5. Once the applicant has located the general area, continue to refine the search by switching to the photo maps. 6. Using the topographical map, photo map or combination of both, choose an appropriate resolution for proper identification of the property boundaries and corresponding grid ID(s).

23 Section 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index 19 Photo Map 2 Photo Map Determining Grid ID(s) Additional Steps 1. Select one point of reference on the property by moving the cross marker (+) to that location. 2. The grid ID is listed at the top of the screen (and on the map itself). 3. A Print Icon is in the lower right-hand corner of the screen. 4. This printed map can be used as a record to verify the grid ID. 5. Once printed, the property boundary can also be outlined and initialed by the insured for verification purposes. 6. The insured must certify the point of reference. Determining Grid ID Using RHIGIS Grid IDs can also be found directly from RHIGIS. 1. Open the Layers tab under Preferences and the Rainfall Grid ID options will be displayed. Check the Rainfall box and click Save. a. Zoom to the desired location and see the applicable grid ID for that area (No point of reference tool). Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index RHIGIS 2016 Pasture, Rangeland, Forage and Apiculture Rainfall/Vegetation Index Training Manual

24 20 Section 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index Determining Grid IDs Example I.M. Insured has 645 acres of insurable grazing and haying in two counties. His insurable acreage is contained in five non-contiguous properties: A, B, C, D and E. (See image below) 1. Property A Property A contains 110 acres and is non-contiguous with the field that is in County B. Property A cannot therefore be insured in County B. The 110 acres fully contained in County A must be insured in County A. 2. Property B Contiguous acreage located in more than one grid (See image below) a. Insured decides to separate the property into two grid IDs, with 100 insured acreage in Grid 1 and 50 insured acreage in Grid 2 and selects a reference point in each grid ID. 3. Property C Contiguous acreage spread into more than one county, which contains two crop types (both grazing and haying with 50% share) (See image below) a. Insured selects a point of reference in County B and will use that point of reference to represent all the contiguous insurable grazing acreage (100 acres) in both County A and County B (decides not to insure haying). 4. Property D and E Non-Contiguous acreage located in a single grid (grazing with 100% share) (See image below) a. The insured combines Properties D and E and insures all 245 acres under Grid ID 4. Grid 1 Total Ac: 150 Grid 2 B A 100 Acres 110 Acres 50 Acres County A County B Grid 3 Grid 4 Total Ac: 140 D C 100 Acres 120 Acres E 125 Acres 40 Acres Haying Actual grid IDs will have five digits. Summary Example Insured Acreage, Grid ID, Coverage Level, Productivity Factor, Dollar Amount of Protection per Acre Grid ID Property Insured Acreage Grid 1 (insert the actual grid ID number for the insured, e.g., 37881) B 100 Grid 2 (insert the actual grid ID number for the insured, e.g., 37882) B 50 Grid 3 (insert the actual grid ID number for the insured, e.g., 38773) C 100 Grid 4 (insert the actual grid ID number for the insured, e.g., 38774) D and E 245 Total 495 I.M. Insured selects for grazing: 1. Coverage Level = 85% 2. Productivity Factor = 120% 3. County Base Value = $17.65 Dollar Amount of Protection per Acre $ = $18.00 per acre I.M. Insured designates a specific percentage of the insured acreage to at least two of the index intervals for each grid ID. He finds that he can place no more than 50% of his insured acreage to any one index interval.

25 Section 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index 21 The PRF Special Provisions list the following crop types and practices: Type(s) Haying 030 Haying 030 Haying 030 Haying 030 Haying 030 Haying 030 Haying 030 Haying 030 Haying 030 Haying 030 Haying 030 Grazing 007 Grazing 007 Grazing 007 Grazing 007 Grazing 007 Grazing 007 Grazing 007 Grazing 007 Grazing 007 Grazing 007 Grazing 007 Practice(s) January February Index Interval February March Index Interval March April Index Interval April May Index Interval May June Index Interval June July Index Interval July August Index Interval August September Index Interval September October Index Interval October November Index Interval November December Index Interval January February Index Interval February March Index Interval March April Index Interval April May Index Interval May June Index Interval June July Index Interval July August Index Interval August September Index Interval September October Index Interval October November Index Interval November December Index Interval 2 Pasture, Rangeland, Forage (PRF) and Apiculture (API) Rainfall Index Grid ID Index Interval Unit Number % Protection Number of Acres Grid Jan Feb % 50 acres Insured acreage = April May % 50 acres Total 100% 100 acres Grid Jan Feb % 5 acres Insured acreage = April May % 25 acres 632 Aug Sept % 20 acres Total 100% 50 acres Grid Jan Feb % 50 acres Insured acreage = Aug Sept % 50 acres Total 100% 100 acres Grid Jan Feb % acres Insured acreage = April May % 73.5 acres 631 July Aug % 49 acres Total 100% 245 acres Interval selections do not have to be contiguous, but the selected index intervals cannot contain any month in more than one index interval Pasture, Rangeland, Forage and Apiculture Rainfall/Vegetation Index Training Manual