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“On the ranch we have not had significant rainfall to grow grass in the last two years. As a result, everything on the ranch is basically barren,” he said.
Porter said he has been buying feed since December 2009 for his herd due to dry conditions, saying “it’s been a significant drain on the pocketbook.”
Porter said he has had to sell off some of his herd. He said the policy “would help offset some of the cost of feeding and help us manage the drought.”
The problem is that satellite information — which counts all “biomass” including trees and weeds in its greenness index — indicates New Mexico is green even though ranchers are facing severe drought, said Matt Rush, executive director for the New Mexico Farm and Livestock Bureau.
New Mexico ranchers have paid $1.64 million in premiums and have received only two payouts totaling $2,007, according to USDA’s Risk Management
The Risk Management Agency, which oversees the program, says the policies are not drought insurance; rather, they are “insuring a decline in the vegetation/greenness index,” Michelle Bouchard, a spokeswoman with the agency, told the Journal. The policies are sold by private insurance companies.
Porter showed the Journal a handout from a presentation given to a group of ranchers in Estancia in July 2010 that used the term “drought insurance” in its title. The presentation was given by a private insurance company, but a USDA agent was present, Porter said.
Bouchard acknowledged that, "it's a very confusing, highly technical insurance product. That's why we have disclaimers."