The "Enterprise" insurance unit
Farm and Ranch December 7, 2010 The new Federal Crop Insurance combo policy for wheat that began this fall contained a new option for insurable units. Dave Paul, with the regional office of USDA’s Risk Management Agency says it is called the “enterprise unit.“ Paul: “And Congress basically authorized through recent legislation that we would provide a further subsidy if the producer elected to group all of their wheat in a county into one insurance unit. And the subsidies are much greater. For example, at the 75% coverage level the typical subsidy, the producer pays 45% of the total premium bill. The federal tax subsidy is 55%. If a producer put all his property in an enterprise unit the subsidy is 77%. The producer would only pay 23% of the premium bill. Basically they give up that individual field coverage but what they can is an opportunity to perhaps buy more coverage on a whole crop basis to keep their coverage real high, keep it affordable, in case of severe disaster or crop loss.” Paul says the enterprise unit can be especially attractive in years where price is the greatest risk. Paul: “Like in 2009 we had a $4.09 price decline in the insurance. That would have been a terrific year to have an enterprise unit. We paid everybody. There was no yield loss.” I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on Northwest Aginfo Net. ?
