Unit structure affects discounts in crop insurance. Prevented Planting situations can require more planning to ensure you are able qualify for your anticipated unit structure. The three main unit structures are Enterprise Units (EU), Basic Units (BU), and Optional Units (OU). Each have there own qualifying factors. Knowing your situation can make a world of difference when it comes to premium and indemnity payments.
An Enterprise Unit consists of all insurable acreage of the same insured crop in the county in which you have a share. To qualify, at least two sections within the county must have planted acres that constitute at least 20 acres or 20% of the acreage in the Enterprise Unit (20/20 rule). You can aggregate multiple sections to get meet qualifications. A Basic Unit consists of all insurable acreage of the same insured crop in the county on a share by share basis. To qualify for a Basic Unit Discount, you must plant a measurable amount of acreage (only planted acres are used to determine unit discounts). An Optional Unit consists of all insurable acreage of the same insured crop in the county on a share and section (or section equivalent) basis.
What Crops Qualify for Enterprise Unit Structure?
In this situation, corn easily qualifies for an Enterprise Unit. There is more than two sections with 20 or more acres planted.
On a normal year, with no PP in section 12, there would be 20 acres available for soybeans to qualify for an enterprise unit. Because of the high amount of PP, only 5 acres in that section were planted. Although 145 acres of soybeans were planted in section 2, there are not enough planted acres in another section to qualify for an Enterprise Unit. In this situation you may want to consider planting soybeans to another field to qualify for an Enterprise Unit or elect a different unit structure.
Wheat would qualify for an Enterprise Unit Structure. Section 1 has 40 acres planted. In section 12, there are 10 acres and in section 11 there are 17 acres planted. Because there are more than three sections planted to wheat, sections 11 & 12 can be aggregated, leaving you with a total of 27 acres of wheat to qualify you for an enterprise unit.
Each Prevented Planting situation is unique. Talk with your agent or give us a shout and make sure you are qualifying for the appropriate unit structure. For more information or full details on Prevented Planting visit RMA’s website.