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| Where are you located? Is it really that difficult a concept that in areas that have high variabilities in soil types or practices(such as irrigation) that it might make sense to implement a policy that will maximize all acres independently and not rely on an avg together? For instance, let's say this year that you have 1/2 irrigated corn and 1/2 dryland. Your APH for the irrigated is 175 and your APH for the dryland is 125. This year your irrigated made 200, and your dryland made 25. In that scenario, with enterprise units, your avg would be 112.5. Your avg APH is 150. So, you will get paid on 37.5 bu on all your acres. Now, with optional units, you will get paid on 100 bu on half your acres, or 50 bu on all your acres, so, the advantage is to optional units. This also works if you have a unit that say, floods, which may be more likely to have periodic losses than the rest of the operation. Will it pay to have the different coverage? That depends. It's up to the producer to work it out. | |
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I don't understand the rationale behind selecting optional unit crop insurance?
