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Unit Structure

Per the Crop Insurance Handbook, all insureds automatically qualify for basic units without exceptions.  At the very least, an insured will have one basic unit for a crop in which they have a share.  Below are unit options explained further in detail based off of definitions found in the USDA Crop Insurance Handbook.  Units must be selected on or before the ARD.  Units can only be converted AFTER the acreage reporting date if RICS determines the requirements for units other than basic units are not met. For more on unit structure click here.

Basic Units (BU)

A basic unit is all insurable acreage of the insured crop in the county on the date cover begins for the crop year in which the insured has:

A. 100% Share in the crop.  This could be cash rented land that you are farming 100%, or as owner/operator of land.

B.  Less than 100% Share in the crop. This is land owned by one person and operated by another person on a share basis.

          Note:  A crop shared with different landlords, tenants, or sharecroppers is a separate basic unit.  

          Example 1.  You own all of the land you farm.  You will have one basic unit.

          Example 2.  If you have 3 different farming operations – one you own 100%, one you crop share Farmer A at 50%, and one you crop share with Farmer B at 50%. You will need 3 basic units.

Optional Units (OU)

Land that would otherwise be considered basic units can be further divided into optional units if it qualifies.  OUs are available by the following order of precedence.

A. Section

  • If you have acres in different section numbers, these can be different optional units.   These are measured under a rectangular survey system of a tract of land usually one square mile and containing approximately 640 acres.

B. Section Equivalents 

  • In some areas of some states, other methods of measured are used in place of sections.  If these units are legally measured and are at least 640 acres, they can be considered a section equivalent.

C.  Separate FSA FN’s 

  • Optional Units are available by separate FN’s in the absence of sections.  If you farm somewhere where sections exist, you cannot use separate farm numbers as reason for optional units.

D. Separate Irrigation Practices

  • Irrigated and non-Irrigated acres in the same section may allow optional units if the insured can provide an acceptable production report and there are clear and discernible breaks in planting patterns.

Enterprise Units (EU)

Enterprise units consist of all insurable acreage of the same insured crop in the county in which the insured has a share.

Enterprise units must elected on or before sales closing date, and must be written and signed by the insured on an application or on a policy change form.  The EU election is continuous so it remains in effect from year to year unless canceled, even if the acres do not qualify for EU in a current crop year.

To qualify for an EU, all of the following must apply:

1. The EU must contain all of the insurable acreage of the same insured crop in the county. 

2.The acreage in the enterprise unit must be located in:

          a. two or more sections

          b. two or more section equivalents if sections aren’t available

          c. two or more FSA FNs if the above two options are not available

3. The acreage in the two sections, section equivalents, or FNs must be the lesser of 20 acres or 20 percent of the           crop acreage.

Calculation for qualifying for NFAC EU:

Total acres = 57 (7+10+40) 20 percent of total acres = 11.4 (57 x .20)

Section 15 with 7 acres and section 34 with 10 acres aggregated together (7+10=17) meets the 20 percent requirement.

Section 36 with 40 acres is greater than 20 acres and also greater than 20 percent. The requirement of two or more sections with 20 acres/20 percent is met.

If planted acres do not qualify for EU by the 20/20 rule, a unit structure will be assigned to them. If the insured has an optional unit structure and the acres qualify for optional unit, the OU will apply.  If OU needs are not met, the acres will be assigned basic units.

Whole Farm Units (WU)

Whole farm units consist of all insurable acreage or all insured crops planted in the county.  This is the least common option.

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