In addition to type of product and coverage level, growers have to decide the level of aggregation of insurable units, with a brief description of the choices being the following (check your crop insurance agent for more important details and requirements): 1) optional units — smaller divisions of basic units such as individual farm numbers or sections and/or dividing up your cotton into separate insurable practices like dryland versus irrigated; 2) basic units — all the owned and cash rented farmland in the county that is planted to the same crop, and separately all the share rented farmland in the county that is planted to the same crop; 3) enterprise units — combination of all the owned, cash rented or share rented farmland in the county that is planted to the same crop; 4) whole farm units — combination of all the insurable acres in the county of at least two crops. These unit descriptions are presented in increasing order of aggregation. All things being equal, the cost of the insurance will decrease as you combine into higher levels of aggregation (because you are bearing more yield risk at higher levels of aggregation). Similar to the choice of coverage levels, growers may want to at least price the cost of higher levels of aggregation to lower insurance premiums that will greatly inflated by high projected price levels and volatility..
Welcome to the educational website of Dr. John Robinson in the Department of Agricultural Economics at Texas A&M University.
The website focuses on farm-level implementation of strategies for Texas cotton growers to deal with yield and price risk. Contact me to receive a weekly e-mail notice of when the latest edition is posted on-line. In addition, we provide daily crop market news and commentary on Twitter (@aggie_prof) and also on the Master Marketer facebook page. We welcome your feedback and interaction in these social media.