That's precisely how I've understood things work.
Furunculus: Global as in your clan yeah. As for which region gets hit, I'm not sure. For me it was always one where the local food supply was negative. That's ok as long as the global is above 0, but not when the global is negative.
I basically have two region modes.
1. Farm + Market only. Relatively low investment - High economic return.
2. Castle, Dojos and encampment/smith/lodge/proving grounds only. This is best on borders obviously, since it not only gives you excellent recruitment capability, but also insane levels of replenishment, in addition to the free garrison and defenses in the event of a siege.
I deviate from this standard in the province I use as my ninja-farm, i.e. a region with ninja clans. And this might not be feasable early in the campaign when you have three regions obviously.
Gah! Ninja'd! How apropos :p
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