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USDA: Hemp Farmers Can Purchase Federal Crop Insurance for Next Year’s Planting Session

Cathy Nickel

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USDA: Hemp Farmers Can Purchase Federal Crop Insurance for Next Year’s Planting Session
  • Federal crop insurance for hemp farmers would provide coverage for up to $8.5 million in revenue.
  • Multiple government agencies are working to establish regulations for hemp businesses to follow under the 2018 Farm Bill.

Even with the passing of the Farm Bill, there are many hemp farmers that struggle to get the same services as any other business. According to an announcement from the US Department of Agriculture (USDA), these farmers presently running under pilot programs can now gain access to federal crop insurance. The insurance will be active for the 2020 planting season for farmers authorized through the 2014 Farm Bill. Farmers who cultivate hemp through the 2018 Farm Bill will be able to secure the same coverage, but not until official regulations are created.

The 2014 Farm Bill authorized farmers to take part in a researcher program for hemp at the time. These farmers will have access to an insurance program called Whole-Farm Revenue Protection, which covers no more than $8.5 million in revenue. However, to qualify, the farm must be growing hemp for the purpose of its fiber, flower, or seeds.

Martin Barbre, the USDA Risk Management Agency (RMA) Administrator, said in a press release that there are many producers already working to protect their hemp crops from unforeseen circumstances, like natural disasters. This new insurance offers a “safety net,” as Barbre state.

He added:

“We expect to be able to offer additional hemp coverage options as USDA continues implementing the 2018 Farm Bill.”

The newest version of the bill, which was signed into law in December 2018, made hemp and its derivative legal. However, the USDA has continually stated that regulations must be established under the bill before all hemp businesses have coverage. The plan will not cover any cannabis that exceeds 0.3% THC, and “hemp will not qualify for replant payments under WFRP.”

The notice indicated that the Agricultural Marketing Service (AMS) is presently working to create regulations that would have “specific details” regarding hemp production and “a process for submission of state, territorial or tribal plans to USDA.” The department will get these regulations to the Federal Register for publication before the end of 2019.

After these regulations are established, eligibility information will be shared between all USDA agencies regarding “safety net, conservation, farm loan and disaster assistance programs.” Their information will also include opportunities for hemp farmers to receive coverage under the Noninsured Crop Disaster Assistance program and via crop insurance with the RMA. Sonny Perdue, the Agriculture Secretary, stated that his department is working quickly to develop this hemp crop insurance program.

Lawmakers have been putting pressure on the various federal agencies since the Farm Bill was passed last year, aiming to establish regulations for hemp and hemp-based CBD. In the last few weeks, there’s finally been movement by several agencies, like the Federal Credit Union Administration, which announced permission for credit unions to service hemp businesses. The Environmental Protection Agency, on the other hand, is working to process applications for pesticides to be authorized to treat hemp crops.

Mitch McConnell, the Senate Majority Leader, added new language to disaster relief legislation a few months ago, ensuring that hemp farmers have insurance option. A bill in July, introduced by a coalition of senators, could ultimately offer access to federal property, casualty and title insurance coverage to marijuana businesses, if it passes.

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