USDA Announces Hemp Crop Insurance For 2020

Last year’s passage of the 2018 Farm Bill changed the way that the federal government treats hemp and paved the way for the Federal Crop Insurance Corporation to create policies to insure hemp crops.

The 2018 Farm Bill defines hemp as cannabis that contains 0.3 percent or less of the psychoactive cannabinoid tetrahydrocannabinol (THC).

The United States Department of Agriculture’s (USDA) Risk Management Agency (RMA) announced on Tuesday that certain industrial hemp growers will be eligible to obtain insurance coverage under the Whole-Farm Revenue Protection (WFRP) program for 2020.

WFRP Coverage will apply to hemp grown for fiber, flower, and seeds, and will be available for producers who are in areas covered by USDA-approved hemp plans or participating in state or university research pilot programs.

Coverage is currently available to producers who are part of a Section 7606 state or university research pilot program established under 2014 Farm Bill rules.

Other producers will have to wait until a USDA-approved plan is in place to obtain coverage.

“Numerous producers are anxious for a way to protect their hemp crops from natural disasters,” said RMA Administrator Martin Barbre. “The WFRP policy will provide a safety net for them. We expect to be able to offer additional hemp coverage options as USDA continues implementing the 2018 Farm Bill.”

WFRP provides up to $8.5 million in coverage for all commodity revenue produced on a farm and is a popular protection measure for specialty crops, organic commodities, and non-traditional crops.

To be eligible for WRFP coverage, hemp producers must operate in compliance with state, tribal, or federal production regulations and have a contract for the purchase of the insured industrial hemp.

According to WRFP provisions, hemp with THC content above acceptable levels cannot be considered an insurable cause of loss.

Hemp does not qualify for replant payments under WFRP.

USDA’s Agricultural Marketing Service (AMS) is in the process of creating regulations for hemp production and a process for submitting state, territorial, or tribal plans to the Department.

When USDA has completed the rule-making process, the Farm Service Agency (FSA), the Natural Resources Conservation Service, and other USDA agencies will share eligibility information for their safety net, conservation, farm loan, and disaster assistance programs.

FSA will also be looking into additional coverage options through its Noninsured Crop Disaster Assistance Program and via RMA-issued crop insurance.