USDA Announces New Crop Insurance Option For Hemp Growers

The United States Department of Agriculture’s (USDA) Risk Management Agency (RMA) on Monday announced a new crop insurance option that is being made available to hemp farmers in select counties in 21 states in 2020.

The pilot insurance program will make Actual Production History (APH) coverage available under 508(h) Multi-Peril Crop Insurance (MPCI) for eligible farmers in Alabama, California, Colorado, Illinois, Indiana, Kansas, Kentucky, Maine, Michigan, Minnesota, Montana, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Tennessee, Virginia, and Wisconsin.

MPCI coverage will be available for grain, fiber, or cannabidiol (CBD) oil during the 2020 crop year and is in addition to the Whole Farm Revenue Protection pilot program for hemp growers that was announced in August.

“We are excited to offer coverage to certain hemp producers in this pilot program,” says RMA Administrator Martin Barbre. “Since this is a pilot program, we look forward to feedback from producers on the program in the coming crop year.”

To qualify for the MPCI program, hemp producers must comply with relevant federal, state, and tribal regulations, have a minimum of one year of experience growing the crop, and have a contract to sell the insured hemp.

Additionally, producers are also required to be a part of a Section 7606 state or university research pilot program under the 2014 Farm Bill or possess a license from a federal, state, or tribal program authorized under the USDA Agricultural Marketing Service interim rule, which was issued in October of 2019.

Under the 2018 Farm Bill, hemp is defined as cannabis that contains 0.3 percent delta-9 tetrahydrocannabinol (THC) on a dry weight basis.

According to MPCI provisions, hemp that contains more THC than federal policies permit will not constitute an insurable cause of loss.

Under MPCI, hemp does not qualify for replant payments or prevented plant payments

At the start of the 2021 crop year, hemp will be insurable through the Nursery Crop Insurance Program and Nursery Value Select pilot crop insurance program.

The insurance programs will cover hemp that is grown in containers in compliance with federal, state, and tribal regulations as well as the terms of the crop insurance policy.

The USDA says that more information on the MPCI pilot program will be available in 2020.

Hemp producers can find a list of crop insurance agents at USDA Service Centers across the United States as well as through the Department’s online RMA Agent Locator.