USDA Reveals Details Of Hemp Producer Risk Management Programs

The United States Department of Agriculture (USDA) has released details regarding two programs designed to protect hemp producers’ crops in the event of a natural disaster.

On Thursday, February 6, the USDA announced the availability of coverage under the Multi-Peril Crop Insurance (MPCI) hemp pilot program and the Noninsured Crop Disaster Assistance Program (NAP).

MPCI offers coverage against loss of yield for hemp grown for grain, fiber or CBD while NAP insures against losses associated with low yields, crop destruction, and prevented planting in places where permanent federal crop insurance programs are not available.

The application deadline for both the MPCI and NAP programs is March 16, 2020.

MPCI coverage is available to eligible hemp producers in select counties 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.

Information regarding eligible counties is available via the USDA Risk Management Agency’s online Actuarial Information Browser.

“We are pleased to offer these coverages to hemp producers,” says Farm Production and Conservation Undersecretary Bill Northey. “Hemp offers new economic opportunities for our farmers, and they are anxious for a way to protect their product in the event of a natural disaster.”

To qualify for the MPCI pilot program, a producer must have at least one year of hemp growing experience and have a contract to sell insured hemp.

Growers must possess a hemp grower’s license and comply with state, tribal, and federal regulations or operate under a university or state research pilot program under the 2014 Farm Bill.

The minimum amount of land required is five acres for cannabidiol (CBD) and twenty acres for hemp grain and fiber.

Hemp does not qualify for replant payments or prevented plant repayments under MPCI.

Pilot program insurance coverage, as well as revenue protection for hemp, are available under the Whole-Farm Revenue Protection insurance plan.

Hemp will be insurable under the Nursery Crop insurance program and the Nursery Value Select pilot crop insurance program beginning in 2021

Both programs require hemp to be grown in containers under federal, state, or tribal regulations and under the terms of the crop insurance policy.

NAP coverage against loss of hemp grown for fiber, grain, seed, or CBD is available for the 2020 crop year in places where there is no permanent federal crop insurance program.

NAP offers 50/55 coverage at 55 percent of the average market price for crop losses exceeding 50 percent of expected production.

Buy-up coverage for 50 to 65 percent of expected production is also available in certain cases under the 2018 Farm Bill in 5 percent increments at 100 percent of the average market price.

The service fee for app NAP coverage levels is $325 per crop or $825 per county, not to exceed $1,950 for producers with farming interests in more than one county.

Hemp with delta-9 tetrahydrocannabinol (THC) levels exceeding the federal statutory compliance limit of 0.3 percent is not eligible for NAP or MPCI coverage.

To comply with federal and state law enforcement, producers are required to report hemp acreage after planting to the Farm Service Agency.