USDA Announces Expansion, Other Improvements to Hemp Crop Insurance

USDA Announces Expansion, Other Improvements to Hemp Crop Insurance

The 2018 Farm Bill reclassified hemp — making it legal to grow industrial hemp. USDA’s Agricultural Marketing Service (AMS) outlined how states and tribe plans enable producers to grow hemp in those areas. Recently, the USDA announced expansion of Multi-Peril Crop Insurance, or MPCI, available to producers in certain counties.

The pilot insurance program provides Actual Production History coverage for eligible producers in certain counties in Alabama, Arizona, Arkansas, California, Colorado, Illinois, Indiana, Kansas, Kentucky, Maine, Michigan, Minnesota, Montana, Nevada, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin.

Producers can purchase coverage if they have a contract for the purchase of the insured hemp and meet all applicable state, tribal, and federal regulations. Crop insurance provisions state that hemp having THC above the 0.3 compliance level does not constitute an insurable cause of loss. Additionally, hemp does not qualify for replant payments or prevented plant payments.

During the 2021 crop year, hemp will be insurable under the Nursery crop insurance program and the Nursery Value Select pilot crop insurance program. Under both programs, hemp will be insurable IF grown in containers and in accordance with federal regulations, any applicable state or tribal laws, and terms of the crop insurance policy.

USDA Expands Pilot Insurance for Hemp

The USDA expands the pilot Multi-Peril Crop Insurance (MPCI) plan for hemp. “We are pleased to expand the hemp program and make other improvements for hemp producers,” stated USDA’s Risk Management Agency (RMA) Administrator Martin Barbre. “Hemp offers exciting economic opportunities for our nation’s farmers, and we are listening and responding to their risk management needs.”

The changes included:

  • Expanding the program:
    • New states included: select counties in Arizona, Arkansas, Nevada and Texas
    • New counties (13) in states with existing coverage: Conejos, CO; La Plata, CO; Moffat, CO; Routt, CO; San Miguel, CO; Kenton, KY; Whitley, KY; Houghton, MI; Granite, MT; San Miguel, NM; Valencia, NM; Scott, TN; Alleghany, VA
  • Allowing broker contracts for hemp grain
  • Adjusting program, reporting, and billing dates:
    • Sales closing, cancellation, production reporting and termination dates adjusted to match dates of similar crops
    • Acreage Reporting Dates adjusted based on regional final planting dates
    • Premium billing dates for all states changed to August 15

FSA Acreage Reports

Hemp producers are required to file acreage reports with FSA, which includes these steps:

  • Obtain a hemp production license or authorization number issued by USDA, state, or tribe.
  • File an acreage report with FSA, including the license or authorization number and identifying each field or subfield where hemp is planted. These fields could be referred to as a “lot” and includes greenhouses.
  • Identify the intended use of the reported hemp acreage:
  • Fiber – used for cloth, pressed plastics, ropes, animal bedding, paper, biofuel, packaging, concrete additives, spill cleanup.
  • Cannabidiol (CBD) – grown for extraction of plant resin, which includes CBD and other phytocannabinoids to be extracted from the flower. Subject to FDA regulations, resin may be used in oils, lotions, cleansers, bath or other pharmaceutical or topical products.
  • Grain – used for hemp hearts, crushed seed oil (not CBD), protein supplements (human or animal consumption)
  • Seed – used for propagation stock, hybrids (non-human consumption)

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