USDA issues new crop insurance program for 2020 hemp production season

Federal agriculture authorities on Monday unveiled a new pilot crop insurance program for hemp producers.

The Risk Management Agency of the U.S. Department of Agriculture (USDA) is offering a new option for protecting hemp crops that will provide Actual Production History coverage under 508(h) Multi-Peril Crop Insurance for eligible producers growing fiber, grain and flower.

Section 508(h) of the Federal Crop Insurance Act requires the Federal Crop Insurance Corp. (FCIC) to publish any policy, rate or provision of a policy approved by the agency’s board and make such policies available by other FCIC-reinsured companies, according to the RMA.

Multiple Peril policies are typically sold by contracted insurers that have agreed to participate in federal crop insurance programs and have been approved by the USDA. The insurers distribute the policies through independent agents that collect premiums, issue policies and pay claims.

“We are excited to offer coverage to certain hemp producers in this pilot program,” RMA Administrator Martin Barbre said in a statement from the agency.

“Since this is a pilot program, we look forward to feedback from producers on the program in the coming crop year.”

The Multi-Peril Crop Insurance (MPCI) pilot program will be offered to farmers in select counties of 21 states for the 2020 production season:

• Alabama
• California
• Colorado
• Illinois
• Indiana
• Kansas
• Kentucky
• Maine
• Michigan
• Minnesota
• Montana
• New Mexico
• New York
• North Carolina
• North Dakota
• Oklahoma
• Oregon
• Pennsylvania
• Tennessee
• Virginia
• Wisconsin

Qualifying for insurance

Eligibility for the MPCI pilot program and other USDA-administered programs will require that hemp producers are:

• Compliant with applicable state, tribal or federal regulations for hemp production.
• Experienced with hemp, having produced the crop for at least one year.
• Under contract for sale of the insured hemp crop.
• Licensed under a state, tribal or federal program approved by the USDA under the interim final rule for federal hemp production, or part of a state or university research pilot program authorized by the 2014 Farm Bill.

The MPCI program will not cover hemp crops that exceed federal acceptable limits of 0.3% total THC.

The new pilot crop insurance coverage is offered in addition to the Whole Farm Revenue Protection coverage plan the agency introduced to hemp producers in August for the 2020 season.

More coverage coming for container-grown hemp

In addition to current federal hemp insurance programs, hemp will be insurable under the nursery crop insurance program and the Nursery Value Select pilot crop insurance program starting in the 2021 crop year.

Under these two programs, hemp producers growing the crop in containers will be eligible for insurance as long as they are compliant with state, tribal and federal regulations.

More details about the USDA-RMA programs are available here.