Hemp Not Automatically Eligible for New USDA Coronavirus Relief Program

Hemp producers may be eligible if they can prove they’ve experienced at least a 5% price decline between January and April and face additional marketing costs due to COVID-19.

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May 22, 2020

The U.S. Department of Agriculture (USDA) has announced a coronavirus relief program for producers, but hemp is not one of the crops automatically eligible for the program. 

Hemp producers may be eligible, however, if they “believe they’ve suffered a 5% or greater price decline between January and April 2020 and ... face additional marketing costs due to COVID-19,” the USDA says on its website.

This wasn’t the case when the USDA released specifics of its Coronavirus Food Assistance Program earlier in the week, when it said hemp and tobacco would not be permitted to argue their case for eligibility, says Eric Steenstra, the president of Vote Hemp. Steenstra says the USDA excluded hemp because the department found hemp prices had not suffered a 5% decline from January to April.

“We’re not sure that’s correct, and furthermore, it doesn’t seem right that they should leave hemp out,” Steenstra says. “We’re definitely disappointed to see how hemp is being treated by the USDA in this case.”

The USDA has since rescinded that barrier, and hemp producers may now be eligible if they can prove a 5% price decline in that period.

The program will provide up to $16 billion in direct payments to farmers and ranchers impacted by the coronavirus. Funding for the payments comes from the Coronavirus Aid, Relief, and Economic Stability (CARES) Act and the Commodity Credit Corporation Charter Act. 

Farmers will receive a one-time payment based on the commodities they produce. 

Other commodities that are not automatically eligible include sheep more than two years old, eggs/layers, soft red winter wheat, hard red winter wheat, white wheat, rice, flax, rye, peanuts, feed barley, Extra Long Staple (ELS) cotton, alfalfa and forage crops.

The USDA will begin taking applications from agricultural producers through the Farm Service Agency (FSA) from May 26 until Aug. 28.

Hemp producers who want to be considered must submit comments on regulations.gov, which outlines the full instructions for what information should be included. “The most helpful and informative information for consideration by USDA is information that describes how the decline in price was determined and documentation of the sources used to make this determination,” the USDA says on the public comment docket.

The USDA says to consider three questions when submitting comments (though the comments do not have to be limited to answering only these questions):

  1. “What commodities not listed have suffered a 5-percent-or-greater price loss between January and April 2020 and face additional marketing costs due to COVID-19?

  2. “What was the price received per unit of measure sold the week of January 13 through January 17, 2020, (or if not available, the nearest to this date) and what is the basis for the determination of this price?

  3. “What was the price received per unit of measure sold the week of April 6 through April 10, 2020, (or if not available, the nearest date to this) and what is the basis for the determination of this price?”

The USDA says it is “particularly interested in obtaining information” regarding nursery products, aquaculture products and cut flowers.

The USDA will consider comments on additional commodities by June 22.