USDA Announces Pilot Insurance Coverage for Hemp Growers

USDA Announces Pilot Insurance Coverage for Hemp Growers

The program will provide Actual Production History coverage for eligible producers in 21 select states.

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January 3, 2020

The U.S. Department of Agriculture (USDA) has announced a new crop insurance option for select hemp growers in 2020.  

The pilot insurance program will provide Actual Production History (APH) coverage under 508(h) Multi-Peril Crop Insurance (MPCI) for eligible producers in select counties in 21 different states: 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.

A USDA spokesperson says the department will announce the select counties later in January. 

APH policies insure producers against yield losses due to natural causes, like weather-related damages, insects and disease. The policy will not protect against crop losses due to hemp that contains more than the legal 0.3% tetrahydrocannabinol threshold. Hemp also will not qualify for replant payments or prevented plant payments under MPCI.

The newly announced coverage is for hemp grown for fiber, grain or CBD oil for the 2020 crop year. 

“We are excited to offer coverage to certain hemp producers in this pilot program,” said RMA Administrator Martin Barbre in a news release from the USDA’s Risk Management Agency (RMA). “Since this is a pilot program, we look forward to feedback from producers on the program in the coming crop year.”

To be eligible for the MPCI pilot program, among other requirements, a hemp producer must comply with the applicable regulations for hemp production, have at least one year of experience producing the crop and have a contract for the sale of the insured hemp. Producers also must either be a part of a pilot program under the 2014 Farm Bill, or be licensed under a program approved under the USDA interim final rule issued in October. 

Earlier this year, the USDA also announced that Whole-Farm Revenue Protection coverage is available to hemp growers. 

More insurance options for hemp growers are coming up the pipeline as well. In 2021, 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 all applicable regulations.

Some hemp producers have publicly praised the USDA’s new insurance option.

“The U.S. Department of Agriculture gave hemp farmers a huge Christmas gift this holiday season by creating a new kind of crop insurance for hemp producers in 21 states, just in time for the coming crop year,” said Bruce Perlowin, CEO of Hemp Inc., in a news release. “The new crop insurance option for hemp growers is a groundbreaking program because it brings hemp closer to other commodity crops and reduces risks for producers.”

The USDA says more information on the MPCI pilot will be available in the coming weeks. 

Crop insurance is sold and delivered solely through private crop insurance agents. A list of crop insurance agents is available at all USDA Service Centers and online at the RMA Agent Locator.