The U.S. Department of Agriculture (USDA) announced on Tuesday that hemp farmers operating under pilot programs authorized through the 2014 Farm Bill are now eligible for federal crop insurance for the 2020 planting season, while those who cultivate hemp under broader federal legalization in the 2018 version of the legislation can obtain coverage after regulations are developed.
Producers who are growing hemp through a research program via the 2014 bill’s provisions can obtain Whole-Farm Revenue Protection (WFRP), an insurance program that covers up to $8.5 million in revenue. Only farmers producing hemp for fiber, flower or seeds will qualify.
“Numerous producers are anxious for a way to protect their hemp crops from natural disasters,” USDA Risk Management Agency (RMA) Administrator Martin Barbre said in a press release. “The WFRP policy will provide a safety net for them. We expect to be able to offer additional hemp coverage options as USDA continues implementing the 2018 Farm Bill.”
The latest version of agriculture spending legislation, which President Trump signed into law in December 2018, federally legalized hemp and its derivatives, but USDA said it must still develop regulations under that bill before extending coverage to all applicable hemp businesses.
USDA emphasized that cannabis containing more than 0.3 percent THC will not be covered under the plan and added that “hemp will not qualify for replant payments under WFRP.”
The notice also stated that USDA’s Agricultural Marketing Service (AMS) is “formulating regulations that will include specific details for both a USDA plan for the production of hemp and a process for submission of state, territorial or tribal plans to USDA.” Those regulations will be published in the Federal Register by the year’s end, the department said.
“Once rulemaking is complete, RMA, the Farm Service Agency (FSA), the Natural Resources Conservation Service and other USDA agencies will share eligibility information on their programs, which include safety net, conservation, farm loan and disaster assistance programs. This includes FSA looking at additional coverage options through its Noninsured Crop Disaster Assistance Program and through RMA-administered crop insurance.”
On Monday, Agriculture Secretary Sonny Perdue said in a meeting with farmers in Virginia that his department will be “working on the data as quickly as possible” to formulate the hemp crop insurance program.
A separate USDA site describes the types of regulations AMS is developing, which includes THC testing mechanisms, policies for the disposal of plants, annual inspections and law enforcement compliance.
Since the passage of the 2018 Farm Bill, lawmakers have put significant pressure on federal agencies to implement regulations for the crop and its derivatives such as CBD. And in recent weeks, several agencies have followed through on those requests.
For example, the Federal Credit Union Administration announced earlier this month that credit unions are allowed to service hemp businesses. And last week, the Environmental Protection Agency said it is reviewing applications for pesticides to be authorized for use on the plant.
Senate Majority Leader Mitch McConnell (R-KY) has paid particularly close attention to the crop insurance issue. Despite coverage being guaranteed through the Farm Bill, he inserted language into disaster relief legislation in May that also secures insurance options for hemp farmers.
A bipartisan coalition of senators also introduced a bill in July that would provide broader marijuana businesses with access to federal property, casualty and title insurance coverage.
Written by: Kyle Jaeger