USDA pilot program makes hemp crops eligible for insurance

The U.S. Department of Agriculture has announced that hemp farmers in 21 states will be eligible for crop insurance next year, including some in Pennsylvania.

USDA’s Risk Management Agency (RMA) will handle the pilot insurance program designed to provide Actual Production History coverage under Multi-Peril Crop Insurance (MPCI) for eligible producers in certain counties in Pennsylvania. Department officials said the list of eligible counties will be announced in early 2020.

The MPCI coverage is for hemp grown for fiber, grain or CBD oil for the 2020 crop year. The insurance option is in addition to the Whole-Farm Revenue Protection coverage available to hemp growers that was announced earlier in 2019.

“We are excited to offer coverage to certain hemp producers in this pilot program,” said Martin Barbre, RMA’s administrator. “Since this is a pilot program, we look forward to feedback from producers on the program in the coming crop year.”

The 2018 Farm Bill amended the Controlled Substances Act to address how industrial hemp is defined and regulated at the federal level, clearing the way for the Federal Crop Insurance Corporation to offer policies for hemp.  The Farm Bill defines hemp as containing 0.3% or less tetrahydrocannabinol (THC) on a dry-weight basis.

To be eligible for the MPCI pilot program, hemp growers must comply with state, tribal, or federal regulations for hemp production, have at least one year of history producing the crop and have a contract for the sale of the insured hemp. Producers also must be a part of a state or university research pilot, as authorized by the 2014 Farm Bill, or be licensed under a state, tribal, or federal program approved under the USDA Agricultural Marketing Service interim final rule issued in October.

Provisions in the MPCI state that hemp having THC above the federal legal level will not constitute an insurable loss.