USDA issues new crop insurance program for 2020 hemp production season
USDA officials in December released information covering a new pilot crop insurance program for hemp producers in selected areas.
The USDA’s Risk Management Agency is now offering new options for the protection of hemp crops that will provide Actual Production History coverage under 508(h) Multi-Peril Crop Insurance for eligible producers who are producing fiber, grain, and flowers.
According to the RMA, Section 508(h) of the Federal Crop Insurance Act requires that the Federal Crop Insurance Corporation, or FCIC, publish any policies, rates, or provisions of policies that are approved by the agency’s board. They are also required to make those policies available by other FCIC-reinsured companies.
Contracted insurers that have been approved by the USDA and that have agreed to participate in federally insured crop insurance programs are the typical sellers of Multiple Peril Policies. The insures then distribute the policies through independent agencies like Ag Risk Management and Insurance of Apache, Ok and Chickasha, OK. Those agencies collect premiums, issue policies and then pay the claims.
In a statement from the RMA, Administrator Martin Barbre says “We are excited to offer coverage to certain hemp producers in the pilot program.”
Feedback will be vitally important to the agency as this is a pilot program.
“Since this is a pilot program, we look forward to feedback from producers on the program in the coming crop year.”
RMA Admistrator Martin Barbre
Qualifying States
Hemp producers in select counties in the following states have been approved to be offered the Multi-Peril Crop Insurance program:
In addition to Oklahoma there is:
- 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 the 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 the 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. Therefore, cannabis will not be offered coverage under these hemp insurance programs.
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 these current federal hemp insurance programs, hemp will also be insurable under the nursery crop insurance program, as well as 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.
