Last week, the United States Department of Agriculture’s (USDA) Risk Management Agency (which oversees federal crop insurance), announced the availability of whole-farm “coverage for hemp grown for fiber, flower or seeds” for the 2020 grow year. This coverage will be available to hemp producers who are in areas covered by USDA-approved hemp plans or who are part of approved state or university research pilot programs. Other producers cannot obtain coverage until a USDA-approved plan is in place.
A “Whole-Farm” policy insures all commodities on a farm, under one policy, against unavoidable natural causes of loss (e.g., hurricanes and other natural disasters). This type of coverage is most often seen with specialty crops and organic products. The coverage period is the duration of the grower’s tax year. More information on the program can be found here.
The 2018 Farm Bill amended the Controlled Substances Act to address how industrial hemp is to be defined and regulated at the federal level, and those modifications cleared the way for the Federal Crop Insurance Corporation to offer policies for it. The Farm Bill defines hemp as containing 0.3 percent or less tetrahydrocannabinol (THC) on a dry weight basis.
USDA’s Agricultural Marketing Service (AMS) is formulating regulations that will include specific details for both a USDA plan and a submission process for state plans. AMS expects to release the rules later this year. For more information on hemp production click here.
While the inclusion of hemp in whole-farm coverage is a significant step forward, there is still a long way to go before growers have the benefit of fully developed hemp crop insurance. Our legal team is committed to the hemp and CBD industry and is available to assist hemp growers, breeders, processors and retailers, in all stages of development.
Please contact us to schedule your FREE consultation today!