USDA Announces Hemp Farmers Can Acquire Federal Crop Insurance

While the 2018 Farm Bill made hemp legal, hemp farmers have been struggling to access the same services and amenities that other crop farmers have access to, such as crop insurance. An announcement made by the U.S. Department of Agriculture (USDA) is bringing hope to a category of hemp farmers who will be able to purchase federal crop insurance starting with the 2020 growing season.

The USDA announcement specifically refers to hemp farmers who are licensed to grow the crop under the pilot programs introduced in the 2014 Farm Bill. Unfortunately, farmers who were licensed to grow hemp under the 2018 Farm Bill will have to wait a little longer before they can get the same crop insurance.

The USDA insists that hemp farmers licensed under the 2018 Farm Bill will only buy federal crop insurance once the USDA releases the rules under which states will get approval for their hemp cultivation programs.

The farmers growing industrial hemp under the pilot programs authorized by the 2014 Farm Bill will access insurance from the Whole-Farm Revenue Protection program of the USDA. This program can only insure farmers’ revenue up to a maximum of $8.5 million.

However, there is a catch to this crop protection. It only applies to industrial hemp farmers whose crop is for flower, fiber or seeds.

Martin Barbre, the Administrator of the Risk Management Agency (RMA) of the USDA, said in a press release that the federal crop insurance provides an additional safety net because many farmers already have some form of insurance for their industrial hemp fields.

The USDA also revealed that even if the rules it is formulating are released, the Whole-Farm Revenue Protection program will only apply to industrial hemp whose THC content doesn’t exceed 0.3 percent. This means that any farmer whose crop is tested and found to exceed that legal limit will not be eligible for coverage for the resultant loss once the crop is destroyed.

The long-awaited USDA hemp rules will help to clarify a lot of issues, and the pressure applied on the federal government to speed up the rulemaking process is clearly justified. That pressure has also started paying off.

For example, the Federal Credit Union Administration recently announced that credit unions are free to service hemp businesses without any fear of federal action against them. The Environmental Protection Agency is also in the final stages of approving pesticides that can be used during the cultivation of industrial hemp.

It is possible that all these steps may have taken longer if pressure hadn’t been mounted upon all those agencies to act quickly. A case in point is how the DEA has dragged its feet since 2016 on the matter of licensing additional entities to grow and manufacture research-grade marijuana. The agency has only indicated it is taking action after pressure was mounted by lawmakers and one of the license applicants went to federal court to compel the DEA to explain how far it has gone in processing those applications.

As for industrial hemp farmers, experts believe that industry actors like Green Hygienics Holdings Inc. (OTCQB: GRYN) and Hemptown USA are glad that the first step in offering crop insurance has been taken by the federal government.

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