When lawmakers passed the legalization of hemp under the 2018 Farm Bill, they did not expect hemp farmers to face challenges when securing crop insurance for the plant.
The Senate Majority Leader, Mitch McConnell (R-KY) who said that the United States farmers are left out of the lucrative hemp industry, championed hemp legalization.
The panel raised questions about the possibility of covering the hemp plant through the United States Department of Agriculture during the House of Agriculture Committee hearing.
Chairman Collin Peterson (D-MN) asked the undersecretary for farm production and conservation, Bill Northey, how he was going to come up with an insurance product for the hemp plants.
In response, Bill Northey said that while it is a bit challenging coming up with an insurance product that represents the risks of growing hemp, and its pricing; farmers and other stakeholders have shown undying interest in the capitalization of the hemp crop since its legalization in 2018.
In another written testimony, Bill Northey said that the 2018 Farm Bill’s significance was to provide hemp farmers with useful management options such as insurance.
A ranking member of the committee, Rep. Mike Conaway, said that the legalization of hemp has “opened a Pandora’s box” because during the drought season, the crop’s THC level rises and if it goes above 0.3, which is the legal percentage, the plant would be illegal; meaning, the federal government or the insurance companies would be covering an illegal product.
Chairman Collin Peterson’s interest in the rollout of hemp legalization is visible despite his negative view of the feasibility of the plant’s insurance. During his visit to Kentucky, the Chairman held talks with the Kentucky agricultural commissioner.
In an interview with Minnesota Public Radio last year, Peterson said that he was considering growing hemp on his farm after the legalization of hemp through the Farm Bill. He said that the crop has a vast market since the United States exports hemp to countries such as Canada.
In August this year, the USDA announced that the Whole-Farm Revenue Protection program would provide crop insurance for hemp farmers operating under Congressional agriculture legislation. The insurance only covers the fiber, flower or seeds but not the whole plant.
Sonny Perdue, the agriculture secretary, said that his department is working “as fast as possible” to develop an insurance product for the hemp crop. In the meantime, The USDA is working on establishing general regulations that will control the growth of the hemp crop. The rules will be released on an interim basis, but ahead of the planting season in 2020.
Analysts are of the view that hemp industry participants like Hemptown USA and HTC Extraction Systems (TSX.V: HTC) may be getting exasperated by the endless lack of a conclusion to matters of regulating hemp production.
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