USDA Adds Hemp to Agriculture Insurance Programs

The U.S. Department of Agriculture has created a pilot hemp insurance program through its Multi-Peril Crop Insurance program and producers now have access to the Noninsured Crop Disaster Assistance Program (NAP), the agency announced last week.

The MPCI pilot hemp insurance program provides coverage against loss of yield for hemp grown for fiber, grain, or CBD and is available for eligible producers in certain counties in Alabama, California, Colorado, Illinois, Indiana, Kansas, Kentucky, Maine, Michigan, Minnesota, Montana, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Tennessee, Virginia, and Wisconsin.

To be eligible for the pilot program, hemp producers must have at least one year of production history and have a contract for the sale of the insured hemp. The policy requires minimum acreage of 5 acres for CBD and 20 acres for grain and fiber. Hemp will not qualify for replant payments or prevented plant payments under MPCI, the agency said.

The NAP coverage protects against losses associated with lower yields, destroyed crops, or prevented planting where no permanent federal crop insurance program is available. NAP basic is available at 55 percent of the average market price for crop losses exceeding 50 percent of expected production and buy-up coverage is available in some cases, the agency said in a release. The 2018 Farm Bill, which legalized hemp federally, allows for buy-up levels of NAP coverage from 50 to 65 percent of expected production in 5 percent increments, at 100 percent of the average market price. For all coverage levels, the NAP service fee is $325 per crop or $825 per producer per county, not to exceed $1,950 for a producer with farming interests in multiple counties.

Last year the USDA announced hemp would qualify under the federal Whole-Farm Revenue Protection policy. Hemp farmers eligible under that program can insure plants with revenues up to $8.5 million. In December, the agency said hemp would also qualify under the MPCI Actual Production History provisions and that in 2021 hemp plants would be insurable under the Nursery Crop Insurance and Nursery Value Select Pilot Crop programs.