Hemp farmers in 21 states will be eligible for a new crop insurance pilot program starting next year, the U.S. Department of Agriculture (USDA) announced on Monday.
The program will provide Actual Production History coverage, which insures farmers against yield losses associated with natural causes like drought and disease. Only those who’ve cultivated hemp in accordance with a 2014 Farm Bill pilot program or federal regulations laid out in USDA’s interim final rule in October qualify. They must also have grown hemp for at least one year.
Crops that are cultivated for fiber, grain or CBD oil would be eligible for coverage.
“We are excited to offer coverage to certain hemp producers in this pilot program,” Martin Barbre, the administrator for USDA’s Risk Management Agency, said in a press release. “Since this is a pilot program, we look forward to feedback from producers on the program in the coming crop year.”
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For now, the pilot program will be available 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.
Since hemp and its derivatives were federally legalized under the 2018 Farm Bill, lawmakers and stakeholders have put pressure on various federal agencies to develop regulations to unlock the crop’s potential. USDA’s release of an interim final rule in October represented a significant step in that respect, but farmers have said they’ve continued to face barriers such as limited insurance coverage options.
USDA announced in August that hemp could be covered under a separate insurance program, but that one does not apply if hemp is cultivated for CBD oil, which represents one of the largest uses for the crop. A USDA official testified at a House committee hearing in September that there are unique challenges associated with covering hemp.
The department also announced that, beginning in 2021, hemp farmers will be eligible for coverage under the Nursery crop insurance program and the Nursery Value Select pilot crop insurance program.
“Under both programs, hemp will be insurable if grown in containers and in accordance with federal regulations, any applicable state or tribal laws, and terms of the crop insurance policy,” USDA said.
While USDA is moving forward in its development of a regulatory framework for hemp, stakeholders and lawmakers have expressed concerns about several proposed rules such as THC potency limits and testing standards. Given the widespread interest in the regulations, the department announced last week that it is extending the public comment period from the end of December to January 29, 2020.
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