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USDA unveils crop insurance programs for hemp producers

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The U.S. Department of Agriculture has announced two crop insurance programs for hemp producers.

The programs are designed to protect hemp producers’ crops from natural disasters, the department said in a statement Thursday.

A pilot hemp insurance program through Multi-Peril Crop Insurance provides coverage against loss of yield due to insurable causes of loss for hemp grown for fiber, grain or cannabidiol oil.

The Noninsured Crop Disaster Assistance Program coverage protects against losses associated with lower yields, destroyed crops or prevented planting where no permanent federal crop insurance program is available, the statement said.

Deadline to sign up for both programs is March 16, 2020.

The pilot insurance program is a new crop insurance option for hemp producers in select counties of 21 states for the 2020 crop year, including 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, the statement said.

Information on eligible counties is accessible through the USDA Risk Management Agency’s Actuarial Information Browser.

To be eligible for the pilot program, a hemp producer must have at least one year of history producing the crop and have a contract for the sale of the insured hemp. The minimum acreage requirement is five acres for cannabidiol and 20 acres for grain and fiber.

The Noninsured Crop Disaster Assistance Program provides coverage against loss for hemp grown for fiber, grain, seed or cannabidiol for the 2020 crop year where no permanent federal crop insurance program is available, the statement said.

Basic 50/55 coverage is available at 55% of the average market price for crop losses that exceed 50% of expected production, and buy-up coverage is available in some cases. The 2018 Farm Bill allows for buy-up levels of coverage from 50% to 65% of expected production in 5% increments, at 100% of the average market price. Premiums apply for buy-up coverage.

For all coverage levels, the 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, the statement said.

To be eligible, all growers must have a license to grow hemp and must comply with applicable state, tribal or federal regulations or operate under a state or university research pilot, as authorized by the 2014 Farm Bill, the statement said.

 

 

 

 

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