Today represents a new turning point in the journey of hemp following the 2018 Farm Bill. The wildly popular crop will now be issued insurance in select counties in America, for a pilot program beginning in 2020.

By: Chloe Persichetti

Today, the United States Department of Agriculture (USDA) announced a new crop insurance pilot program beginning in 2020. According to their press release, 21 select counties in the U.S. will be eligible for this new milestone regarding hemp. 

This pilot program will make hemp federally regulated as studies on the crop move forward. The hemp farmers approved will be given Multi-Peril Crop Insurance (MPCI) that will cover crop losses due to natural events such as disease, drought and flooding. 

To be approved for this pilot program, eligible farmers will need to have grown hemp for at least one year prior. The farmers will also be limited to growing hemp for use as fiber, grain or CBD oil. All crops must contain under 0.3% THC on a dry-weight basis, and farmers must also have a contract that states they are able to sell hemp and comply with federal regulations and the given sanctions within their state or tribe.

According to the USDA, “The MPCI provisions state that hemp having THC above the federal statutory compliance level will not constitute an insurable cause of loss. Additionally, hemp will not qualify for replant payments or prevented plant payments under MPCI.”

 

“We are excited to offer coverage to certain hemp producers in this pilot program,” says RMA Administrator Martin Barbre. “Since this is a pilot program, we look forward to feedback from producers on the program in the coming crop year.”

At this time, approved counties can be found within the states of 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.

After the Farm Bill of 2018, Hemp became legal and therefore, federal policies are slowly beginning to be offered — a true milestone in the hemp plant’s societal journey. This pilot program could offer a glimpse into the profitability of hemp if the CBD industry booms like it is projected to. According to cannabis researchers, the CBD market in America will surpass 20 billion dollars by 2024. It seems like the USDA is gearing up for the noticeable clamor about CBD by focusing on the farmers responsible for growing its source plant. 

MPCI is regulated by the government, while being monitored and sold by private crop insurance companies as the farmers work their land. This means all three share the burden of risk if the hemp plant does not do well. With numbers like the ones estimated, it will be interesting to see how everything plays out. 

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The Farm Bill of 2014 also established its own form of hemp research pilot program, but that was geared toward the cultivation and research of hemp. Now, this pilot program will be for the cultivation and sale of hemp, which will be new territory for the plant since 1937 during the Marijuana Tax Act. 83 years later, hemp has regained its legal status and is making a comeback that very well could be unprecedented. 

In addition to the statements above, the USDA also plans to make adjustments to hemp insurance in the 2021 crop year.

“Hemp will be insurable under the Nursery crop insurance program and the Nursery Value Select pilot crop insurance program,” says the USDA. “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.”

Slowly but surely, notable changes are occurring in the relationship between government regulators and CBD. The USDA states that more information on the MPCI pilot program will be available in 2020. Until then, the pilot program will be the first of its kind in a hemp industry that is destined to see monumental growth in the near future.

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