The 2018 Farm Bill reclassified hemp, and it is now legal to grow industrial hemp. This means, once policies are in place, hemp growers will be eligible for many USDA programs. The Farm Bill defines hemp as containing 0.3 percent or less tetrahydrocannabinol, or THC, on a dry weight basis.
USDA is working to implement those policies now. USDA’s Agricultural Marketing Service is developing an interim rule that will outline how states, territories, and tribes can submit plans that will enable producers to grow hemp in those areas. This rule is a first step that will enable USDA agencies that administer farm programs — including USDA’s Farm Service Agency, Natural Resources Conservation Service, and Risk Management Agency — to provide guidance on eligibility for additional farm programs.
Assistance for Hemp Growers
Crop Insurance Coverage
RMA’s Whole-Farm Revenue Protection coverage will be available for 2020. Producers in areas in areas covered by USDA-approved hemp plans or who are part of approved state or university research pilot programs are eligible.
Select Programs on Pilot Farms
Producers growing industrial hemp in accordance with state or university research pilot requirements of Section 7606 of the 2014 Farm Bill are currently eligible for certain FSA farm loans and NRCS conservation programs.
Whole-Farm Revenue Protection
The Whole-Farm Revenue Protection, or WFRP, is available to hemp growers beginning the 2020 crop year. As USDA agencies fully implement Farm Bill provisions, additional crop insurance options will be available.
WFRP allows coverage of all revenue for commodities produced on a farm up to a total insured revenue of $8.5 million. It is a popular policy among specialty crop and organic growers.
Producers can now purchase WFRP coverage if they are part of a Section 7606 state or university research pilot. Other producers cannot purchase coverage until a USDA-approved plan is in place.
To be eligible, among other requirements, a hemp producer must comply with applicable state, tribal or federal regulations for hemp production and have a contract for the purchase of the insured industrial hemp.
WFRP provisions state that hemp having THC above the compliance level will not constitute an insurable cause of loss. Additionally, hemp will not qualify for replant payments under WFRP.
Find more in our August 27, 2019 news release.
State, Territory, and Tribal Plans
AMS is formulating regulations that will include specific details for both a USDA plan to produce hemp and a process for the submission of state, territory, and tribal plans to USDA. AMS is developing the regulation now, which is anticipated to post to the Federal Register in 2019.
These regulations will include procedures and information collections regarding:
- land to be used for planting;
- testing for THC levels;
- effective disposal of plants and products;
- compliance with law enforcement;
- annual inspections;
- submission of information to USDA; and
- certification that resources and personnel are available to carry out the practices and procedures described above.
Producers in states, territories, and tribes that do not have a plan can use a USDA developed plan as long as production in those states, territories or tribes is not prohibited. Under the USDA plan, industrial hemp producers will apply for a license to produce hemp. Other requirements will follow those in the Farm Bill and required of state plans.
Once rulemaking is complete, FSA, NRCS, RMA and other agencies will share eligibility information on their programs, which include safety net, conservation, farm loan, and disaster assistance programs. This includes FSA looking at additional coverage options through RMA-administered crop insurance and FSA’s Noninsured Crop Disaster Assistance Program.