FAQ – USDA Hemp Programs for Risk Management

 

 

1. What do the programs cover and what are the coverage levels?

MPCI

Multi-Peril Crop Insurance (MPCI) provides coverage against loss of yield because of insurable causes of loss for hemp grown for fiber, grain or Cannabidiol (CBD) oil. MPCI Catastrophic (CAT) 50/55 coverage is available as well as additional coverage up to 75/100.

NAP

NAP provides coverage against loss of yield due to an eligible disaster condition for hemp grown for fiber, grain, seed, or CBD. NAP basic 50/55 coverage is available at 55 percent of the average market price for crop losses that exceed 50 percent of expected production. Buy-up coverage is available in some cases up to 65/100.

WFRP

WFRP allows coverage of all revenue for commodities produced on a farm up to a total insured revenue of $8.5 million, including hemp grown for fiber, flower, or seeds.

2. Where in the country is coverage available?

MPCI

The MPCI pilot insurance program is available for hemp grown for fiber, grain, or CBD oil in select counties of 25 states: Alabama, Arizona, Arkansas, California, Colorado, Illinois, Indiana, Kansas, Kentucky, Maine, Michigan, Minnesota, Montana, Nevada, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin. Information on eligible counties is accessible through RMA’s Actuarial Information Browser.

NAP

Nationwide

WFRP

Nationwide

3. What is the deadline to sign up?

The deadline varies by county for MPCI and can be found on RMA’s Actuarial Information BrowserIn states where MPCI is available, FSA will have the same NAP application closing dates as RMA for hemp.  However, in states where MPCI is not available, producers should check with their local FSA office for NAP application closing dates.
 

4. Who is eligible for coverage?

To be eligible, all growers must have a license to grow hemp and must comply with applicable state, tribal, or federal regulations according to the 2018 Farm Bill or operate under a state or university research pilot, as authorized by the 2014 Farm Bill.

MPCI

To be eligible for MPCI, the producer must have at least one year of hemp production history, have a contract for the purchase of the insured hemp, and have a minimum of 5 acres for CBD and/or 20 acres for grain and fiber.

NAP

To be eligible for NAP, the producer must have a contract for the purchase of the hemp.

WFRP

Eligibility for WFRP coverage requires you to file either a Schedule F tax form or other farm tax forms for farm revenue for your history period. You must also have a contract for the purchase of the insured hemp, and have no more than $8.5 million in insured revenue, which is the farm revenue allowed to be insured under the policy multiplied by the coverage level you select.    

5. Is any documentation required to show the hemp producer can market their harvested crop?

A producer is required to provide a processer contract no later than the acreage reporting date. Default of contract by a processer does not qualify as a loss for MPCI or WFRP indemnity or for NAP payments.

6. What is the deadline for filing an acreage report?

The deadline now varies by state for MPCI and can be found on RMA Actuarial Information Browser. FSA will have the same acreage reporting dates for states in the MPCI program.  However, in states where MPCI is not available, producers should check with their local FSA office for NAP acreage reporting dates.

  • 7/15: any states with the latest Final Planting Date for any type before July 1 (CO, IL, IN, ME, MI, MN, MT, ND, NY, OR, PA, WA, & NV)
  • 7/31: any states with a Final Planting Date for any type on or after July 1 (AL, CA, KS, KY, NC, NM, OK, TN, VA, & AR, AZ, TX)

7. What is needed to file an acreage report?

Acreage reports include the producer’s name, location, acreage, share interest in the crop, license number, intended use, and contract.

8. What are the reporting requirements for THC testing?

MPCI

Producers must provide notice to their insurance company within 72 hours of the notification from the governing authority stating the results of the THC testing for the acreage or the harvested production.

NAP

NAP participants are required to provide testing results when production is reported for loss or history purposes.

9. What are the implications for my coverage if the hemp is tested and exceeds the legal THC level?

MPCI


Hemp having THC above the federal legal level is not an insurable cause of loss and would result in the hemp production being ineligible for production history purposes.

NAP

Hemp having THC above the federal legal level is an ineligible cause of loss and would result in the hemp production being ineligible for production history purposes.

WFRP

Hemp having THC above the federal legal level is not an insurable cause of loss and would result in all expected revenue from hemp reported on the Farm Operation Report being considered revenue-to-count at claim time.

10. Are there any exclusions to coverage or yield adjustments?

MPCI

Will not cover late or prevented planting, replanting, trend yield adjustment, yield exclusion, yield cups, yield floors, or yield substitution. New Producer yield benefits do not apply, which is distinct from Beginning and Veteran Farmer and Rancher.

NAP

No, there are no exclusions.

WFRP

Will not offer a replant payment. Offers historic revenue adjustment options that include Revenue Substitution, Revenue Exclusion, and Revenue Cup.

11. What are the service fees?

MPCI

$655 per crop per county for CAT coverage.

$30 per crop per county for buy-up coverage (plus premium).

NAP

$325 per crop per county.

$825 per producer per county.

$1,950 for a producer in multiple counties.

Note: Hemp, grain, and seed are considered one crop; fiber is considered a separate crop; CBD is a separate crop.

WFRP

$30 per policy.

12. Are there any provisions for special groups?

MPCI

There are special provisions for beginning and veteran farmers and ranchers, which can be found on the Beginning Farmer and Rancher Benefits for Crop Insurance and Veteran Farmer and Rancher Benefits for Federal Crop Insurance fact sheets.

NAP

There are special provisions for limited-resource, beginning, socially disadvantaged, and veteran farmers and ranchers, which can be found on the Noninsured Crop Disaster Assistance Program for 2019 and Subsequent Years fact sheet.

WFRP

There are special provisions for beginning and veteran farmers and ranchers, which can be found on the Whole-Farm Revenue Protection fact sheet.

13. How will my production guarantee be determined?

MPCI

Production guarantees will be based on your approved APH yield and the coverage level you select and will be calculated using actual yields based on your reported production history. If you have less than four years of actual yields for the crop in the county, your approved APH yield will be based on a combination of actual yields, if any, and the county Transitional Yield (T-Yield). The county T-Yield is provided in the actuarial documents and is based on the historical county average yield per acre. If you have one year of actual yields, your approved APH yield will be based on your reported production history and three years of 80% of the county T-Yield. If you have two years of actual yields, it will be based on your actual yields and two years of 90% of the county T-Yield. If you have three years of actual yields, it will be based on your actual yields and one year of 100% of the county T-Yield. If you do not have any actual yields, the approved APH yield will be based on 65% of the county’s T-Yield.

NAP

Production guarantees will be based on your approved APH yield and the coverage level you select and will be calculated using actual yields based on your reported production history. If you have less than four years of actual yields for the crop in the county, your approved APH yield will be based on a combination of actual yields, if any, and the county Transitional Yield (T-Yield). The county T-Yield is based on the historical county average yield per acre. If you have one year of actual yields, your approved APH yield will be based on your reported production history and three years of 80% of the county T-Yield. If you have two years of actual yields, it will be based on your actual yields and two years of 90% of the county T-Yield. If you have three years of actual yields, it will be based on your actual yields and one year of 100% of the county T-Yield. New producers may have a yield guarantee based on 100% of the county average yield.

WFRP

WFRP insured revenue is determined by using the lesser of the producer’s whole-farm historical average revenue and the current year’s expected revenue multiplied by the elected coverage level.

14. Where can I find my county T-Yield data?

Producers can access T-Yield data through RMA’s Actuarial Information Browser. On this webpage, producers can search for their specific state and county to access T-Yield data.

15. Is there a maximum amount of indemnity/NAP payment that can be received?

MPCI

Indemnities are based on elected coverage levels.

NAP

Yes, NAP is subject to a payment limitation. The maximum payment is $125,000 for basic 50/55 coverage or $300,000 for buy-up coverage.

WFRP

Indemnities are based on elected coverage levels, with an overall policy cap of $8.5 million in insured revenue.

16. Are there any adjusted gross income restrictions?

MPCI

No.

NAP

Yes, the maximum historical adjusted gross income is $900,000. More information is available on the Average Adjusted Gross Income Certification and Verification, 2019-2023 fact sheet.

WFRP

No.

17. How should hemp production be reported for MPCI and NAP?

As pounds.

18. Are there any crops after which hemp cannot be planted and still be insured or have coverage?

Hemp cannot follow acreage that was planted to any of the following in the prior year: cannabis, canola, dry peas, dry beans, mustard, rapeseed, or sunflowers. In addition, hemp cannot follow acreage that was planted to soybeans in the prior year in northern states. For further details, contact a crop insurance agent or your local FSA office. Applicable for all states.

19. Where can I find more information on the U.S. Domestic Hemp Production Program?

For more information on the U.S. Domestic Hemp Production Program, visit USDA’s Agricultural Marketing Services’ website and read their frequently asked questions.

** This FAQ is intended for informational purposes only. Refer to the applicable policy and procedures for complete details. **