THE U.S. Department of Agriculturehas launched the Multi-Peril Crop Insurance Pilot Program for hemp producers, and has also opened up the Noninsured Crop Disaster Assistance Program for hemp growers.

The MPCI pilot insurance program will be available to farmers in 21 states for the 2020 crop year to cover against loss of yield because of insurable causes of loss for hemp grown for fiber, grain or cannabidiol (CBD).

The NAP program provides coverage against loss from lower yields, destroyed crops or prevented planting for the 2020 crop year where no permanent federal crop insurance program is available.

If you are in the hemp business, you will have to act fast as the application deadline for the programs is March 16.

To qualify, the hemp must contain no more than 0.3% tetrahydrocannabinol (THC) on a dry-weight basis. Hemp having THC above the compliance level is an uninsurable or ineligible cause of loss and will result in the production being ineligible for production-history purposes.

Multi-Peril Crop Insurance?

AVAILABLE IN SELECT COUNTIES OF 21 STATES

  • Alabama
  • California
  • Colorado
  • Illinois
  • Indiana
  • Kansas
  • Kentucky
  • Maine
  • Michigan
  • Minnesota
  • Montana
  • New Mexico
  • New York
  • North Carolina
  • North Dakota
  • Oklahoma
  • Oregon
  • Pennsylvania
  • Tennessee
  • Virginia
  • Wisconsin

To be eligible, growers must:

  • Have been producing hemp for at least year.
  • Have a contract for purchase of their crops.
  • Be licensed to produce hemp.
  • Comply with the applicable state tribal or federal regulations or operate under a state
    or university research pilot authorized by the 2014 Farm Bill.
  • Produce at least 5 acres of hemp for CBD or 20 acres for grain or fiber.

Noninsured Crop Disaster Assistance

To be eligible for NAP coverage, farmers must:

  • Have a contract for purchase of their hemp crops.
  • Have a license to produce hemp.
  • Comply with the appropriate state, tribal or federal regulations or operate under a state
    or university research pilot authorized by the 2014 Farm Bill.
  • Produce at least 5 acres of hemp for CBD or 20 acres for grain or fiber

You Will Have to Submit THC Testing Results with Acreage Report

NAP basic coverage will pay out 55% of the average market price for crop losses that exceed 50% of expected production. Buy-up coverage is available in some cases.

The 2018 Farm Bill allows for buy-up levels of NAP coverage from 50 to 65% of expected production in 5% increments to 100% of the average market price at additional premiums.

For all coverage levels, the NAP 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.

Acreage reports and testing

In compliance with federal and state laws, hemp producers under both the MPCI and NAP must submit their final acreage reports by Aug. 15 this year.

At the time, the farmer must also submit their THC testing results to prove that THC levels do not exceed 0.3% (anything above would void the policy).

Hemp farmers must also provide their THC testing results when production is reported.

Get a Quote

If you’re looking for a team of specialists who can help your cannabis business navigate state laws and regulations like this, contact Cannabis Connect today for a free quote. 

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