Relaxed regulations should make it easier for hemp farmers to receive better coverage
If there is one thing hemp producers can be sure of, it is that they have always been supported in every possible way by different federal entities. This time around, federal agricultural regulators have made some adjustments to crop insurance rules for this community, with the intention of adding flexibility and removing any doubts about insuring the newly legal product.
The changes announced yesterday by the US Department of Agriculture’s (USDA) Risk Management Agency, however, do not appear to be addressing the major challenges many hemp growers face today in seeking risk protection; processors who fail to honor contracts to purchase hemp after harvest and/or crops that exceed established tetrahydrocannabinol (THC) limits.
Among the most relevant rule changes reported so far is a new policy for calculating acreage, as well as a clarification of the term “hemp of no economic value.” In addition, it has been made clear that legal hemp that a processor does not purchase automatically becomes ineligible for crop insurance coverage. The agency also added another requirement for insuring hemp grown from seed. Direct-seeded hemp is now required to be planted at 1200 plants per acre.
USDA’s new insurance chief, Risk Management Agency Administrator Marcia Bunger, said that while hemp is “a very viable crop” for many farmers, the industry is so new that insurance and risk mitigation is becoming a complicated issue. Crop insurance is usually based on agreed expected yields. But even so, hemp is too new a crop to have a clear idea of what the yields would be in many of its areas.