The USDA has given hemp farmers access to two powerful programs for their crops. They have created a pilot hemp insurance program which will cover hemp grown for CBD, grain, and fiber, and they are giving farmers access to the federal Noninsured Crop Disaster Assistance Program (NAP).
With the Multi-Peril Crop Insurance program in place, farmers can get coverage in certain counties in the following states:
- New Mexico
- New York
- North Carolina
- North Dakota
To qualify for coverage, farmers have several requirements that they will need to follow.
- At least one year of production history.
- A contract for the sale of the insured hemp.
- A minimum of 5 acres for CBD or 20 acres for grain and fiber.
- Producers will not be eligible for replanting payments.
Under NAP coverage, they will be eligible to be protected against losses due to lower yields, destroyed crops, or prevented planting if no there is no permanent federal crop insurance program available. Basic NAP coverage will pay out 55% of the average market price for losses over 50% of expected production and may be able to get buy up coverage in some cases. If the farmer is able to get buy up coverage NAP will cover from 50-65% of expected production in 5% increments, at 100% of the average market price. The fees for NAP coverage will be $325 per crop, $825 per county, and will not exceed $1,950 for any farmer who operates in multiple counties.
The USDA previously announced that hemp will be eligible to qualify for the federal Whole-Farm Revenue Protection Policy. Farmers can insure revenues up to $8.5 million if they qualify for the program. Farmers will also qualify for the MPCI Actual Production History provisions. In 2021, hemp will also be insurable under the Nursery Crop Insurance and Nursery Value Select Pilot Crop programs.