Things to Consider

The 2018 Farm Bill officially recognized Industrial Hemp as an agricultural commodity in the United States, removing it from the list of controlled substances.  Upon approval of the new Farm Bill, Industrial Hemp also became a covered commodity under the Risk Management Agency (RMA).  In February 2020, the USDA and RMA released a federally subsidized Multi-Peril Crop Insurance (MPCI) policy for Industrial Hemp. The release of this policy represented a watershed moment for the hemp industry and provided a useful starting point for risk management on hemp operations across the nation.

While we are excited about the opportunities this provides our producers, there are still some issues to work through.  We are actively advocating for the removal of a few problematic qualifying factors, to make the product available to more producers in the 2021 crop year.  For example, at this time hemp cannot follow acreage that was planted to any of the following in the prior year: cannabis, canola, dry peas, mustard, rapeseed, or sunflowers. In addition, hemp cannot follow acreage that was planted to soybeans in the prior year in northern states.

You can trust our team to keep you updated on all policy developments for the 2021 crop year and beyond.  If you have questions about implementing a risk management plan for your hemp operation, contact us today!

How It Works


Covered Perils

The APH Plan Covers:

Drought, Excess Moisture, Earthquake, Failure of irrigation water supply (if caused by an insured peril), Fire, Insects and Disease, Wildlife, Volcanic Eruption, Hail, Freeze and Wind



Requirements for Eligibility:

1. All growers must have a license to grow hemp and must comply with applicable state, tribal or federal regulations or operate under a state or university research pilot
2. Have at least one year of prior hemp production
3. Have a contract for the purchase of the insured hemp
4. Have a minimum of 5 acres for CBD and/or 20 acres for grain and fiber
5. Producers must report hemp acreage to FSA after planting to comply with federal and state law enforcement



Availability in The US:

The MPCI pilot insurance program is available for hemp grown for fiber, grain, or CBD oil for the 2020 crop year 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, and Wisconsin


Sample Indemnity

Hemp Transplant Floral Indemnity Example (Weld County, Colorado):

Growing Purpose: CBD
4 Year Average Yield: 2,000 lbs/acre
Acres Planted: 50 acres
Practice Type: Irrigated
Harvested Amount: 1,000 lbs/acre
MPCI Coverage Level: 75%
Plant Price: $8.64

2,000 lbs X 75% = 1,500 lbs
1,500 lbs - 1,000 lbs = 500 lbs
500 lbs X $8.64 = $4,320
$4,320 X 50 acres = $216,000

In this example, you would receive an indemnity payment of $216,000.

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