News & Events
What In The Hemp!
In 2020, a new program was released through Federal Crop Insurance as a risk management tool for Industrial Hemp operations. Industrial Hemp is not a new crop by any means, but because of its legal status, Hemp could not be included in a federal program. Although, the 2018 Farm Bill changed all of that, which is why it can now be offered under a federally subsidized plan. The producer pays only part of the premium while receiving 100% of any indemnity. This means the producer is eligible to receive 100% of any eligible indemnity while paying for less than half of the actual cost of coverage.
As with all new crop programs, this is being introduced incrementally, across the US. Your Hemp operation(s) must be in a county approved for coverage. To qualify for the program, a few items need to be considered:
- You must be a state-licensed hemp producer with at least one year of experience producing Hemp
- You must have an approved crop rotation plan
- You must have a processing plan by your acreage reporting date
- You will need to produce a crop below the required .3% THC levels.
The Hemp Crop Insurance Program offers yield protection under an actual production history program or APH. This type of program protects against low or reduced crop yields due to certain perils.
How does an APH program work?
Since this program is based on your yield, you will need to gather any historical Hemp production to prove your average yield.
If you have less than four years of planting history, then an approved yield will be given to you based on a county average as determined by the Risk Management Agency. Once we’ve determined your average yield, you would select the percentage of average yield to insure; this range is 50-75 percent. Your guaranteed yield is determined by multiplying your average yield by the percentage insured. For example, if a producer averages 700 lbs. per acre and wants to insure at the highest level of 75%, the guaranteed yield per acre is 525 lbs. per acre. Each year, the RMA publishes a Hemp price for every type of Hemp offered in the county. Once that price is released, the producer can insure 55-100% of that price.
If the final harvest or appraised production is LESS THAN the guaranteed yield, the producer will make an indemnity payment. If you produce Hemp for Fiber, Grain, or CBD, this program can provide an excellent foundation to your overall Hemp Risk Management Plan.
The sign-up deadlines are approaching quick. Depending on your location, the Sales Closing Date is the last day to get coverage. It ranges from the end of January to mid-March. You cannot get coverage for that crop year once that date has passed. Connect with an AgRisk Advisor today to get more information. We would be happy to walk you through the process and serve you!
Merry Christmas and Happy New Year! We will see you in 2022!
And remember we are…
With you…no matter the weather.
Be sure to follow our social profiles!