Highlights of USDA Programs Hemp Farmers Can Benefit From

Although the Farm Bill of 2018 legalized the cultivation of industrial hemp, farmers who planted the cash crop found themselves between a rock and a hard place. While technically, growing hemp was allowed by federal law, the industry was largely unregulated, and hemp farmers were locked out of most of the USDA’s programs. Last week, the USDA passed its much awaited interim final rule on the hemp industry, finally allowing hemp farmers access to its agricultural programs.

The new nationwide hemp production rules took effect last Thursday, and starting from the 2020 planting season, growers licensed under federally approved programs will have the same access to federal loans, crop insurance, disaster assistance and conservation programs that farmers of other commodities have under the USDA’s various agencies. Farmers will finally be eligible for these programs under the Farm Service Agency (FSA), Natural Resources Conservation Service (NRCS) and the Risk Management Agency (RMA). According to Bill Northey, USDA Undersecretary for Farm Production and Conservation, once states and American tribes that plan to regulate hemp production receive federal approval, permitted farmers can begin to apply for those programs. So what kind of programs will farmers have access to?

Federal crop insurance. Farmers producing hemp for fiber, flower or seeds will be able to buy Whole Farm Revenue Protection Policies through the RMA. However, they must be able to prove farm income by meeting at least one of the following three criteria; a five year history of farm income, a three year history of income if the farmer is a beginner or a military veteran and a contract for the purchase of their insured hemp. Farmers who are unable to get crop insurance will be able to purchase the FSA’s Non-insured Crop Disaster Assistance which covers any adverse weather conditions.

No coverage for hot hemp. Currently, the USDA’s insurance policies are not set to cover hemp that has to be destroyed for exceeding the 0.3% THC limit, even if it resulted from factors out of the farmer’s control. “Every crop has its risks and rewards,” says USDA Undersecretary Greg Ibach. Farmers will just have to hope they don’t have a lot of hot hemp in their harvest.

Access to capital. The Farm Service Agency (FSA) is currently working on loan programs which will be available to hemp farmers on a limited basis. Growers will have access to operating, ownership, beginning farmer and on farm storage loans among others.

According to Northey, these programs are run to give all farmers equal opportunity, especially small scale farmers who might be unable to compete with larger producers and corporations. Experts believe hemp industry players like Canopy Rivers Inc. (TSX: RIV) (OTC: CNPOF) and Earth Science Tech Inc. (OTCQB: ETST) are pleased that industrial hemp farmers will soon gain access to the same services and federal programs as farmers of other crops.

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