The U.S. Department of Agriculture Recently Announced that Industrial Hemp Growers Can Qualify for Crop Insurance
The U.S. Department of Agriculture (USDA) recently announced that industrial hemp growers can qualify for insurance coverage under the Whole-Farm Revenue Protection (WFRP) program for crop year 2020. WFRP allows coverage of all revenue for commodities produced on a farm up to a total insured revenue of $8.5 million. According to the USDA, additional insurance coverage options for hemp growers are also on the horizon.
As investment in the hemp industry continues to expand across the country, USDA’s announcement is timely. Martin Barbre, the Administrator of USDA’s Risk Management Agency (RMA), recently noted that a number of hemp producers are anxious for a way to protect their crops from natural disasters. According to Mr. Barbre, “[t]he WFRP policy will provide a safety net for them. We expect to be able to offer additional hemp coverage options as USDA continues implementing the 2018 Farm Bill.”
2018 Farm Bill Greenlights Hemp Production
The newly-available insurance coverage is made possible by the 2018 Farm Bill, which amended the Controlled Substances Act (CSA) to remove industrial hemp from the list of banned substances. The Farm Bill defines “legal” hemp as containing 0.3 percent or less tetrahydrocannabinol (THC) on a dry weight basis.
Under the 2018 Farm Bill, hemp may be grown (1) with a valid USDA-issued license, (2) under a USDA-approved State or Tribal plan, or (3) under the 2014 Farm Bill industrial hemp pilot authority. That pilot authority will expire one year after USDA establishes a plan for issuing USDA licenses pursuant to the 2018 Farm Bill.
While the USDA works on regulations to implement the 2018 Farm Bill, federal agencies are working to make resources available to hemp producers. In June, the USDA published guidance regarding the importation of hemp seeds, which previously required approval from the Drug Enforcement Administration (DEA). More recently, the National Credit Union Administration (NCUA) issued guidance giving federally insured credit unions the green light to provided financial services to the legal hemp industry.
Federal Insurance for Hemp Producers
The availability of federal insurance coverage is the latest development. Under the new USDA directive, coverage for hemp grown for fiber, flower or seeds will first be available to producers who are in areas covered by USDA-approved hemp plans or who are part of approved state or university research pilot programs. However, other hemp producers can’t obtain coverage until a USDA-approved plan is in place.
To be eligible, among other requirements, a hemp producer must comply with applicable state, tribal or federal regulations for hemp production and have a contract for the purchase of the insured industrial hemp. WFRP provisions state that hemp having THC above the compliance level will not constitute an insurable cause of loss. Additionally, hemp will not qualify for replant payments under WFRP.
What’s Next?
The USDA’s Agricultural Marketing Service (AMS) is currently drafting regulations that will include specific details for both a USDA plan for the production of hemp and a process for submission of state, territorial or tribal plans to USDA. According to the USDA, the regulations will post to the Federal Register later this year.
Once rulemaking is complete, RMA, the Farm Service Agency (FSA), the Natural Resources Conservation Service and other USDA agencies will share eligibility information on their programs, which include safety net, conservation, farm loan and disaster assistance programs. The USDA further advises that the FSA looking at additional coverage options through its Noninsured Crop Disaster Assistance Program and through RMA-administered crop insurance.
If you have questions, please contact us
If you have any questions or if you would like to discuss the matter further, please contact the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.
New Jersey’s Revised UHAC Regulations: What Residential Developers Need to Know About Affordable Housing Commitments
New Jersey residential developers with affordable housing obligations should carefully review their existing approvals, development agreements, and proposed deed restrictions in light of the State’s revised UHAC regulations (Uniform Housing Affordability Controls). The regulations, which took effect on November 6, 2025, significantly change the administration and physical requirements for affordable housing units. For developers with […]
“No Comment” Culture: Why Silence Is Often the Riskiest Legal Strategy
A “no comment” response is sometimes the right call when a legal problem arises. As a blanket policy, however, it lets allegations go unanswered, deadlines pass, evidence disappear, and manageable disputes grow into expensive litigation. The businesses that fare best are usually the ones that say little publicly while acting decisively behind the scenes. When […]
Utility-Scale Battery Storage Projects: A Legal Roadmap for Developers, Property Owners and Other Stakeholders
Utility-scale battery energy storage systems (BESS) are becoming an increasingly important component of the electric grid throughout New Jersey, New York, and Pennsylvania. As renewable generation expands, electricity demand increases and grid operators seek greater flexibility, battery storage can help balance supply and demand while providing additional capacity and reliability. For developers, battery storage presents […]
Navigating Disputes: Hire a Partnership Dispute Lawyer
A falling out between partners can be disastrous for any business. In many cases, the partnership will not survive. If you are in an unworkable situation with your partners, it may be time to consult a partnership dispute lawyer experienced in handling partnership breakups and dissolutions before the situation deteriorates any further. It is easy […]
Section 363 Sales in Bankruptcy: What Businesses, Lenders, and Buyers Need to Know
When a company enters Chapter 11 bankruptcy, many assume the process will culminate in a lengthy reorganization plan. However, distressed businesses are increasingly being sold through a different mechanism — a sale under Section 363 of the United States Bankruptcy Code. A Section 363 sale allows a company, as a debtor-in-possession in bankruptcy, to sell […]
Zoning Laws Explained: What You Need to Know Before Buying Property
Before buying property, it is critical to determine whether local zoning laws may affect your plans. If you plan to redevelop the property, you will want to confirm that local zoning regulations permit development as intended. If acquiring property that is already developed, you must verify that the use is permitted in the underlying zoning […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
