Federal crop insurance for hemp on the way

PORTLAND — Federal crop insurance for hemp is coming this year, though questions remain about what exactly will be covered under the new policies.

Ben Thiel, Northwest regional director for the USDA Risk Management Agency, said rates for crop insurance are calculated using hard data such as market prices and anticipated yield. That is more difficult with hemp, which was just legalized in the 2018 Farm Bill.

“Because hemp is so new … without that data, it’s hard to set rates,” Thiel said. “We have to be, to some extent, debt-neutral and accountable to taxpayers.”

Thiel spoke during the annual Hemp & CBD Connex Conference on Jan. 30 at the Portland Expo Center, where he gave growers a brief overview of crop insurance and shared limited details about the hemp plan, which has yet to be officially released.

The USDA announced in December it would provide insurance coverage for hemp growers in certain counties across 21 states — including Oregon and California, but not Washington and Idaho. To be eligible, producers must comply with all state and federal laws, have at least one year of history growing the crop and have a contract for sale in place.

Thiel said the policy, developed by the Texas-based consulting company AgriLogic, was “one of the fastest developments ever for an insurance product.” He expects it will be released soon by USDA officials, with a signup date of March 15.

The 2019 growing season proved exceptionally challenging for Oregon hemp producers. Early rains in the Willamette Valley forced growers to harvest early or risk losing whole fields to gray mold. In Central Oregon, a devastating hail storm damaged an estimated 400 to 500 acres of hemp last August.

“Crop insurance covers natural causes of loss,” Thiel said. “It’s not going to make you rich, but it is going to make a difference staying in business.”

With federal crop insurance, policies are developed and subsidized by the government though they are sold through private insurance companies.

George Harris, a crop insurance agent with Northwest Farm Credit Services, said the biggest tripping point for hemp growers will likely be ensuring the crop does not exceed the 0.3% tetrahydrocannabinol, or THC, threshold. If hemp tests “hot,” then it is considered marijuana, which is still illegal under federal law and must be destroyed under interim USDA regulations.

Crop insurance would not cover those losses, Harris said.

“If you go above that THC level, it is going to be uninsurable,” he said.

Since Oregon implemented its hemp pilot program under the 2014 Farm Bill, it has tested only for “delta-9” THC under the 0.3% limit. But federal rules call for testing “total THC,” including tetrahydrocannabinolic acid that can convert to psychoactive delta-9 form when heated.

Some growers have expressed concern that it will be impossible for them to produce hemp in compliance with the USDA’s interim rule. Oregon’s two U.S. senators, Ron Wyden and Jeff Merkley, have urged the agency to reconsider the THC requirement in its final rules.

Mary Lou Burton, who coordinated the two-day Hemp & CBD Connex Conference — previously named the Cannabis Collaborative Conference — said the event was intended to connect growers, processors and consumers while educating the public about hemp products.

“We turned to hemp and CBD because there’s so much chaos out there,” Burton said.

Burton said 2,100 people registered for the conference, which featured 110 vendors, 30 educational seminars and 60 speakers. The trade show also included a CBD marketplace, where businesses could sell products including oils, creams and edibles infused with the plant-derived compound.

“It’s our goal to just help as many people as we can,” Burton said. “This is not the field of dreams. This is not like planting a traditional crop.”