Industrial hemp is a hot commodity, with people clamoring to produce the fast-growing plant. Now, thanks to the 2018 Farm Bill and a USDA rule issued this week, producers anywhere in the country can grow, harvest and sell industrial hemp. (Prior to the 2018 bill, producers only could grow hemp if they were operating under a 2014 Farm Bill state or university pilot program.) The regulation defines industrial hemp and includes testing protocols to ensure that hemp grown under the new U.S. Domestic Hemp Production Program is hemp and nothing else.
The rule also enables us to determine industrial hemp producers’ eligibility for USDA farm programs, such as crop insurance, farm loans, disaster assistance and conservation programs.
Beginning with the 2020 crop year, producers who want to grow hemp must do so under a federal, state or tribal hemp plan approved by USDA. They also will need to file a USDA acreage report with their federal, state, or tribal-issued production license or authorization number. To secure this license producers must identify each field or subfield, including greenhouses, on which hemp is planted and detailing the crop’s intended use – fiber, grain, seed or processing.
USDA is working to provide licensed growers with access to many of the programs and resources traditionally offered to America’s farmers. Among the USDA programs for which hemp producers could be eligible are various Farm Service Agency (FSA) loans, including operating, ownership, beginning farmer and farm storage facility loans. Starting in January 2020, hemp producers also will be able to sign up for FSA’s Noninsured Crop Disaster Assistance Program, or NAP, which provides coverage for crops adversely affected by weather and natural disasters where traditional crop insurance is not available.
Additionally, USDA’s Risk Management Agency (RMA) will offer Whole-Farm Revenue Protection to diversified farmers who grow hemp, beginning with the 2020 crop year. That risk management product covers revenue for all commodities produced on a farm up $8.5 million. In addition to operating under a USDA-approved hemp plan or a state or university research pilot program, hemp producers who want to purchase that revenue protection coverage must have a contract with a buyer for the insured industrial hemp.
USDA will continue to work with all hands-on deck to ensure hemp producers have access to resources and programs offered through the Department that are meant to help them be successful. Among these prioritized efforts is RMA’s commitment to monitor market impact, as well as yield and price data to ensure hemp will qualify for replant payments under RMA’s revenue protection insurance as soon as possible following the 2020 crop year. As we continue to work to include hemp in additional USDA programs, it is important to note the Federal Crop Insurance Corporation recently encouraged the private sector to develop and submit for consideration additional risk management products specifically for hemp growers.
At USDA, we are always excited when there are new economic opportunities for our farmers, and we hope the ability to grow hemp will pave the way for new products and markets.
Given the strong interest among farmers across the nation about this new economic opportunity, it is clear there is a promising future for industrial hemp and much to be learned as the market for it develops and matures. And just like farmers of other commodities, many hemp producers will need financing to run their operations and products to help manage their risks. USDA has programs to meet those needs, and growers of industrial hemp should consider using them.
Bill Northey is a fourth-generation corn and soybean farmer from Spirit Lake, Iowa, and Under Secretary for USDA’s Farm Production and Conservation mission area.