Ag Policy Blog

Lawmakers Raise Questions About Hemp Insurance

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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Hemp production is growing in several states across the country. USDA will offer whole farm insurance coverage including hemp in 2020. Lawmakers raised some concerns about how that will work. (DTN file photo)

Lawmakers have some concerns over just exactly how USDA is going to create a crop insurance program for hemp.

Multiple members of the House Agriculture Committee raised the issue of hemp and crop insurance on Thursday during a hearing with Bill Northey, USDA's undersecretary for Farm Production and Conservation.

Rep. Collin Peterson, D-Minn., chairman of the committee, said he had been investigating insurance issues with hemp. "I don't see how in the world you are going to be able to come up with a product for hemp," Peterson said.

Northey indicated USDA was looking to add hemp to whole farm policies, but there are still questions about pricing hemp. There are also some companies looking at offering individual policies as well.

The Risk Management Agency announced in late August that whole farm coverage for hemp fiber, seed and flowers will be available for the 2020 crop year. https://www.rma.usda.gov/…

Rep. Mike Conaway, R-Texas, ranking member of the committee, said he also had some concerns about insuring hemp. Conaway said there are risks of tetrahydrocannabinol (THC) rising when hemp dries up. THC is the chemical that creates the intoxication in marijuana. THC must not be more than .3% in hemp, but Conaway indicated THC can rise under dry conditions.

"We're going to be insuring an illegal product," Conaway said.

Rep. James Comer, R-Ky., was the Kentucky agriculture commissioner when the state created a pilot project for hemp production. Comer called hemp "a huge success story" in his state, but Comer told Northey he shares Peterson's concerns about crop insurance. Comer said he doesn’t want to see a crop insurance product that takes away the market risk of growing a crop and he doesn't want to encourage fraud because of the potential payouts.

Comer said he thinks an insurance policy should only cover what a hemp farmer has a contract to sell. "I don't want to see a situation where a farmer has a contract to sell that they have 30 or 40 acres of hemp and they plant 100 or 200 acres," Comer said.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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