Hemp Farmers Now Eligible For USDA Coronavirus Relief Program

The U.S. Department of Agriculture (USDA) announced on Friday that it is expanding its coronavirus relief program for farmers—and this time around, hemp cultivators are eligible for benefits.

In May, USDA said it would be making $19 billion available for agriculture producers to assist them amid the pandemic. But it excluded hemp and several other crops, stating that they don’t qualify because they didn’t experience a five percent or greater price decline from January to April. Industry stakeholders contested that point, arguing that there’s insufficient data to establish that given how young the newly legal market is. They said they were suffering just like other sectors.

It seems the department got that message and chose to accommodate the industry. A new round of funding through USDA’s Coronavirus Food Assistance Program (CFAP) includes a payment category for “flat-rate crops” that lists hemp as eligible.

“Crops that either do not meet the 5-percent price decline trigger or do not have data available to calculate a price change will have payments calculated based on eligible 2020 acres multiplied by $15 per acre,” USDA said in a notice. “These crops include alfalfa, extra long staple (ELS) cotton, oats, peanuts, rice, hemp, millet, mustard, safflower, sesame, triticale, rapeseed, and several others.”

Jonathan Miller, general counsel at the U.S. Hemp Roundtable, told Marijuana Moment that the group is “thrilled” to see USDA take this step, though some stakeholders are saying that the calculation the department is using to determine benefits under the program “might not be as generous as for some other crops.”

“This is a very significant development for the industry,” he said. “We just want to be sure that our farmers are treated fairly just like other farmers.”

The office of Senate Majority Leader Mitch McConnell (R-KY), who has championed the industry and helped advance the crop’s legalization, highlighted the policy change.

#Kentucky#hemp & tobacco farmers are now able to receive aid from @SenateMajLdr McConnell’s #CARESAct. Starting Monday, growers can apply for relief at their local @usdafsa office. Thanks to @realDonaldTrump & @SecretarySonny for looking out for farmers.https://t.co/3XzFIpXpSz

— Senator McConnell Press (@McConnellPress) September 18, 2020

The Virginia Department of Agriculture also touted the news.

.@USDA announced the release of another $14 billion under the Coronavirus Food Assistance Program, and this time, #hemp#farmers are eligible to apply. #CFAP#CFAP2https://t.co/TzonZeqqR1

— VDACS (@VaAgriculture) September 18, 2020

In April, Congress approved a COVID-19 package that made hemp businesses eligible for federal disaster relief through the Small Business Administration (SBA).

For the past two years since hemp was federally legalized through the 2018 Farm Bill, USDA has been hard at work developing regulations and reaching out to the industry to ensure that the market has the resources to thrive.

This month, for example, it reopened a 30-day public comment period on its proposed rules for the crop in order to gain additional feedback on a number of provisions that stakeholders had expressed concern about. SBA recently asked USDA to extend that comment window. The department’s rule for hemp, when finalized, is set to take effect on October 31, 2021.

In July, two senators representing Oregon sent a letter to Perdue, expressing concern that hemp testing requirements that were temporarily lifted will be reinstated in the agency’s final rule. They made a series of requests for policy changes.

Sen. Cory Gardner (R-CO) called on USDA to delay the implementation of proposed hemp rules, citing concerns about certain restrictive policies the federal agency has put forward in the interim proposal.

Senate Minority Leader Chuck Schumer (D-NY) last month wrote to Perdue, similarly asking that USDA delay issuing final regulations for the crop until 2022 and allow states to continue operating under the 2014 Farm Bill hemp pilot program in the meantime.

As it stands, the earlier pilot program is set to expire on October 31. The senators aren’t alone in requesting an extension, as state agriculture departments and a major hemp industry group made a similar request to both Congress and USDA last month.

Perdue has said on several occasions that DEA influenced certain rules, adding that the narcotics agency wasn’t pleased with the overall legalization of hemp.

As all of this rulemaking continues, USDA has been systematically approving hemp plans from states and tribes. Utah is the latest state to have its proposal approved.

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Photo courtesy of Brendan Cleak.

USDA Announces Two More Hemp Insurance Programs

The U.S. Department of Agriculture (USDA) announced on Thursday that hemp farmers are now eligible for two crop insurance programs that offer coverage in the event of natural disasters.

The first pilot program, Multi-Peril Crop Insurance, will be available for farmers in select counties in 21 states for the 2020 crop season. It provides coverage for crop losses attributed to weather, fire, disease and other natural events. Hemp cultivated for fiber, grain or CBD qualify for the program.

🚨 We've announced details of 2 risk management programs for hemp producers. Producers may apply for both programs now through March 16, 2020 – https://t.co/epYYUCKZpH#hemppic.twitter.com/dyVuYl1Khb

— Dept. of Agriculture (@USDA) February 6, 2020

Only hemp farms that have been operating for at least a year and have a contract to sell the crop are eligible. USDA set a minimum acreage requirement for coverage: five acres for hemp grown for CBD and 20 acres for grain and fiber. The department also stipulated that the crop will “not qualify for replant payments or prevented plant payments” under the program.

The second insurance option is called the Noninsured Crop Disaster Assistance Program. If no permanent federal insurance option is available, hemp farmers can apply for this program, which would also cover losses for hemp grown for fiber, grain, seed or CBD for the 2020 season.

USDA would cover 55 percent of the average market price for hemp losses exceeding 50 percent of the expected yield. In certain circumstances, buy-up coverage would also be available. Under the 2018 Farm Bill, which federally legalized hemp and its derivatives, the program covers 50 to 65 percent of the expected production in five percent increments at the full market price.

.@USDA today announced the availability of two programs that protect hemp producers’ crops from natural disasters. Producers may apply now until March 16, 2020. Read more: https://t.co/OZLHMOXDQj#Hemppic.twitter.com/1zmVBmIits

— Risk Management Agency (@usdaRMA) February 6, 2020

To qualify for either program, farmers must be licensed to cultivate hemp under either the 2018 or 2014 Farm Bill, and they must be compliant with all federal, state or tribal rules. USDA emphasized that hemp is defined under federal law as containing no more than 0.3 percent THC. If the crop exceeds that level, it’s ineligible for coverage.

“We are pleased to offer these coverages to hemp producers,” USDA Farm Production and Conservation Undersecretary Bill Northey said in a press release. “Hemp offers new economic opportunities for our farmers, and they are anxious for a way to protect their product in the event of a natural disaster.”

Farmers have until March 16 to submit applications for either program.

The office of Senate Majority Leader Mitch McConnell (R-KY), who led the effort to legalize hemp through the 2018 Farm Bill, thanked USDA for “quickly bringing a much-needed safety net to farmers.”

.@USDA launches a multi-peril crop insurance plan for #hemp in 21 states, including #Kentucky. @SenateMajLdr McConnell's initiative in the 2018 farm bill helped make today’s announcement possible. Thanks to USDA for quickly bringing a much-needed safety net to farmers. https://t.co/ZeqLK0PIgt

— Senator McConnell Press (@McConnellPress) February 6, 2020

This is the latest insurance development to come out of USDA since hemp was legalized. Last year, the department announced that the crop is eligible for Actual Production History insurance, which also covers losses due to natural disasters. Starting in 2021, hemp can also be covered through the Nursery crop insurance program and the Nursery Value Select pilot crop insurance program.

USDA has taken several steps to ensure that hemp is treated like any other agricultural commodity since the Farm Bill was signed into law. After releasing an interim final rule for the crop last year and holding a public comment period—which saw thousands of advocates and stakeholders weigh in and recommend certain changes—the department has started accepting a series of stateand tribal hemp regulatory plans.

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Congress Attaches Marijuana, Hemp And CBD Provisions To Federal Spending Bills

The House and Senate have agreed to include a variety of marijuana, hemp and CBD provisions in reports attached to appropriations legislation that President Trump signed into law on Friday.

Although more sweeping provisions that passed the House—such as measures shielding all state and tribal cannabis programs from federal interference and protecting banks that service state-legal marijuana businesses—were omitted from the Fiscal Year 2020 spending legislation following the merging of the two chambers’ versions, the report language that came out of the bicameral negotiations reflects growing bipartisan interest in researching cannabis and ensuring that hemp legalization is effectively implemented.

One provision directs the National Institute on Drug Abuse (NIDA) to “provide a brief report on the barriers to research that result from the classification of drugs and compounds as Schedule I substances” under federal law within 120 days. There’s widespread recognition, including from the head of NIDA, that the Schedule I status of marijuana has inhibited studies into the plant’s effects.

Another passage encourages the National Institutes of Health to “consider additional investment in studying the medicinal effects and toxicology of cannabidiol and cannabigerol.”

The negotiators also agreed that the Agency for Healthcare Research and Quality should issue at least $1 million in grants to research whether CBD and kratom can serve as alternatives to opioids.

“Little research has been done to date on natural products that are used by many to treat pain in place of opioids. These natural plants and substances include kratom and cannabidiol,” the provision says. “The agreement recommends no less than $1,000,000 for this research and directs AHRQ to make center-based grants. Such research should lead to clinical trials in geographic regions which are among the hardest hit by the opioid crisis.”

Additionally, the report allocates $2 million for Food and Drug Administration (FDA) efforts to develop regulations for hemp-derived CBD.

It’s meant to be used for the “research, policy evaluation, market surveillance, issuance of an enforcement discretion policy, and appropriate regulatory activities with respect to products under the jurisdiction of the FDA which contain CBD and meet the definition of hemp,” lawmakers said.

FDA is required to submit a report within 60 days “regarding the agency’s progress toward obtaining and analyzing data to help determine a policy of enforcement discretion and the process in which CBD meeting the definition of hemp will be evaluated for use in products.”

Congress is also directing FDA to “perform a sampling study of the current CBD marketplace to determine the extent to which products are mislabeled or adulterated” and report back to lawmakers within 180 days.

Separately, lawmakers set aside nearly $16.5 million in funding to support the implementation of a domestic hemp program under the 2018 Farm Bill, which legalized the crop and its derivatives.

“This funding will ensure hemp farmers have certainty heading into the next planting season,” an explanatory document says.

Another $1 million was earmarked for revenue protection insurance for hemp.

“Hemp producers across the country are looking to Kentucky for our expertise and leadership with this exciting crop, and I’m committed to helping our farmers, processors and manufacturers take full advantage of hemp’s potential,” Senate Majority Leader Mitch McConnell (R-KY) said in a press release. “These federal resources will help us continue our progress to ensuring hemp is treated just like every other legal commodity.”

.@SenateMajLdr Senator McConnell Secures #Kentucky#Hemp Priorities.@KYAgCommish: "It is McConnell’s leadership that has made this possible."https://t.co/Ox5v2h6f5e

— Senator McConnell Press (@McConnellPress) December 18, 2019

“As Kentucky farmers prepare for the 2020 growing season, I’ll continue advancing their priorities as Senate Majority Leader so they have the tools needed,” he said.

Earlier this year, @KYAgCommish announced that approximately $100 million worth of #Kentucky-grown and processed #hemp products are expected to be sold this year alone. pic.twitter.com/g0tflLTGLP

— Senator McConnell Press (@McConnellPress) December 18, 2019

McConnell took credit for a series of other provisions included in the legislation, such as $2 million for hemp research, a measure directing the Farm Credit Administration to provide services for hemp businesses, a ban on the federal government blocking the production or sale of the crop, support for competitive U.S. Department of Agriculture grants for hemp projects and a provision meant to promote technology that would help law enforcement distinguish between hemp and marijuana.

The spending legislation also continues a rider that blocks the Department of Justice from interfering with the implementation of medical cannabis programs that has been part of federal law since 2014, though it also contains a provision barring Washington, D.C. from spending its own local tax dollars to legalize and regulate recreational marijuana sales.

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This story was updated to note that the president signed the legislation into law.

Photo courtesy of Brian Shamblen.