General Information

What 2020 Holds for Hemp Farmers

By November 18, 2019 No Comments
What 2020 Holds for Hemp Farmers

In 2020, things could start to get better for hemp farmers. Regulations for the industry should be out and more states should have their individual regulations approved by the USDA. Each state must have its proposed rules approved by the USDA in order for them to be implemented. Several states have already submitted their proposed regulations while many others are still writing theirs. This is what 2020 holds for hemp farmers.

Programs Open Up for Hemp Farmers

Hemp is now an agricultural crop. The USDA has determined interim final rules. Within those rules, hemp farmers are afforded the opportunity to partake in some federal programs. Hemp farmers will have to apply for these programs after receiving licensing from their state or American Indian tribe.

The programs areas available are:

  • Natural Resources Conservation Service
  • Farm Service Agency
  • Risk Management Agency

Within the Risk Management Agency, farmers will be able to apply for federal crop insurance. The eligible hemp farmers will be those that are cultivating hemp for flower, seeds or fiber. To be eligible for this insurance, the farmers have to provide proof of farm income.

For the Whole Farm Revenue Protection program, farmers must provide:

  • 3-year history of farm income for military veteran farmers or beginning farmers
  • 5-year farm income history
  • Contract or contracts for the purchase of the insured hemp crops

There will be additional types of insurance available once the Risk Management Agency gets things in place.

Now, if a hemp farmer doesn’t qualify for this type of crop insurance, there is another option called the Noninsured Crop Disaster Assistance program. If adverse weather conditions or a natural disaster occurs and damages the crop, the farmer may be eligible for assistance.

hemp flower in a glass jar with shake

Hemp Must Test At or Below 0.3% THC

Hemp crops must be tested for THC concentration. If any crop tests above 0.3% THC it must be destroyed. That crop will not be eligible for insurance or any other type of assistance even if weather does play a factor in crop failure.

It is important for hemp farmers to be diligent in choosing the seeds from reputable sources that have proven results that the crops test at or below that 0.3% THC level.

Loan Programs for Hemp Farmers

The Farm Service Agency is working on implementing a loan program for hemp farmers. The loans will be limited. These will be equal opportunity loan options.

Some of the types of loans that will be available include:

  • Operating loans
  • Ownership loans
  • On-farm storage loans
  • Beginning farmer loans

It isn’t known if there will be a cap on how much hemp farmers can apply for or if there will just be a set amount that these loans will be.

Hemp farmers will need to apply for these loans once their state has had its rules approved and they have received their applications. An acreage report will also need to be supplied to local Farm Service Agency offices.

The Interim Final Rules

The USDA has determined its interim final rules for hemp farming in the U.S. These rules are already in effect. Hemp farmers must be especially diligent in choosing the strain and seed source to ensure that their crops are testing at 0.3% THC or less. Any crop that tests higher will have to be destroyed and will not qualify for any kind of assistance program, as we mentioned above.

If a crop tests just above 0.3% THC to 0.5% THC, the hemp farmer will not be considered in violation, but the crop will still have to be destroyed.

The exact rules regarding sampling crops for testing purposes have not been set in place. It is unknown whether hemp farmers will have random sampling and inspections or if they will be scheduled.

Some of the guidelines in place for sampling procedures include:

  • Samples for THC concentration testing must be sent to a DEA registered lab
  • The samples must be taken within 15 days of the expected harvest date.
  • The person collecting the sample will be a USDA-approved sampling agent
  • States may use alternative sampling and testing procedures if they are able to produce similar types of test results

It may take some time for all parties to agree to proposed terms.

hemp seeds dried on stalk

Approval of State-Specific Rules for Hemp Farmers

The USDA has said it will work as fast as it can with American Indian tribes and individual states when it comes to approving proposed rules for hemp farmers in their respective locations. The USDA is supposed to approve or deny rules within 60 days of submission, but it appears that they are a little behind for the time being.

States and American Indian tribes are required to include the following information in their proposed rules:

  • THC testing protocols
  • Land tracking procedures
  • Information sharing practices with law enforcement
  • How they’ll comply with the handling of farm inspections and potential violations
  • How to dispose of plants that test above 0.3% THC

For hemp farmers to be able to grow the crop, the state they plan to grow it in must allow it. Some states, like Idaho and South Dakota still prohibit hemp cultivation, so those potential hemp farmers would not be able to do so until their states adopt specific legislation.

USDA Guidance Regarding Sales of Hemp

The USDA will determine standard regulations for the cultivation and sale of hemp products. Each state should use these guidelines, when they are made available, as a guide. If state law follows federal law, in this case, it will be much easier for hemp farmers to remain in compliance. The idea is to have a uniform industry where everyone is on the same page.

Closing Thoughts

Hemp farmers are expected to flood their state offices with applications once final rules are in place in each state. It is an exciting crop that many farmers could benefit from. It is a great option to add to crop rotations because it can be grown in almost any climate. It is best, however, to ensure that the soil that the hemp will be grown in is not contaminated as the plants will soak up whatever is in the soil. Have a soil test done before deciding that a part of your land will be dedicated to hemp cultivation.

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