Recent changes in the law regarding hemp as a cash crop have stimulated a rapidly growing industry. Hemp delivers a host of products for applications such as textiles and pharmaceuticals. As with any agricultural business, the loss of a crop due to unforeseen events is a factor. Cultivators must take these risks into consideration. Methods of industrial hemp crop risk management are not too dissimilar from other cash crops. Some notable differences do exist which must be taken into account. Here are some key points to keep in mind.
Types of Insurance Protection
Varying types of coverage ranging from crop, processor and CBD insurance are available. Consulting with a knowledgeable agent helps determine which policy is best suited to a given operation. Policies for crop loss due to fire or theft differ from policies covering plant processors.
The legal status of hemp and its close relative marijuana complicate this plant’s cultivation. Concentrations of the psychoactive compounds in plants may affect insurance coverage. While hemp cultivation has been legalized in some areas, exceeding compound limits may change a crop’s status.
The U.S. Department of Agriculture’s Risk Management Agency (RMA) has recently announced subsidized insurance coverage for industrial hemp crops. Further information can be found on the USDA’s website.
The role of industrial hemp appears to be gaining ground in agriculture today. The insurance industry is responding to risk management needs in hemp cultivation. Successful operation requires an understanding of coverage details and the selection of appropriate policies.