We are currently wrapping up the 2019 Crop Year and there is no Hemp Crop Insurance. For 2020 you are able to pick up some coverage for Hemp via Whole Farm Revenue Protection, but there is not a standalone Hemp Crop Insurance product. Current speculation is the 2021 Crop Year will be the year for Hemp Crop Insurance.
We could just sit back and wait for the Federal Government to deliver a comprehensive Federal Crop Insurance program for Hemp, or we could learn more about how Crop Insurance works. By doing so we can be better educated in our lobbying efforts to get meaningful policy in place for Hemp Growers.
Federal Crop Insurance is a big scary animal. There are so many rules and regulations that are ever changing, but at the end of the day the foundation of the Crop Insurance program is sound. It works for Farmers all over the United States and for a wide variety of Crops they grow. To help us gain a better understanding of how Federal Crop Insurance works I will be leaning on my family's history of insurance Central Montanan Winter Wheat Farmers.
For Crop Insurance purposes Winter Wheat production is measured in Bushels.
To kick things off I thought we would start with explaining a very important concept: Actual Production History (APH).
A Farmer will use his/her production history, or APH, on their Federal Crop Insurance policy. An APH is a database made up of 10 line items. You are required to have a minimum of 4 line items in order to figure out your Average APH. Don't have 4 line items worth of history? No problem. We can plug in a County T-Yield for each line item you are missing to come up with a minimum of 4 line items. Then we average those line items to come up with your APH.
There are some key points to take home here - line item = 1 year of production in a given Unit/Database. You could seed a Unit every year and your 10 line items would go back in time 10 years, or you could seed every other year and your database could go back 20 years, or any combination you can think of. Below are some examples to shed some light:
Example One -
A producer seeds half a section of land each year and alternates the half sections every year. One year the East half is seeded and the West half is fallow. The next year the West Half is seeded and the East half is fallow. You get the idea.
The producer does this for 20 years. In his APH the 10 most recent years of production history would show up. See below:
As you can see each year there was a crop seeded in this "Unit" / "Database" so there is a line item for each year.
A Producer seeds half a section every other year aka Summer Fallow winter wheat. He/she does this for 20 years. In his/her APH the 10 most recent years of production history would show up, but they would go back 20 years in time. See below:
To figure out the Average you...umm...well, take the average, duh! Don't know how to figure out an Average? Click here
You now know how to figure out your APH...wahoo! However, there are lots of Options you can elect that will help you inflate your APH number. To be continued....
I do hope you learned something. Keep in mind this is intended to build upon each entry to help you get a better understanding of the basics of Federal Crop Insurance. The hope is that by the 2021 crop year there will be Federal Crop Insurance for Hemp, and you will already know what you want and how it works! Subscribe, follow us on Instagram, and check out our Website for more info!