How can experience of hemp sowing insurance in the USA be useful to Ukrainian companies
Unlike the United States , where crop insurance mechanisms have been operating practically since the first year of legal cultivation of industrial hemp industrial crops , in Ukraine only in 2020, members of the profile association of Ukrainian hemp growers for the first time raised the question of the necessity as well as the appropriateness of introducing an insurance institution in the industry .
The U.S. Department of Agriculture is implementing two pilot hemp crop insurance programs in 2020 . Understanding that you can insure yourself in the most economically developed country in the world , the information received from your American colleagues can be further tried to be organized in appropriate procedures and on the territory of our country .
The insurance mechanism works so far only for cannabis-free cannabis
Since 2019, the U.S. Department of Agriculture has provided insurance coverage exclusively for industrial hemp crops . Despite this, the possibility of insurance indemnities to companies specializing in the legal cultivation of hemp , which is further used for medical purposes, is declared everywhere .
American cannabis growers can apply for two types of insurance claims.
The first program of the Ministry of Agriculture of the USA , Multi-Peril Crop Insurance (MPCI ), offers protection from the insurance case has arisen from various natural causes, including drought, excessive moisture, frost and disease seeding hemp plant . The MPCI often includes profitability protection and price protection against market fluctuations .
MPCI offers 50/55 coverage against insured losses, which means that if production falls below 50% of the average agricultural yield per season , losses are paid at 55%. Additional insurance conditions allow you to provide compensation for 75/100 percent of the coverage.
The second type of coverage of the Ministry is a program of assistance for uninsured farms from agricultural disasters (Noninsured Crop Disaster Assistance, NAP) . This insurance is offered in areas where there is no permanent federal crop insurance program . NAP base coverage starts at 50/55, with additional coverage available at a service charge. Coverage is $ 325 per crop or $ 825 per farmer in the county, but should not exceed $ 1950 for agricultural producers working in several counties.
Insurance Criteria
In order to apply for insurance, agricultural producers must have appropriate permits providing the opportunity to engage in hemp breeding or provide documents that they are engaged in this type of activity as part of a pilot research program . In addition to other requirements for the insurance of ordinary crops, agricultural producers must have at least one year of hemp cultivation history and provide an insured crop purchase and sale agreement , as well as have a minimum cultivation area of 8 hectares of industrial hemp industrial sowing or 2 hectares of legal hemp sowing plants with therapeutic properties .
MPCI coverage not available throughout the US
Currently, MPCI coverage is available only in several counties in individual states, including: Alabama, California, Colorado, Illinois, Indiana, Kansas, Kentucky, Maine, Michigan, Minnesota, Montana, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Tennessee, Virginia, and Wisconsin.
US administrative units offering a multi-level hemp crop insurance program
“Hot Hemp”
The conditions for non-compliance by the agricultural producer with the terms of the contract and its unilateral termination by the insurance company is to exceed the maximum limit for the amount of tetrahydrocannabinol in the plant . In the USA, such crops are called “Hot Hemp” - hot hemp (the limit for the amount of THC exceeds 0.3%).
Commentary experts of the Association " Ukrainian industrial hemp "
In contrast to the United States , where crop insurance mechanisms have been operating practically since the first year of legal cultivation of industrial hemp industrial crops , in Ukraine only in 2020, the members of the profile association of Ukrainian hemp growers first raised the question of the need and the feasibility of introducing an insurance institution in the industry . Unfortunately, it should be noted that at the moment there is no effective mechanism for insurance of legal crops of technical hemp in our country . We have to admit that this circumstance is one of the negative factors that negatively affect the market of modern hemp breeding in Ukraine and make it uncompetitive in comparison with our colleagues from other economically developed countries of the world .