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In July, Agrilogic, LLC announced initial states to be included in the crop insurance pilot program for industrial hemp. Virginia was excluded. Our agency began lobbying for Virginia farmers via numerous meetings, calls, and emails to congressional members.
Without the letter from both Senator Warner and Kaine along with U.S. Representatives Riggleman, Beyer, Griffith, Cline, and Spanberger, Virginia would have been left behind. As a result of our combined efforts Virginia is being included in the pilot program. Once FCIC releases program details we will provide further information.
On behalf of J T Davis Insurance Agency Inc. we would like to thank everyone that assisted in submitting data to Agrilogic, LLC. Feel free to contact us with any questions at 1-800-248-5480.
Doug Ford reports for The Gazette-Virginian. Contact him at firstname.lastname@example.org.
Game changer: Virginia now included in hemp crop insurance program
Halifax County farmer Garland Comer breathed a sigh of relief when he got the news he considers a “game changer” for hemp farmers in Virginia, after a bi-partisan effort by Virginia Congressional members helped secure the state’s inclusion in a hemp crop insurance pilot program.
The 34-year-old farmer had added 10 acres of hemp this growing season to 280 acres of tobacco, 120 acres of corn and 500 acres of soybeans on his Vernon Hill farm.
He plans to grow more hemp now that Virginia was added to a list of 12 states already included in the pilot program by AgriLogic Consulting, a private company developing a federal yield-based industrial hemp crop insurance program on behalf of the U.S. Department of Agriculture.
It took a grassroots effort beginning in Halifax County to get Virginia included in the pilot hemp insurance program, according to Comer.
“J.T. (Davis) got some information we were going to get left out of the deal, and he called me and Robert Mills and other folks,” said Comer.
Drafts of the pilot program initially did not include Virginia, and that would give hemp growers in other states such as North Carolina a distinct and overwhelming advantage, explained Comer.
It’s simply a matter of economics and how much risk a hemp farmer is willing to assume without insurance, he said.
The Vernon Hill farmer estimates he has invested from $15,000 to $18,000 an acre for 10 acres of hemp this growing year, but now he can increase his acreage with the ability to get his hemp crop insured.
He gives Davis, long-time ED-1 supervisor, and employees of J.T. Davis Insurance much of the credit for lobbying efforts toward getting Virginia included in the pilot program.
“If it wasn’t for J.T. and his people getting us in front, we would have been passed by,” he explained.
Virginia Congressional members helping in efforts to have the state included in the pilot program included Democratic Senators Mark Warner and Tim Kaine, along with Republican representatives Morgan Griffith, Ben Cline and Denver Riggleman and Democratic representatives Don Beyer, Elaine Luria and Abigail Spainhour.
If it were not for the political pressure put on AgriLogic, Virginia would not have been included in the hemp crop insurance program, according to Davis, who predicts an increase in hemp production the next growing season that will attract processors.
AgriLogic Consulting is a private company contracted by the Federal Crop Insurance Corporation to develop a crop insurance program for industrial hemp starting with year 2020, according to Davis.
Virginia would have been “left in the dust” if not included, he noted, with states such as North Carolina, Kentucky and Tennessee gaining the advantage.
Davis and employees of J. T. Davis Insurance Agency, including new owner Jason Parker and staff, joined Comer, Pittsylvania County farmer Robert Mills and Dale Powell of Danville in an initial meeting with Kaine’s staff members in Danville several months ago.
“We knew the answer involved political involvement and to put pressure on AgriLogic to include Virginia,” said Davis. “They made the argument that they can’t afford to move forward without some kind of risk management program that would protect their investment.”
The stakes are high for Halifax County and Virginia as a whole, Davis added, with a jump from 135 acres in hemp and 85 growers in 2018 to 11,000 acres and over 1,000 licensed growers in 2019 throughout the state.
Davis said he has seen figures estimating industrial hemp will be a $22 billion business by 2022.
Hemp products includes food, paper, clothing, building materials and personal care products.
Hemp farmers plan to take the next step
Mills, a Callands farmer who grew six and one-half acres of hemp this growing season, plans to expand his hemp crop after receiving the good news.
“I had six and a half acres of hemp this year, my first year of growing CDB extraction hemp,” explained Mills. “There is no insurance in place, and that’s why we grew only six and one-half acres. That’s all the risk we were willing to take growing a crop without any insurance.”
Mills agreed access to crop insurance for hemp is a game changer for Virginia, pointing to the investment of from $12,000 to $15,000 an acre for industrial hemp with no safety net.
“When you grow a row crop, you are at the mercy of Mother Nature, and this year has been a terrible, terrible growing season,” said Mills.
Mills called his first year of hemp production a success as far as growing the crop but added he has to wait until final expenses are tallied until he knows his initial profit.
“We’ve done a good job with the hemp on small acres. We were able to irrigate it, and we won’t know until we sell it where we will be financially,” said Mills.
“I think we will call this year a success as far as growing it, and hopefully it will be a success when they buy it and look at our CDB levels.
“There’s a lot of demand and a lot of growers like myself who grow tobacco but want to transition into hemp, which can be grown on relatively small acres but can be profitable,” added Mills.
Congress approved the Agriculture Improvement Act of 2018, commonly known as the “Farm Bill” last year, which legalized and clearly defined hemp as an agricultural commodity and removed it from the federal list of controlled substances.
Comer began growing hemp this year after the Farm Bill was passed, starting with one, then two and then 10 acres of hemp.
There’re strict requirements for hemp growers, including licensing through Virginia Department of Agriculture and Consumer Services and tracking information such having every hemp field GPS-marked, according to Comer.
“You may have the prettiest plant out there, but if the THC level is too high, you have to destroy the crop,” said Comer, who called hemp a science experiment as much as anything else.
“We’re sending off samples every week to see the levels of THC and CBD and things like that. It’s really like a science experiment just as much as farming,” said Comer, who explained that with the availability of hemp crop insurance, farmers now have a “safety net” going into 2020.
Hemp processors are coming to tobacco producing states like Virginia because the labor, curing barns and infrastructure are already in place, Comer pointed out.
“We’re set up to grow this crop,” said Comer, who has made preliminary inquiries into securing a buyer/processor for his hemp crop now that hemp growers have the ability to secure loans and crop insurance.
There’s been talk of getting a processing facility for hemp in Halifax County now that growers have access to insurance, according to Comer.
“I hope this proves Halifax is politically motivated and wants things to work here,” he said. “I sure do appreciate political help in getting this done.”
Hemp is the perfect agricultural fit
Mills noted that due to small field acreage in Southern Virginia anything except crops like tobacco aren’t very profitable.
“We are somewhat limited because of the way the farms are fragmented, not like the Midwest with 100-acre fields, we have 10-15-20 acre fields,” explained Mills. “If we didn’t have the federal crop insurance and other states did, those states would take our market share we could potentially have here.
“We had a really good meeting with Tim Kaine’s office and had a really good forum with Congressman Riggleman,” said Mills.
“With legislators, industrial hemp is in an explosion market right now. There is not a lot of disposable income for us to make new investments in hemp, so we would be limited in the acres we grow because of the risk and potential risk. Hemp crop insurance does give us some reassurance and protection, so we can ramp up our acres, so Virginia can double if not triple our acreage next year.”
Mills said he has processors contacting him now wanting to know if he would broker them next year.
Crop insurance basically covers the cost of production, but just covering the cost of production is not a sustainable model, and hemp crop insurance gives growers a safety net where at least hemp growers can get their costs of production back in case of catastrophic failure such as a hurricane, hail storm or wind storm, according to Mills.
Looking at the tobacco situation and loss of markets due to tariffs and decline in the U.S. dollar, Mills is anticipating growing from 20-25 acres of industrial hemp next growing season, with the help of 11 employees, including himself and his son.
He has already begun the transition from tobacco to hemp and plans to cut his tobacco crop in half next year from 100 to 50 acres.
Mills agrees with Comer that equipment and infrastructure used for tobacco production can be used for hemp with little additional capital investment.
A thrasher/milling machine to take flowers off hemp is estimated to cost from $25,000-$45,000, and Mills said he was not willing to make that investment this year.
“I can’t say enough about our legislators and what they have done for us in Virginia,” said Mills. “This is going to give us an opportunity to expand our market and keep our farms viable.
“This gives me the ability to make a good financial decision for next year, as far as investing in a bucking machine and some reassurance as we move forward with hemp production.
“I’m so proud of our legislators listening to their constituents to help agriculture in Southside Virginia.”
Political pressure persuaded AgriLogic to add Virginia to the list of states to the pilot program, Davis pointed out.
“All of our battles that are significant will be fought in the political arena or lost in that arena, and this is a prime example of what it took to get it over the top,” said Davis.
“I met directly with Riggleman twice, and Jason (Parker) went to Chatham and met with Warner,” added Davis, noting that ED-2 supervisor Jeffrey Francisco also was heavily involved in the successful effort to have Virginia included in the pilot program.
“If there is a silver bullet for Southside agriculture, it is industrial hemp,” said Davis pointing to statistics that indicated Virginia saw a 27% decrease in tobacco acreage from 2018 to 2019.
Industrial hemp appears to be the right solution for a declining tobacco market in Southern Virginia, according to Parker.
“Tobacco farmers use the same transplanters to plant hemp as tobacco, and some use the same cultivating equipment if they don’t plant it under plastic,” explained Parker. “They can put it in bulk barns to dry it, and we already have workers in place.
“We worked diligently since July to make sure Virginia was included in this pilot program for 2020, and we reached out to the political side to make sure we got our point across,” added Parker.
“In July, when they (AgriLogic) came out with its webinar, Virginia was not one of 12 states included in the pilot program at that time. Our mission was to get Virginia added to that pilot program.”
And thanks to hard work, it has been added.