The Cost of Crop Insurance Takes a Big Bite; Value of Industrial Hemp

Farmers cannot afford to spend more on crop insurance. Michael Swanson, the chief agricultural economist at Wells Fargo, told the Crop Insurance and Reinsurance Bureau recently that if federal crop insurance premiums decrease, farmers will reduce their coverage levels. He said farmers currently spend about four percent of their budget on crop insurance premiums. Swanson explained that a typical crop farmer’s spending includes 30 percent of the budget for land rents, 26 percent on manufactured inputs including machinery, 10 percent for seed, 10 percent for farm labor and six percent for crop chemicals and that the cost of crop insurance has been about the same for the past 15 years.

Seed CX has applied to become a trading venue for industrial hemp. The cousin plant to marijuana is found in products such as fabric, shampoo, plastics, building materials and even food. 27 states have passed laws related to industrial hemp as Kentucky, Tennessee and Colorado accounted for most of last year’s crop. Hemp production in the U.S. previously peaked at more than 150 million pounds during the Second World War.