Ag leaders hanging hopes on hemp

Editor’s Note: Since this piece was published, the U.S. House Of Representatives also approved the Farm Bill by a margin of 386-47.  Advocates for hemp have high hopes for a new Farm Bill that would place the previously maligned plant in the same category as corn, cotton, cheese, or pork bellies.

No longer under control of the Drug Enforcement Agency, the United States Department of Agriculture will be head regulator of the nation’s hemp.

On Tuesday, the Senate passed the far-reaching bill by a margin of 87-13. The vote follows last month’s reconciliation of Senate and House versions of the 2018 Farm Bill. If the House follows the Senate’s lead, the bill will go on to the President’s desk to be signed into law.

The Hemp Farming Act of 2018 makes hemp a legal agricultural commodity, removing it from the list from the federal list of controlled substances and allowing growers to cultivate hemp commercially under a state or federal license. Hemp and marijuana are the same species, but hemp variants have a negligible amount – .3 percent –  of the psychoactive ingredient tetrahydrocannabinol (THC) that gives users a “high.”

Historically, hemp has been grown as a renewable resource. Its fibers and stalks have been used in rope, paper, and fabric while the seeds and flowers have been used in health foods and body care products. Vote Hemp, a lobbying arm of the Hemp Industries Association, reported 2017 annual retail sales for hemp products were estimated at $820 million.

Hemp began to make a comeback in 2014, when the previous Farm Bill included Sec. 7606, which authorized states to create pilot programs with hemp. According to Vote Hemp, 25,713 acres of hemp were grown across 19 states in 2017. Some 1,456 state hemp licenses were issued.

According to Eric Steenstra, president of the Hemp Industries Association (HIA), 2018 saw even bigger increases.

“We tripled our acreage to 77,700 acres planted,” he said. “We’re a little over 3,500 licenses issued across 23 states.”

Hemp in Vermont

According to the Vermont Agency of Agriculture, there are about 500 registered hemp growers this year, up from almost 90 in 2017. The number has grown steadily from 25 growers in 2015 and 41 in 2016.

The HIA reported acres of hemp grown in Vermont leapt from 180 acres in 2016 to 575 in 2017. According to the Agency of Agriculture, 3,000 acres were registered for 2018.

Cary Giguere, an agricultural resource management section chief for the Agency of Agriculture, said the contents of the final bill would be revolutionary for the state’s hemp farmers, allowing them access to insurance, banking, and Food Service Agency Loans from the United States Department of Agriculture.

“Those details are what’s going to affect Vermont and affect our program and the way we do business,” he said.

Legalization would allow farms and small businesses to apply for more grants in the areas of research, cultivation, production, marketing, and rural development.

For regulating hemp farms, the bill would give states a year to develop a state plan to replace existing hemp pilot programs. The bill includes requirements for record keeping, testing procedures, disposal procedures, enforcement components, and allows for random inspections by the state.

With compliance, farms will be able to receive grants in areas including production, marketing, value-added production, and rural development.

“I think there’s a ton of opportunity to get grant money into Vermont,” said Erica Campbell, an outreach representative with Sanders’ office in the areas of areas

of agriculture, food systems, nutrition, rural development, and transportation. “There’s also a lot of USDA rural development money and obviously hemp is going to be incredible for our rural communities so I think we can really bring in a lot of additional money that way.”

As hemp spreads to new states, more businesses encounter the question of tax implications. 26 U.S. Code Section 280E is the federal statute that barrs a business working in Schedule I or II substances from receiving tax deductions or credits.

“After the farm bill passes, we’ll try as best we can to make our rules comply with what would be a federal industrial hemp program,” Giguere said. “And hopefully a year after that we’ll be moving forward with our own Vermont USDA program.”

“Building a plane while it’s flying”

Heather Darby, an agronomic and soils specialist for the University of Vermont, spoke about increasing farmers’ access to reliable, high quality seeds.

“For many farmers, it’s been so difficult to access seeds,” she said. “With this bill, hemp becomes much like any other crop but with its own regulations. As far as if you’re growing corn or hemp, access to seed will change for people. It should be more doable, where it hasn’t been.”

Hemp farmers would be able to be involved in programs with the Natural Resource Conservation Service, an agency of the United States Department of Agriculture, provides technical assistance to farmers and other landowners. Public universities would be able to spend resources to research hemp.

“There’s a lot to know and a lot that people want to know,” Darby said. “We’re one hundred years behind on our research.

Farms would also be able to achieve organic certification, which had previously been withheld.

“Being certified organic has been a huge barrier to farms growing hemp,” she said. “They just haven’t been able to do that. They’ll be able to overcome those federal barriers once it becomes a crop, not a burden.”

No matter how federal and state regulations are structured, they will be catching up with a sector of agriculture that’s already well underway.

“We’re still building a plane while it’s flying,” Giguere said.

Both progressive and conservative legislators are feeling hopeful at the potential of hemp. Senate Majority Leader Mitch McConnell, speaking to his home state of Kentucky’s most influential farm group, expressed confidence.

“I’m not here to spike the ball in the end zone yet,” the Associated Press quoted him as saying. “But I think all the pieces are in place. And one of those pieces is the legalization of industrial hemp.”

On signing the final language of the bill, McConnell used a pen made of hemp to make it official.

Vermont Sen. Bernie Sanders said in a statement:

“The farm bill makes significant strides to end the national prohibition on hemp production. As a proud cosponsor of the Hemp Farming Act, I am pleased Congress is acknowledging not just the commercial applications of the crop but also, the potential economic benefits of hemp production for our rural communities. At a time when many farmers are struggling with low commodity prices and high input costs, hemp has huge potential to boost farm income and promote rural livelihoods in Vermont and throughout the country.”