USDA releases long-awaited hemp rule
The Agriculture Department today released the rule to establish the U.S. Domestic Hemp Production Program, and said it will be published in the Federal Register on Thursday and go into effect immediately.
Farmers have been waiting for the rule since the 2018 farm bill became law, and hemp production has already risen from 120,000 acres in 2018 to more than 500,000 acres this year.
But USDA officials today were cautious in their comments about the crop, which has not been grown for decades because hemp was classified as a drug due to the marijuana variety. But hemp is now seen by some as a savior for farmers in a period of low commodity prices and trade problems.
Agriculture Secretary Sonny Perdue was not present on the call to reporters today, but said in a prerecorded statement, “At USDA, we are always excited when there are new economic opportunities for our farmers, and we hope the ability to grow hemp will pave the way for new products and markets.”
Agriculture Undersecretary for Farm Production and Conservation Bill Northey said on the call, “We are at an interesting point with a brand new crop that offers a lot of hope to a lot of folks and we will see how it develops.”
A lot of the enthusiasm for the production of hemp has come from the grassroots, and the National Association of State Departments of Agriculture told The Hagstrom Report today that every state except Ohio, Mississippi, New Hampshire and South Dakota has a law which permits the production of hemp.
“We appreciate USDA’s objective to evolve hemp regulations as the industry matures,” NASDA CEO Barb Glenn said in a news release.
“We are all learning as this industry grows. The knowledge we have now will only multiply as the industry secures its place in American agriculture.”
Senate Majority Leader Mitch McConnell, R-Ky., and other Kentucky officials led the way for the legalization of hemp production but the enthusiasm is not universal.
South Dakota Gov. Kristi Noem, a Republican, continues to oppose authorization for hemp production in her state on the grounds that it legalizes marijuana “by default,” even though a state legislative committee is working on a bill to authorize it. (See link.)
Under the 2018 farm bill, states must authorize production of hemp, and the rule outlines provisions for USDA to approve plans submitted by states and Indian tribes for the licensing of farmers to grow the plant.
The rule also includes provisions for farmer reporting production to the Farm Service Agency, for the testing the levels of delta-9 tetrahydrocannabinol [THC], and for the disposal of plants that have a THC level above the legally allowed 0.3%.
As an interim final rule, it will go into effect immediately. But Agriculture Undersecretary for Marketing and Regulatory Service Greg Ibach on a call to reporters that USDA will accept public comments and issue a final rule after the 2020 crop season, so that the experience of farmers and regulators in the first year of production can be taken into consideration.
Ibach, whose division of USDA is in charge of the rule, said it also establishes a federal plan for producers in states or territories of Indian tribes that do not have their own USDA-approved plan. Ibach said that some states may authorize hemp production but not care to set up their own hemp programs and in those cases producers can get licenses from USDA.
Even if a state does not authorize production, it cannot prevent interstate transportation of hemp, which the farm bill removed from the list of controlled substances.
The rule states, “Nothing in this rule prohibits the interstate commerce of hemp. No state or Indian tribe may prohibit the transportation or shipment of hemp produced in accordance with this part and with section 7606 of the 2014 farm bill through the state or the territory of the Indian tribe, as applicable.”
The rule also follows the farm bill requirement that hemp must have a THC level of no more than 0.3%, and says that the hemp must be tested in a Drug Enforcement Administration-approved laboratory to determine that its THC level is not above 0.3%, which would be considered marijuana, still a controlled substance at the federal level.
Ibach noted that results may fall outside a line between hemp and marijuana and that there will be “a range of uncertainty” under which the results will be considered acceptable.
Northey noted that the rule makes hemp farmers eligible for USDA loan programs, disaster assistance, crop insurance and conservation programs, beginning in the 2020 crop year.
There are still many questions about the future of hemp.
Glenn noted that most of the interest in hemp products is in cannabidiol, or CBD, and she said NASDA advises the Food and Drug Administration to establish a well-defined regulatory framework for CBD products.
“Last year, hemp acreage quadrupled,” she said. “Understanding this, it can be expected that an incredible volume will be ready for processing at the end of the 2020 growing season.”
The transportation industry has said that an easy-to-use test for THC needs to be developed because drivers have been arrested for transporting what law enforcement officials considered to be marijuana.
When a reporter asked about the possibility that weather conditions in some parts of the country might result in a crop with a higher-than-acceptable THC content, Ibach and Northey said that USDA would not compensate farmers for the crop. Ibach noted that all crops have “risks and rewards,” and that farmers will learn that a variety of hemp seed will not perform the same in Florida as in Montana.
Northey said that the whole farm insurance policies for which growers will be eligible will not cover crops that have too high a THC level to be approved for sale.
–The Hagstrom Report