Hemp Industry’s Recovery at Risk as Farm Bill Progresses Slowly

Hemp industry’s recovery may face more obstacles due to the delayed progress of the Farm Bill

There is a significant delay in enacting the upcoming U.S. Farm Bill, which could further hinder the hemp industry’s recovery after two years of historically low production.

The Farm Bill is a nearly $1 trillion spending package that authorizes agriculture and food policies. It covers a wide range of issues, including crop subsidies and nutrition assistance programs. It is a once-in-five-year opportunity to advance the goals of the hemp industry. This year, the legislative package can provide a desperately needed reset to clarify hemp rules for businesses and protect consumers.

The 2023 bill (officially known as the Agriculture Improvement Act of 2023) represents one of the few measures that are almost guaranteed to pass in the politically divided Congress. However, delays in resetting the House of Representatives Republican leadership last month contributed to a slow pace for the Farm Bill.

Usually, lawmakers finalize the complex provisions of the bill by the end of the year it is scheduled for updating. It is possible that Congress may pass a short-term extension of the current Farm Bill to allow more time for negotiation of a new bill. However, it is also possible that the new Farm Bill will not be enacted until 2024 or even later.

Critical hemp issues

The 2018 Farm Bill legalized hemp at the federal level but left certain important issues unresolved. One of the most important issues is the regulation of CBD as a food additive and dietary supplement. Currently, the U.S. Food & Drug Administration (FDA) does not allow CBD to be added to food or marketed as a dietary supplement. The Farm Bill could change this by allowing CBD to be more widely available and used in end products. Clear rules would protect consumers from potentially unsafe CBD products and provide a clear playing field for growers and processors.

Another critical issue is the establishment of a framework to address delta-8 THC and other psychoactive compounds derived from hemp. This framework would ensure the safety and consistency of these products and provide guidance on their sale under specific conditions. Delta-8 THC is a synthetic CBD-based product that mimics the “high” of marijuana. The unregulated and often unsafe products have proliferated rapidly.

Stakeholders are also hoping for an increase in the allowable THC levels in hemp “on the field” from 0.3% to 1.0%. This change would alleviate farmers’ concerns about their crops exceeding the legal limit and becoming useless.

Funding at risk

If the Farm Bill is pushed back to 2024, specific ongoing funding programs that could benefit hemp growers will be at risk. These programs include the National Organic Certification Cost Share Program and the Environmental Quality Incentives Program (EQIP). The EQIP is a voluntary program that provides financial and technical assistance to agricultural producers for improving or protecting natural resources on their land. Farmers can receive up to $450,000 for qualified projects through EQIP. In 2023, the EQIP budget funded by the Farm Bill was $1.7 billion.

The 2023 Farm Bill could also allocate funding for research into the health and economic benefits of hemp, supporting the development of new hemp-based products.

The next Farm Bill could also benefit the hemp industry by:

  • Providing more USDA funding for state hemp programs;
  • Extending subsidies to hemp, similar to other crops;
  • Lifting the ban on felons operating in the industry;
  • Allowing the use of hemp grain for animal feed.

Challenging negotiations

Negotiating the Farm Bill is tough due to fundamental disagreements between Republicans and Democrats on major issues, such as the SNAP food program. These disagreements often cause delays. Additionally, Congress is dealing with other pressing matters, including the budget and national security.

Observers have noted that if the Farm Bill is pushed to 2024, some lawmakers may be reluctant to vote on it in an election year. They fear that their opponents could use their vote against them.

In 2022, the total acreage of U.S. hemp fields harvested dropped by nearly 50% to just 18,251 acres, according to figures reported to the U.S. Department of Agriculture (USDA). In 2021, American farmers harvested approximately 33,500 acres of hemp, which was the first year the USDA officially recorded industrial hemp data. Indicators suggest that little improvement or growth can be expected in 2023.

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