The United States is the third-largest producer of Hemp in the world. Hemp is one of the varieties of cannabis Sativa. There is a great demand for hemp in the United States. This is because it is used in the textile industry, paper, and other composites. Their seeds can be used as food or crushed to produce oil. However, there is uncertainty in demand for the product. This is because there are a variety of substitutes for hemp.
Hawaii was the first town in the US to plant Hemp in December 1999. This project was funded by an oil company worth $200,000.Scientists approved its essentiality and later spread to other towns like Kansas, Maryland, Minnesota, Missouri, and Montana.
Industrial hemp can either be grown as a fiber or a seed crop. When grown for fiber, they are planted close to each other to maximize productivity. When grown for seed crops, they are planted further apart to allow the formation of branches.
In 1989 the European Union offered some regulation related to Hemp production. The Hemp farmers are expected to register their plantations. They are also to purchase the seeds which are certified. They are also supposed to invite an agricultural officer to test the THC content. They are required to state how they are to dispose of non-compliant plants. Finally, moderates to handle violations
The industrial Hemp does well in areas where corn produces high yields. It is grown on fertile loam soil incorporated with organic matter. It requires adequate moisture, especially during the first six weeks. For it to have high yields, plentiful nutrients are needed. Hemp diseases are not usually highly spread. They are usually controlled by rotation or seed treatment before planting.
USDA ensures the safety of import seeds from other countries like Canada. To ensure the authenticity of the seeds, a phytosanitary certificate from Canada national plant protection to show the plant origin and to verify the seeds are pest-free. Alternatively, A federal seed Analysis (SAC)certificate to show the seeds grown in Canada.
Under the agricultural act of 2014(farm bill), states agricultural sectors and institutions of higher learning were permitted to grow hemp for research purposes. The legalization of hemp production in the 2014 farm bill was extended by the 2018 farm bill. It was signed into law in December 2018.
The 2018 farm bill required USDA to formulate guidelines on the production of hemp in the USA.This
Regulation is to allow the monitorization of the Indian tribe that requires to have authority over Hemp production. Therefore they should register and submit their application to the secretary of the agricultural regulatory authority.
ECONOMICALIMPACTS OF LEGALIZATION OF INDUSTRIAL HEMP IN THE USA
Readily available substitutes of Hemp had diminished the production of Hemp in the U.S. Taking an example of Hemp fiber, it was used to make rope and clothing. It was replaced by Jute and Abaca
Which were cheaper and\ were imported from Asia. The products of these materials were light and portable. Besides they were durable since they were more resistant to saltwater compared to Hemp rope. Advancement in technology further led to the decline of hemp usage. An example of cotton harvesting. This was done using cotton gin which made it easy to harvest cotton. This made the textile industry to prefer cotton compared to Hemp.
Over the last five years, there has been a massive production of Hemp in the US. Between 2017 and 2018 Hemp production tripled. Acres of Hemp planted in 2018 were 8 times acres planted in 2016. Hemp plantation in 2019 is double 2018
Increase in demand for Hemp compared to other products. This has led to the planting of hemp to maximize supply. Prices of Hemp vary from the source of production. The price of hemp fiber ranges between $0.07 per pound to 0.67 per pound. Prices of Hemp seeds varies between $0.65 per pound to $1.70 per pound. Hemp flowers rich in cannabinoid cannabidol, their prices are between $3.50 per pound to $30.00 per pound. The massive production of Hemp has yielded high returns and maximization of sales volume. The number of licensed hemp farmers have doubled up to 3543 producers.
Hemp is one of the varieties of spices of cannabis Sativa. It is classified under the same class of Marijuana. The difference between Marijuana and hemp is their chemical content. Marijuana contains high chemical makeup of cannabinoid tetrahydrocannabinol (THC).On the other hand, Hemp contains 0.3% of THC.
The 2018 farm bill ordered the Food and Drugs Administration (FDA) to regulate Hemp under food, drugs, and cosmetic act. Under section 351 of public health service (PHS act), Products containing cannabis or cannabis-derived should be regulated by the same authorities of FDA.
The states where there is the production of Hemp are faced with the challenge of record-keeping and reporting. Besides, there is an increase in the burden by producers to supply the information to be reported by the states. Therefore the prices of the estimates are constant for both upper and lower limits. Also, the laboratory testing of THC content applies to all producers. Prices of testing stagnate for both upper and lower limits. In the sampling and testing act, it is assumed that existing producers are expected to dispose of non-compliant crops. The cost of disposal is estimated between $7.4 million in the upper limit to $960000 in the lower limit. Any change in the cost of disposal applies to all producers not only the new producers.
The increase in Hemp demand is directly proportional to the increase in licensed hemp producers. The records in 2018 show a gradual increase in licensed hemp producers. Gross revenue represents consumer willingness to pay for the products and other benefits. Hemp provisions in the 2018 farm bill have led to the maximization of sales revenue.
The legalization of Hemp in the United States has led to great economic advantage. The USDA has enacted regulations to be adhered to by producers. Therefore there is close monitoring of production. Therefore consumers are protected in the industry. There is massive production hence maximization of sales revenue.