For centuries, industrial hemp (plant species Cannabis Sativa) has been a source of fiber and
oilseed used worldwide to produce a variety of industrial and consumer products. Currently, more
than 30 nations grow industrial hemp as an agricultural commodity, which is sold on the world
market. In the United States, however, production is strictly controlled under existing drug
enforcement laws. There is no known commercial domestic production and the U.S. market
depends on imports.
Industrial hemp is a variety of Cannabis sativa and is of the same plant species as marijuana.
However, hemp is genetically different and distinguished by its use and chemical makeup. Hemp
has long been cultivated for non-drug use in the production of industrial and other goods. Some
estimate that the global market for hemp consists of more than 25,000 products. It can be grown
as a fiber, seed, or other dual-purpose crop. Hemp fibers are used in a wide range of products,
including fabrics and textiles, yarns and raw or processed spun fibers, paper, carpeting, home
furnishings, construction and insulation materials, auto parts, and composites. The interior stalk
(hurd) is used in various applications such as animal bedding, raw material inputs, low-quality
papers, and composites. Hemp seed and oilcake are used in a range of foods and beverages, and
can be an alternative food protein source. Oil from the crushed hemp seed is an ingredient in a
range of body-care products and also nutritional supplements. Hemp seed is also used for
industrial oils, cosmetics and personal care, and pharmaceuticals, among other composites.
Precise data are not available on the size of the U.S. market for hemp-based products. Current
industry estimates report that U.S. retail sales of all hemp-based products may be nearly $500
million per year. Because there is no commercial industrial hemp production in the United States,
the U.S. market is largely dependent on imports, both as finished hemp-containing products and
as ingredients for use in further processing. Under the current U.S. drug policy, all cannabis
varieties, including hemp, are considered Schedule I controlled substances under the Controlled
Substances Act (CSA, 21 U.S.C. §§801 et seq.; Title 21 CFR Part 1308.11). As such, while there
are legitimate industrial uses, these are controlled and regulated by the U.S. Drug Enforcement
Administration (DEA). Strictly speaking, the CSA does not make growing hemp illegal; rather, it
places strict controls on its production and enforces standards governing the security conditions
under which the crop must be grown, making it illegal to grow without a DEA permit. Currently,
cannabis varieties may be legitimately grown for research purposes only. Among the concerns
over changing current policies is how to allow for hemp production without undermining the
agency’s drug enforcement efforts and regulation of the production and distribution of marijuana.
In the early 1990s a sustained resurgence of interest in allowing commercial cultivation of
industrial hemp began in the United States. Several states have conducted economic or market
studies, and have initiated or passed legislation to expand state-level resources and production.
Several states have legalized the cultivation and research of industrial hemp, including Colorado,
Hawaii, Kentucky, Maine, Maryland, Montana, North Dakota, Oregon, Vermont, Washington,
and West Virginia. However, because federal law still prohibits cultivation, a grower still must get
permission from the DEA in order to grow hemp, or face the possibility of federal charges or
property confiscation, despite having a state-issued permit.
The 113thCongress considered certain changes to U.S. policies regarding industrial hemp during
the 2013 farm bill debate. The House-passed version of the farm bill (H.R. 2642, Section 6605)
would allow certain research institutions to grow industrial hemp, if allowed under state laws
where the institution is located. Similar provisions were not included in the Senate-passed farm
bill (S. 947). Other introduced legislation, such as the Industrial Hemp Farming Act of 2013 (H.R.
525; S. 359), could allow for possible commercial cultivation of industrial hemp in the United
States. Those bills would amend the CSA to specify that the term “marijuana” does not include
industrial hemp, which the bill would define based on its content of delta-9 tetrahydrocannabinol
(THC), marijuana’s primary psychoactive chemical. Such a change could remove low-THC hemp
from being covered by the CSA as a controlled substance and subject to DEA regulation.
Source and further reading: http://www.fas.org/sgp/crs/misc/RL32725.pdf
“The Hemp Plant, Humankind’s Savior –
50,000 Uses and Counting”
Written By: Jeff Meints
The hemp plant was one of humankind’s first cultivated plants and there is quite a lot to educate oneself about this greatly historical plant. With the help of the hemp plant we, as a society could eliminate smog from current fuels, create a cleaner energy source that can replace nuclear power, remove radioactive waste from the soil, and eliminate smog from our skies in more industrialized areas. The hemp plant could assist in eliminating non-biodegradable plastics and cars by reintroducing Henry Ford’s 100 year old dream of building cars made from hemp with a plastic hemp car body that can withstand a blow 10 times as great as steel without denting, weighs 1 thousand pounds less than steel, hence improving gas mileage, can run on a vegetable oil based all natural hemp fuel, and has a completely biodegradable body. Nationwide hemp production could eliminate deforestation by converting current paper to hemp paper which can be recycled up to 8 times where as our current wood pulp is only recyclable up to 3 times, and we could thrive from eating hemp seeds and feeding it to our animals and livestock.
Industrial hemp can make our future roads, highways and freeways from hemp based concrete, which lasts for centuries. Society can benefit from the hemp plant’s attributes such as oxygen production, hemp’s dense root structure, and hemp’s nutrient and nitrogen production back into the soil. Chemicals in cannabis can be used in medicines and are estimated to treat around 250 diseases and illnesses, from which studies have shown inhibits the growth of cancer cells in rats, as well as a long list of other ailments. Finally, we could make an estimated 50,000 products ranging from building composites, cellophane, dynamite to shampoo, textiles, twine and yarn. If the US grew industrial hemp it could stop wars, save the environment, boost our economy, improve general health and well being, virtually end our reliance on any foreign entity, and save humankind from itself. But wait, wait, wait. I’m getting ahead of myself. Let me start from the beginning.
Studies have shown that hemp’s biomass can be converted into energy and could replace nuclear power and our current fossil fuels.[Belle, Mika] Just by farming 6 percent of the US’s acreage this could be achieved. “Hemp grown in biomass could fuel a trillion-dollar-per-year industry, while at the same time create more jobs, clean our air, and distribute wealth to our communities and away from centralized power monopolies.” Hemp’s biomass can be converted into gasoline, methanol, and methane at a fraction of the current cost of oil, coal, or nuclear energy.
An article from Montana State University states, “When burned in a diesel engine, bio-diesel replaces the exhaust odor of petroleum diesel with a smell something akin to french-fries. Bio-diesel is 11 percent oxygen by weight and contains no sulfur, so instead of creating sulfur-based smog and acid rain as by-products, it produces 11 percent oxygen instead. Bio-diesel can be made from domestically produced, renewable oilseed crops such as hemp.” The hemp grown through government farming and regulation is called “industrialized hemp” and contains no more than 0.03 percent THC content, which is not a high enough percentage for drug use. Canada, China, and England are examples of countries who have never prohibited, but instead have responsibly grown, produced, and thrived off of industrialized hemp [Hemp].
Imagine being able to dump our nuclear waste somewhere that wouldn’t have any adverse effects on the surrounding environment. The hemp plant can help with that as well. A nuclear power plant in Chernobyl, Russia had a meltdown April 1986 and experiments have shown that the hemp plant can help remove the toxicity in the soil. “There is an estimated 30,000 sites in the United States are estimated to be needing hazardous waste treatment” and the hemp plant is the answer to this terrible environmental issue.[The McGraw Hill Companies].
Henry Ford had a dream of “cars made from the soil” and created the first bio-fueled car and also, a car made from hemp. The body of the car was made out of veggie-plastics made from flax, wheat, hemp, and spruce pulp.[Davis, Richard M] As an experiment, Ford struck the door with an ax in the dead of winter and it didn’t leave a dent. The material was “ten times” stronger than steel and yet one-third the weight, hence saving on gas mileage. “Popular Mechanics Magazine, Vol. 76, No. 6, December,1941. Title: Auto Body Made of Plastics Resists Denting Under Hard Blows.“[Carver, George Washington] Henry Ford’s dream was saving American lives, human lives. The car was completely bio-degradable and so with that Henry Ford achieved his dream of “a car made from the soil.”[Malmo-Levine, David] Fords cars were in my definition: the poor person’s car. A car you could sustain on your own, distilling your own alcohol, or hemp and creating your own fuel in your own backyard while saving your family thousands of dollars per year. Hemp oil was even used, as grease to lubricate parts within the car’s engine. [Malmo-Levine, David]
Ford’s dream materialized before me, as I learned how he made a car grown from the soil, a car made out of and run off of hemp, and a plastic that is scientifically documented to be ten times stronger than steel and one thousand pounds less in weight. If this were our implemented into current day driving would be like bumper cars and getting into a crash might no longer be such an intensive insurance matter. If all the cars on the road were made with hemp the injuries and deaths would become considerably less. Industrial Hemp must again become our main crop producer and be used in the making of every single car produced in America. The hemp plant could saves millions of American lives. “Car accidents involving other moving vehicles accounted for the large majority of accident deaths in California in 2004 with 1,336 deaths due to collisions with other vehicles. This accounts for about 35% of all fatal car wrecks throughout the state. Telephone poles, palm trees, street signs and other stationary objects accounted for another 1,072 auto accident deaths in 2004.” [Resource 4 Accidents]
Despite Industrial Hemp having 50,000 uses, Dupont, Rockefeller, Hearst, Mellon and their constituents cornered the industrial and medicinal market with political propaganda. Dupont created Nylon, owned General Motors and was “one of the top ten U.S. based petroleum and natural gas producers and refiners.”[DuPont] Rockefeller owned Standard Oil and was soon known as the “richest man in modern history.”[Rockefeller] This is a political science paper and can be viewed at one of my Blogs here at http://marijuana-tax-act-1937.blogspot.com/. But lets not get off topic, so big business and capitalistic politics thrived and outlawed the hemp plant that had sustained the United States of America, since the days of our founding fathers and all for someone else’s selfish monopolistic goals.[Malmo-Levine, David] Henry Ford achieved his dream, but he was denied any true public recognition and any further industrial hemp progression. Every citizen of America was denied Henry Ford’s hemp dream of a car made from the soil.
In 100 BC, hemp paper was invented in China using hemp and mulberry. Since 100 AD, when the Romans wrote a guide to farming hemp it has since been farmed all over the known world. From the Germans, Franks, Vikings, Chinese (who have never prohibited the use of hemp all-throughout history), English, Canadians, Egyptians, and even Americans all grew, produced, and thrived off of hemp. In 1150 AD, Muslims created the first paper mill and for the next 700 years hemp paper was what most civilizations wrote upon.[Schaffer, C.] Civilizations around the world and for example; during the Napaleonic Era, ship’s sails, ropes, and sailor’s clothing were made from hemp.
Hemp paper can be recycled up to eight times while the current pulp wood fiber can only be recycled three times. By farming hemp throughout the United States and even the world it could assist in reducing deforestation by 50 percent, or more.[Hemphasis] George Washington and Thomas Jefferson were two examples of historical spokespersons for growing hemp and in 1619 the Virginia Company made hemp cultivation mandatory, which increased commerce with England and helped the American economy thrive. Our Declaration of Independence was drafted on hemp paper and our first American Flag was made out of hemp. [Schaffer, C.] These historical economical and industrial concepts and examples can easily be applied to present day.
“Hemp seeds contain beneficial omega fatty acids and amino acids, more than any other source.” The seeds can be used in a number of food dishes in baking, prepared as tea, any type of food like ice cream, and milk. Cultures all over the world have consumed hemp seeds in times of famine to prevent starvation which has saved millions of lives.[Saunders, Clare] The nutritional facts astounding, for example; hemp seeds contains 20 percent complete and highly digest-able protein.[Earth Friendly Network] Canadian Hemp seed exports surged 300 percent a few years back and China, and other eastern countries have to this day never prohibited hemps cultivation and use it extensively. [Hemp]
“Only 1 acre of hemp is said to produce more oxygen than 25 acres of current forest.” [Bryon, Alan D.] Theoretically, if our cities had greenhouses on top of all the office buildings, like in Los Angeles, filled with hemp then the massive output of oxygen would be a massive intake of carbon dioxide. This in turn should make our cities skies once again blue, healthy and smog free. Methane is one of the main producers of green house gases and one of the many major causes for dramatic global climate change. [Hopwood, Nick, and Jordan Cohen] Therefore, our farmers can grow hemp in our cow pastures, so the hemp plants can have first hand absorption of methane gases via cow farts, and burps. The cows can also eat directly from the hemp plants around them, which would eliminate the need to use hormones and steroids, due to hemp’s nutritional facts.[Earth Friendly Network]
Hemp has a superior connection with the earth compared to other plants. When you plant hemp in an area that is infested with Canadian Thwack Grass, or Canadian Thistle Grass, the hemp plant’s dense root structure will smother out these invasive weeds and make that land again arable.[West, D.P.] Thomas Jefferson wrote a letter to Congress back when the colonies were first founded that requested that the government grow hemp instead of tobacco.[Hemp] Tobacco drains all nitrogen and nutrients from the soil, which leaves the land less arable, or harder to farm upon. Hemp restores nutrients and nitrogen back into the soil. [Davis, Richard M.] Another attribute is that hemp is drought and disease resistance, which gives hemp the added advantage of being able to be grown in even the most dry to wet climates and has little-to-no need for pesticides, because the hemp plant is highly resistant to plant diseases, illnesses, and pests. Hemp’s dense root structure helps prevent mudslides, erosion, and natural catastrophes. The hemp plant is one of the only plants that can be harvested year-around in states like California, or Florida for example, due to the harsh climates in those regions.[Davis, Richard M.]
In France there are bridges centuries old made out of a mixture of hemp and lime. This process is called Iso’Chanvre and is another great example of possible industrial innovations regarding the hemp plant.[Rawganique] Society could build roads and bridges that wouldn’t require continuous repairs and wouldn’t require endless tax payer dollars each year. Clothes, pottery, shoes, jewelry, shampoos, pies and so much more can be made from hemp and no part of the plant would go unused. From hemp’s roots, stems, leaves, and even what might be considered waste from the hemp plant can be produced into any of the estimated 50,000 products.
Our current education doesn’t teach us that Columbus sailed across the Atlantic with the rope on his ships, the caulking and rigging, and yes the sails, all were made from hemp.[Schaffer, C.] There was also no mention in our history books of the endless crates of hemp seeds Columbus and the other ships brought with them. Not only did they survive by eating the hemp seeds, but they planted the seeds in America and overtime, hemp now creates an estimated 50,000 products.[Carver, George Washington] The hemp plant’s most common product is it’s fiber, especially the bast fibers which are extremely strong and durable.
Hemp can also be used in building composite material such as beams, studs, fire resistant building materials, fiberboard and even such things as paint, varnish, ink and carpet. There seems to be a consensus that hemp building composite materials are stronger, more durable and flexible than our currently used wood pulp composite building material. “In 1935, two years before being outlawed, 116 million pounds of hemp seed were used in the United States to produce paint and varnish.”[Robbins Pet Care] Is there anything hemp can’t be made out of? Hemp wood composite is fire durable, which would benefit those who lived in fire sensitive areas.
Regarding marijuana: You can avoid the whole problem of growing hemps psychoactive counterpart cannabis aka marijuana by growing the plants in a controlled environment and exposing the female plants to male plants. When the female plants are pollinated by the male plants their (THC) or Tetra-hydra-cannibanol level begins to drop. The longer the plants are held in these pollinating and harsh conditions, the THC level will continue to drop and you can maintain the THC percentage to stay below 0.03 percent making it impossible to use the plant as a drug.[Innvista] If other countries can responsibly produce and cultivate hemp for industrial uses then there is no reason why America cannot responsibly produce and cultivate the hemp plant too. Unless we aren’t a responsible nation?
Archaeologists have found evidence linking hemp and its psychoactive counterpart marijuana back to 8,000 BC when agriculture and hemp textile industries began in Europe and Asia [Medical Cannabis]. By 3725 BC, Shen Nung Pen Ts’ao of China wrote of cannabis in the world’s first medical text and Ts’ao declared cannabis as “a superior herb.”[Schaffer, C.] Cannabis sativa have been used for medicinal purposes for 4,800 years and has been prescribed for over 250 illnesses and diseases, for example: Asthma, insomnia, often used to treat pain in childbirth, migraines, used for AIDS and Cancer patients allowing them to have an appetite, glaucoma, relieves anorexia in Alzheimer’s patients, mental health, it can be used as suppositories for relieving the pain of hemorrhoids, and depression are just a few examples of the many conditions that cannabis alleviates.[Medical Cannabis] Recent studies in Italy have shown that a chemical found in marijuana, inhibits the growth of cancer cells in rats. THC pills, or Marinol, synthetic THC, are made with the ingredients necessary for the specific treatment of those disease, or illness, but some patients cannot swallow these pills, due to their condition and that is when smoking the plant is applied. There are countless other examples of marijuana’s beneficial medicinal properties, but here are two final and thought provoking examples to contemplate over: Medicinal marijuana is used to treat alcohol addiction and other drugs such as heroin and is used to treat post traumatic stress disorder (PTSD) in war veterans.
With the facts and knowledge acquired, it is apparent that hemp is humankind’s savior and that hemp must be re-implemented into our countries way of life. General George Washington stated, “Grow it everywhere, hemp is greatly viable for winning the war and sustaining a future fantastic for America.”
Are we at war with nature, or perhaps is nature at war with us? Hemp is grown by almost every civilized country and hemp benefits those countries economies and their countries citizen’s health. To not take the scientific approach in making the decision to legalize and produce industrial hemp is dooming humankind to more needless sufferings and perhaps even another Ice Age. Our current dramatic, devastatingly, unpredictable weather breaks records each year and these violent weather patterns are the first signs of nature’s end means. If the icebergs of the world melt, the sea level will raise by 20 feet, or more and force extinction upon millions of animal and plant species, and kill and displace millions of human beings worldwide. The Philippines, Hawaii, Florida and countless other countries, cities and homes will all be underwater if this were to occur.[Climatecrisis.net] Can you imagine watching the sunset with your child and as the low tide rolls out it reveals the rooftops of houses now underwater.
Only by the legalization of Industrial Hemp and its removal from Schedule 1 of The Controlled Substance Act, can we start working immediately towards the one thing that can save humankind from itself.[110th Congress] America would have a cleaner fuel and energy source, we would dispose of nuclear waste more efficiently, we’d create cars that could reduce traffic fatalities and are completely biodegradable, we’d have a paper product that can be recycled up to 8 times, instead of just 3 times, we’d reduce deforestation by 50 percent nationwide and eventually, worldwide, we’d have an endless supply of food products, livestock bedding, livestock feed and the benefits of the endless nutritional facts backing hemp. imagine roads, freeways and highways that wouldn’t require monthly repairs and endless taxpayer dollars, preventing landslides and improving our farming industry by using hem, as a crop rotator, having an estimated 50,000 industrial bio-degradable products, and regarding medicinal marijuana, having over 250 medicinal uses that could ease the suffering of so many people who simply can’t afford the proper care, or treatment.
The facts and history of hemp show boldly how important it is to humankind that we should all support hemps production and usage for our countries economical and health related benefits. With the debate of global warming over and as I like to call it, “dramatic global climate change” fast approaching we need someone, or something to save us from humankind’s destination. There are many facts and products that haven’t been discussed here and there is so much more relating to the history and benefits of the hemp plant for humankind. Only with relentless and patient education and constant communication can society overcome the propaganda and misperception surrounding the hemp plant. These fallacies have masked the history and extraordinary uses and benefits of the hemp plant. We, as a society, must continue learning and teaching others about the hemp plant and we must always network what we learn to others. If you’ve learned something from reading this article that you hadn’t known before you can help by spreading this knowledge of hemp to anyone and everyone. Can you imagine the gold mine waiting in everyone’s backyards, or empty fields, or, those thousands of acres of unused land nationwide, or along the sides of our freeways and highways?
The hemp plant is humankind’s savior and the more society knows, the sooner we can put into action what we have learned and the better off our future generations will be. There are an estimated 50,000 industrial uses that can benefit every aspect of our daily lives from this one humble and misunderstood plant, and the facts can’t be denied any longer. I think I see a light at the end of this long, dark tunnel.
So remember to Seek the facts, Confront the truth, and Pass it on.
The US Hemp Market:
An economic examination of the hemp industry.
By Richard A. Adams
An examination and evaluation of the hemp industry in the United States of America with particular emphasis on current issues involved in the agricultural production of hemp both domestically and internationally. Discussion of the economic benefits of a re-evaluation of the legal issues, in particular those laws which necessitate importation versus domestic production of raw hemp for production purposes. A brief examination of the history of the hemp industry and hemp agriculture in the United States of America provides a background against which the current legal and economic status of hemp may be viewed. Discussion of various hemp products, the suitability of the product to American agricultural and production capabilities, and the potential of the market provide an economic understanding of the question.
Statement of Purpose
The purpose of this study is to examine the economic benefits/drawbacks which would result from changes in the current legal status of hemp production in the United States of America. Through an examination of current status of hemp production and marketing structures in the United States and a comparison of those structures in other nations, an economic understanding of the issue will be more easily achieved. Because of the very substantial profit potential involved in this industry a study of the subject was deemed beneficial to pursue.
Methods used in obtaining information relevant to the study.
Information was obtained primarily from three sources:
- Published books and articles.
- Online resources, particularly hemp related and politically related sites on the World Wide Web.
- Personal interviews with individuals directly involved in the hemp industry, both domestically and internationally, conducted via Internet email.
The situation was addressed from an analytical, versus participatory, perspective.
Benefits accruing from the solutions presented.
Benefits to the hemp industry would include increased market shares on an international basis, substantially higher profit margins, reduced production costs, the potential to benefit from increased economies of scale, increased product development potential, andthe opening of new markets for current and newly developed products.
Benefits to the National economy would include the creation of a new and highlyprofitable agricultural industry, increased trade opportunities, an increase in the GNP, improved environmental conditions, new tax resources, and reduced costs with respect enforcement of current laws.
Personal benefits would include the ability to add additional, profitable, product lines to those currently carried by my firm, personal economic savings resulting from reduced costs of goods resulting from such changes, and the social benefits inherent in use of more environmentally beneficial products.
A brief history of legal hemp in America
In contrast to modern laws which prohibit the agricultural production of hemp and severely regulate the importation and production of raw hemp and hemp products, early colonists not only were free to cultivate the plant, they were required by law to do so. Puritans, for example, grew hemp to meet the conditions of their 1607 contract with the Virginia Company.(Robinson, 1996)
Throughout the colonization and political unification of what is now the United States of America, hemp production played a key role in international trade and in the development of a significant agricultural industry within the emerging nation. So important was the product, in fact, that any list of prominent Americans of the era who were involved in the hemp industry tends to resemble a list of American political figures. Among the many well known individuals whose writings clearly demonstrate their personal involvement with this industry are George Washington, Thomas Jefferson, and John Quincy Adams. Economically, the industry was so vital to the prosperity of the colonies that the Massachusetts House of Representatives commissioned a study of the subject in 1765, in which the author, Edmund Quincy, clearly stated:
It is presumed none will be at a loss to determine, that the two most important materials which the inhabitants of these colonies should be principally encouraged in the growth of, are Flax and Hemp of any which can be so easily and generally produced in North America. (Quincy, 1765)
Indeed, so common was the use of Hemp during the era that the first two drafts of the Declaration of Independence and the final version of the Constitution of the United States of America were, in fact, printed on paper made from hemp.
Throughout the nineteenth century, hemp continued to excel as a domestic agricultural crop and the uses for the product, ranging from paper making to the production of sails, rope, medicines and clothing continued to be expanded by visionary entrepreneurs who were able to recognize new potential markets and capitalize on their development. In times of war, particularly, hemp was of critical importance to the nation, a trend that held true well into the twentieth century. During the Second World War, in order to promote production of this vital material, the government inaugurated programs which exempted American farmers from military duty if they agreed to produce hemp products in support of the war effort. (Frazier, 1991) As the industrial revolution took hold in the nation, new means of production which incorporated hemp products as integral parts of the processes were introduced. Even Henry Ford, one of automations greatest innovators, Aenvisioned a future where plastics from hemp polymers were the building blocks of almost all products and where fuel was provided by hemp biomass. (Robinson, 1996, p. 139) Ford even went so far as to develop an all organic car which was constructed from a combination of hemp and other products and which ran on hemp fuel. (Henry Ford Museum Information Center, Greenfield Village) In 1938, Mechanical Engineering magazine called hemp Athe most profitable and desirable crop that can be grownin an article that, due to production delays, was published shortly after the passage of the Marihuana Tax Act of 1937 which rendered the production of hemp illegal.
Under current U.S. law, the agricultural production of hemp is forbidden, except under special permit, by Federal statute. Internationally, hemp is grown commercially in most European and Asian countries. Australia, Canada, and Germany have granted limited research plots. The U.S. has not granted any large-scale licenses since the 1950’s. (Industrial Hemp Information Network, 1996) As a result of these restrictions, all industrial production of hemp products in the United States of America requires the importation of raw materials, resulting in higher production costs and decreased competitiveness in both domestic and international markets.
Economic implications of agricultural hemp production in the United States of America
To understand the economic implications of hemp production we must examine both the basic principles of agricultural economics and the nature of hemp agriculture itself.
While agriculture, in general, adheres to the basic economic principles applicable to any industry, there are several unique and very relevant characteristics which must be considered in any examination of agricultural production. These may be divided into discrete areas, which include:
- Regional Specialization.
- Enterprise Combination.
- The Farm Market System.
- Environmental Concerns.
- Social Control of Land Use.
- Governmental Policies and Agricultural Supports.
- Seasonality and Natural Hazards in Agricultural Production.
1. Regional Specialization.
Due to climatic and geographical concerns, agricultural production is commonly divided into distinct areas of specialization, within each of which unique mixes of products are produced. Unlike many forms of production, in which such concerns as labor availability or materials costs are the primary factors upon which location is based, in the agricultural market weather and soil conditions provide the primary determinants. By necessity, therefore, all things being equal, those products which are adaptable to the widest range of climatic and geographical conditions provide the greatest potential for agricultural production.
Within the continental United States ten distinct farm production regions have been defined for statistical purposes. They are, respectively, the Pacific region, the Mountain region, the Northern Plains, the Southern Plains, the Lake States, the Corn Belt, The Delta States, the Northeast, the Appalachian region, and the Southeast. While considerable overlap exists, the differences between these regions are significant enough to define the product mixes which may be produced efficiently within each as being distinctly different from the product mixes appropriate to any other region. Cotton, a major competitor of hemp products, is, for example, produced primarily in the three southern farm regions while, due to poor climatic conditions range livestock production, among the least efficient of all forms of agricultural production due to excessive requirements for land and feed, is the primary agricultural product of the Mountain region. (Wilcox, Cochrane, & Herdt, 1974)
Hemp, unlike nearly all other common agriculturally valuable products, is unique in its ability to thrive in an extremely wide range of climates and geographical conditions. As a result of this property, it can profitably be grown in all ten regions. In addition to its heartiness with respect to climate, it is a particularly efficient plant with respect to nutrient requirements, and therefore, is as effectively grown in relatively poor soil conditions as it is in the nutrient rich soils of the farm belt. This characteristic makes the plant ideally suited to agricultural production in regions where most cash crops either require extensive (and expensive) fertilization and irrigation, or cannot be grown efficiently at all. Combined with the particularly low labor costs inherent in the agricultural production of hemp, a very high yield per acre planted, and the lack of any significant requirement for costly (and environmentally damaging) insect or weed eradication measures, this results in extremely low production costs and, therefore, an average cost curve significantly lower than that for comparable products. Thus, hemp production may, given a ready market for its output and a sufficiently high demand (both of which already exist or may easily be developed as will be demonstrated later in this paper), be considered to have a remarkably attractive profit potential for investors. Indeed, even the most cursory examination of the relatively high profits currently enjoyed by such agriculturalists in nations which permit the commercial production of hemp clearly demonstrates the potential income available to the American farm industry, one reason the American Farm Bureau Federation, the largest farming organization in the United States (4.6 Million members) passed a unanimous resolution at its 77th annual convention in 1996 stating:
- We recommend that the American Farm Bureau Federation encourage research into the viability and economic potential of industrial hemp production in the United States. We further recommend that such research includes planting test plots in the United States using modern agricultural techniques (Kriho, 1996)
2. Enterprise Combination.
Modern farmers plan their production to include the most profitable mix of products in a Acropping sequence@ or crop rotation. (Wilcox et al, 1974) The result is a mix of crop and livestock enterprises which is determined by the principle of equal marginal returns. Hemp, due to its exceptionally low fertilizer and irrigation needs, high nutrient return (with up to 70% of all nutrients absorbed by the plant returned to the soil), and its short-day growing cycle, is an ideal rotational alternative for use with short season high-demand crops. (Hemp, 1994) Thus, it offers modern farmers the opportunity to make optimum use of available resources with the lowest possible average cost figures, given the nature of the secondary crop (which often can utilize, at least in part, the nutrient and soil enrichment properties of the hemp crop in lieu of expensive and ecologically damaging fertilizers) and, therefore, provides a far more attractive cost curve than is the case for other agricultural products. In addition, because many of the byproducts of hemp production are appropriate for use as livestock feed, the range of efficient product mixes is even greater than is the case with many other product choices.
3. The Farm Market System.
As a close approximation of a perfectly competitive market organization, agricultural firms have above average needs for efficient and cost effective means of production. In addition, due to the nature of a competitive market, the opportunity to compete on the basis of product differentiation is essentially non-existent, and the sole criteria for successful production becomes the ability to produce goods profitably given the fact that the product demand curve for agricultural products is perfectly price elastic (from the standpoint of the individual firm, of course, from the industry perspective, the curve is highly inelastic). Thus the selection of a product mix which maximizes the potential for profit under as wide a range of conditions as possible is a necessity for any firm which wishes to remain competitive. Moreover, due to the nature of the farm market itself, which is based in large part on speculative investment in future production (the commodities market) as well as the wide range of uses for its outputs, which in the case of hemp include such diverse applications as the production of paper, use as a fuel, food production, clothing production, and industrial applications, crop selections which maximize not only production possibilities but market possibilities as well increase the likelihood of profit while minimizing the impact of any potential substitution effect as a result of the lowering of the price of other agricultural products. Indeed, given the exceptionally wide range of products which incorporate hemp into their production, the likelihood that a substitute product will adversely affect product pricing is exceptionally low, a positive inducement to farmers to produce the crop.
4. Environmental Concerns.
Due to the very low requirements for artificial fertilizers, insecticides, and herbicides in the production of hemp, the crop produces substantially fewer external diseconomies than is the case for nearly any other domestic agricultural product. Not only does this provide a direct benefit in terms of reducing the environmental impact of crop production, a significant problem, given modern agricultural methods, but the nature of the products produced from the raw hemp themselves offer similar benefits, with the concurrent reduction in environmental costs inevitable in such a transition. Paper produced from hemp fiber, for example, requires far less chemical processing than is the case for the wood pulp based form, despite its comparable cost of production. Studies done at the Wageningen Agricultural University, in fact, demonstrate that waste from the hemp pulping process does not contain toxic elements (as are common to wood pulping processes), and that all components are biodegradable with the exception of a very small percentage of the lignin, which is expected to be resolved by further research as well. (Van Roekel, 1995) In addition, because hemp produces substantially greater biomass per acre of cultivation than is true of trees, and requires a far shorter growth cycle to produce yield, the impact of a conversion to hemp production for such products as paper, building materials, and other products commonly associated with the lumber industry would result in the reduction of many of the negative effects of the timber industry on the environment, including preservation of forests and wildlife habitats, erosion of topsoil due to logging, and pollution of lakes, rivers, and streams, all of which costs represent diseconomies with respect to the wood industry. (Environmental and economic benefits, 1996)
5. Social Control of Land Use.
As a remarkably high yield crop, hemp produces significantly more usable product per acre than is the case for any other modern agricultural product. The result of this high yield is to maximize the use of land resources while minimizing the impact on society resulting from the dedication of such land to agricultural uses. Indeed, an area of land only 25 miles square (the size of a typical U.S. County) is sufficient to produce enough hemp fiber in one year to manufacturer 100 million pair of denim jeans, thus providing an equivalent yield to an area ten times the size planted in cotton, and offering the additional benefit of producing clothing which is 10 times stronger than cotton and that, in contrast to cotton which requires exceptionally high applications of pesticides and enormous quantities of water, requires no pesticides and only minimal quantities of water as well. Moreover, by being amenable to production in all 50 states, versus the 10 states in which cotton can be reliably produced, hemp offers the additional advantage to clothing manufacturers of being relatively immune to price variations due to climatic variations or natural disasters, thus permitting more accurate long run cost stability for such producers.
In addition to these social benefits, because hemp products include such socially valuable items as non-fossil (and non-polluting) fuels, highly nutritious high-protein oils which exceed the nutritional and industrial values of soybean oils with a lower cost associated with their extraction, and because hemp production in the United States of America could significantly influence the balance of trade in a positive direction, as well as providing a source of additional export revenues (rather than an additional cost of production associated with import costs, as is currently the case in the United States of America), the social costs of hemp production are exceptionally favorable, and thus social control of land resources clearly favors the production of hemp as a viable alternative to less efficient uses.
6. Governmental Policies and Agricultural Supports.
Current government policies prohibit the production of industrial hemp (defined as hemp plants containing less than 0.03% THC and thus non-intoxicating substances) and no current policy exists with respect to the production and marketing of such products. Based on European models, however, it can be successfully argued that hemp production would, due to the nature of the market, be highly unlikely to require any form of government subsidies in order to be profitable or competitive in the farm market. Indeed, it is very possible that the legalization of hemp production in the United States of America would actually reduce the cost of agricultural supports by the government in that it would offer a highly attractive alternative crop to agricultural interests which currently rely on subsidized or price supported products as their primary crops.
7. Seasonality and Natural Hazards in Agricultural Production.
All forms of agricultural production are subject to seasonality and natural hazards. Seasonality, or the tendency of agricultural prices to follow a seasonal pattern (normally at a low point at or soon after harvest and a high point just prior to harvest), results in a cyclic variation which, by necessity, influences both marginal revenues and, as a result, profits. While such a pattern is integral to the production of any crop, in the case of single-season, limited region products (such as avocados or oranges) it is far more influential than in the case of crops which grow well in a wider range of climates, or which are adaptable to multi-season, multi-harvest production. Hemp, because it meets both these criteria, and because its crop yield is not as time immediate (i.e., it is less perishable than is the case of many other agricultural products) tends to be far less influenced by such variations and, therefore, offers the potential for more stable and accurate revenue forecasting, with the resultant increases in benefits to the producer.
In a similar manner, all crops are subject to natural hazards such as droughts, floods, late (or early) frosts, or similar disadvantageous conditions. Hemp, however, by nature of its botanical characteristics, is far more immune to such influences than is true of most other agricultural crops grown in the United States of America. Two of the most notable characteristics of hemp, from a production standpoint, are its relative immunity to frost damage and its inherent ability to thrive in widely varying conditions with respect to water. Coupled with the ability to grow hemp in essentially all parts of the United States, thus avoiding dangers of localization with respect to natural disasters, hemp may be considered an ideal crop from this aspect as well. From an agricultural perspective, few, if any, products combine the economic benefits of hemp with the ease of production inherent in the crop.
Industrial and Commercial uses for hemp and hemp products.
The hemp plant lends itself to a very wide range of production possibilities, and thus is particularly appealing to the agricultural firm seeking new markets. Some of the products which may be, and are being, profitably produced from hemp include: Animal bedding, auto/boat covers, backpacks, bags (both paper and canvas), balms, bandages, baseball caps, baskets, bed linens, belts, bioplastics, birdseed, books, boots, bread, butter, candlewick, candy, canvas, cardboard, carpeting, caulking, cellophane, cement, chairs, cheese, cloth and paper napkins, cloth and paper towels, coffee filters, compost, cosmetics, curtains, cushions, denim, desks, detergents, diapers, dolls, draperies, duffel bags, dynamite, erosion control, fabrics, fire hoses, fiberboard, fishnets, flags, floor mats, flooring, flour, fuels, furniture, futons, gloves, glues, hammocks, harnesses, hats, ice cream, inks, industrial coatings, industrial oils, insulation, jackets, jeans, linen, livestock feed, lubricants, luggage, magazines, medicines, moisturizers, mulches, natural pesticides, nets, newsprint, note pads, oil-spill absorbents, packaging, paints, paneling, pants, parachutes, particle board, pasta, pet foods, pharmaceuticals, pillows, plaster, plywood, polymers, protein, purses, quilts, roofing materials, rope, sails, salad oils, salves, sandals, scarves, shampoos, shirts, shoes, skirts, slippers, soaps, socks, sofas, stationary, tablecloths, tables, tea, tents, thread, tissue paper, toilet paper, twine, varnishes, wallets, and wallpaper. (Environmental and economic benefits, 1996, Frazier, 1991, Industrial Hemp Informational Booklet, 1996)
With respect to production, one researcher summed up the position of industrial hemp in the agricultural marketplace quite definitively when it was stated that: ANo tree or plant species on earth has the commercial, economic, and environmental potential of hemp. Over 30,000 known products can be produced from hemp.@ (Environmental and economic benefits, 1996)
World wide production of hemp and hemp products.
Despite major legal obstacles to industrial hemp production in many nations, and complete prohibition in the United States of America, hemp still produces substantial sales internationally. According to Canadian Government figures, world production of hemp in 1992 equaled 124,000 tonnes, comparing favorably to other vegetable fiber crops (none of which suffer the legal limitations of industrial hemp) such as sisal (383,000 tonnes) and flax (610,000) tonnes. (Hemp, 1994) While it is obviously impossible to predict with any degree of accuracy the market share that would ultimately be occupied by industrial hemp were legal limitations on its production removed, some indication of the potential of this agricultural product may be discovered by a comparison to cotton production (a crop for which hemp serves as a direct substitute) which in 1992 was 18,064,000 tonnes. (Hemp, 1994) Given the far greater production potential of industrial hemp with respect to other fiber crops, and given the increased agricultural regions in which it can be profitably grown, there is no reason to doubt that once established as a viable world wide competitor for cotton and wood products (among other uses) it would equal or even exceed this volume. Indeed, in Canada where hemp production is still limited in scope, and thus the overall production possibilities are not, as yet, fully realized, the gross revenue generated by chopped hemp stalk is $750 per hectare, comparable to Ontario corn. (Hemp, 1994) Once hemp production has been expanded and thus made more amenable to modern technological methods (as has been projected by Canadian agricultural experts), it is reasonable to expect this figure to become even higher.
Clearly industrial hemp can be shown to be a viable product of enormous economic benefit to the United States agricultural market. Even the most cursory examination of its economic and social benefits easily demonstrates the necessity to follow the recommendations of the American Farm Bureau Federation with respect to researching the introduction of this crop into the American agricultural market. Not only would such an introduction benefit the agricultural industry itself, but due to its extensive economic, environmental, and social values as discussed earlier in this paper, it would provide substantial benefits to the nation itself. By reducing dependence on imported products, it would provide impetus to manufacturers to develop new product lines (or revise their production approaches to old product lines) incorporating the use of industrial hemp, thus simultaneously enhancing domestic production and improving the balance of trade as those products were produced for export, rather than being imported as is currently the case. In addition, by providing a more dependable, heartier, and less seasonally affected crop for agricultural interests it would reduce dependence on government farm subsidies and price supports, thus enhancing the economic structure of U.S. agriculture even further.
A number of steps must be taken if such a change is to occur, given the current status of industrial hemp in the United States of America. First, and most important, research needs to be conducted to demonstrate the applicability of hemp cultivation to modern American farming techniques. Next, legislators and other government officials need to be provided education concerning the nature of industrial hemp which demonstrates the non-drug nature of the plant, and thus provides justification for the elimination of overly broad legislation concerning its cultivation. Finally, an intensive effort aimed at developing a new market within the United States, as well as abroad, for the products resulting from agricultural production of industrial hemp would need to be undertaken in order to insure a solid, and profitable, market for the product once farms began to produce it in volume.
Clearly, such change is inevitable. Given that hemp production on a world wide basis has steadily increased over the past several years, and each year an increasing number of nations are experimenting with, or actually legalizing, the production of industrial hemp (one of which, Canada, is a major competitor to United States agricultural interests, particularly in border states where shipping costs are relatively similar to those borne by United States producers), by necessity the United States of America will ultimately have to give in to international pressure and legalize the production of this valuable product. Hopefully, such a change in policy will occur before other nations become so firmly entrenched in the market that they will present a significant barrier to international trade for American agricultural and manufacturing interests.
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