Victory for Hemp

By Michael Taillard
Source: sfgate.com

As patients and patriots throughout United States struggle to free themselves of the archaic relics of the prohibition era, the dual battlefronts over the recreational and medicinal use of marijuana rage on, attracting the public eye while the ban on another highly valuable market is left out of the fray.  At a glance, it seems that industrial hemp would be an easy victory for the legalization movement, who often include its legalization as a part of their cause and who could use such a win to provide inertia in addressing their more challenging goals.  After all, hemp cannot make you high, and it cannot be easily confused for its psychoactive sibling.

California has just legalized industrial hemp, with the signing of Senate Bill 566 last month, and awaits word from the federal government, yet as recently as 2012, a congressman and Presidential candidate acknowledged to not even knowing what industrial hemp is (Source: SSDP http://www.youtube.com/watch?v=xQB61AUdmJw).  This underlines the lack of exposure we have, as a nation, to this topic.  Over the years, 18 states in total have passed laws allowing the legalization of hemp production, with support from those on the left (e.g.: Democrat Debbie Stabenow, who introduced Senate Bill 954 to respect state laws on hemp) and on the far right (e.g.: Republicans Rand Paul an Mitch McConnell, who pushed for a legalization provision in the farm bill this year).  This appears to have completely snuck under the radars of both the media and the federal government, both of which have given the issue little attention.

Proponents of industrial hemp like to tout the versatility of the crop in producing a wide array of products ranging from plastics to concrete, but where does the real value in this industry currently exist?  Primarily in hemp fabric, food, and hygiene products, which have been driving the annual 15% growth rate in the consumption of industrial hemp within the US over the past 5 years.

Hemp Food and Hygiene Products Available in US Stores

While the US economy as a whole stagnates at a growth rate less than 3% annually since 2006 and is expected to maintain its slow recovery, the outlook for the industrial hemp market continues to indicate growth rates of around 15% into the next 3 years, outperforming most industries within the US.  The problem is that all this is based entirely on rates of increasing consumption, rather than production, because hemp is illegal to produce in the US.  Instead, we import all of it, primarily from China.  It’s important to note now that the US maintains a global comparative advantage in agricultural goods, which compose not only our largest export to China, but is a top export to many of our trade partners.  Having a comparative advantage means simply that we can produce agricultural goods more efficiently than most nations, which isn’t surprising given our massive amounts of arable land, industrial farming, and generous farm subsidies.  So while we many industries struggle to compete in a global economy, we take one in which we should be highly competitive, and freely give it away.

Although hemp is 10-20% more profitable than corn, making it very attractive for specialty farmers, the total size of the hemp market will likely never reach that of corn.  Current estimates by the Food and Agriculture Organizations place the global hemp market at about 200,000 acres, which is far short of the 84 million acres of corn in the US alone, but this largely due to global bans on its production for many decades.  This makes the market set to rebound as people rediscover a utility that once inspired George Washington to encourage us to “sow it everywhere”.  At an average yield of nearly 900lbs per acre according to the USDA, an ability to grown in a wide range of climates, and with every part of the plant usable for some purpose, it’s not hard to see why.

Despite this, searching the news yields little, and Congressional records, even less.  Industrial hemp was banned in the US with the passing of the Marihuana Tax Act of 1937, lumped with its more popular counterpart.  As we’ve seen with state laws on medical and recreational marijuana, it takes broad public visibility to get Capitol Hill to cede federal primacy and let the states decide, but the comparatively small market size and lack of controversy-stirring intoxicating effects have given the hemp industry a kind of invisibility.  With support across the entire political spectrum and no compelling arguments against legalizing hemp, this invisibility seems to be the only thing preventing American farmers from turning our amber waves into green ones.