Hemp Seed Imports Weighed as Non-Lethal Aid to Ukraine

By Alan Bjerga 
Source: businessweek.com

The U.S. Department of Agriculture is seeking to help Ukraine’s battered economy by bolstering imports of its hemp seed.

Ukrainian hemp -- a cousin of marijuana -- lacks the active ingredient that gives pot smokers a high, and is prized for commercial and industrial applications. Hemp seed can be used in high-protein oils or for making paint and plastics.

“We are now involved in trying to figure out ways in which we might be able to use the industrial hemp seeds that are created in the Ukraine in the U.S.,” Agriculture Secretary Tom Vilsack said yesterday in an interview.

Ukraine, the world’s fourth-biggest producer of hemp seed, is seeking aid from the International Monetary Fund and other nations as it struggles with a four-month political crisis capped by Russia’s annexation of Crimea. The currency has plunged almost 25 percent against the dollar this year. Ukraine is seeking as much as $20 billion from the IMF, which may announce a decision as soon as today.

President Barack Obama has urged Russia to de-escalate the crisis over Ukraine or face more sanctions should it encroach further into the east of the country after its annexation.

The Obama administration is planning to provide aid, including $1 billion in loan guarantees, and is working with European allies on a broader package. Military assistance has been limited to about 25,000 rations for the Ukrainian armed forces, U.S. Rear Admiral John Kirby told reporters on March 24.

“Our focus from an interagency perspective here in the United States, is on the non-lethal side of those requests,” Kirby said of Ukrainian appeal for assistance.

Hemp Cultivation

Currently, 10 U.S. states allow cultivation of industrial hemp. The farm bill Congress passed last month will allow colleges, universities and state agriculture departments to grow hemp for research purposes if allowed by the state.

Legal restrictions on the agricultural product, once widely cultivated in the U.S., have eased as marijuana has gained greater acceptance.

France, China and Chile were the world’s top hemp-seed producers in 2012, according to the United Nations. Ukraine produced 900 metric tons on about 2,100 hectares (5,200 acres) of land.

Ukraine is the world’s third-biggest exporter of corn and sixth-biggest of wheat. Vilsack said he had seen no signs of disruptions to Ukraine’s grain markets as a result of the turmoil.

The country’s plunging currency is raising concern that farmers may buy less fuel and pesticides even as this year’s planting accelerates to the fastest pace in six years. Farmers may sit on supplies waiting for the currency to stabilize, Dmitry Rylko, general director of the Moscow-based Institute for Agriculture Market Studies, said in a speech in Geneva March 20.