MARION — One of the most notable elements in the farm bill signed by President Donald Trump last December was the legalization of industrial hemp.
At the time, the bill’s provision removing industrial hemp from the Controlled Substances Act was hailed by advocates and environmentalists as a measure that would allow farmers to diversify their crops and maintain profit margins in the face of droughts and market volatility.
But now that approximately 200 Indiana farmers who were granted special permits to grow it this season have largely finished harvesting the state’s first legal hemp crop since World War II, uncertainty remains over how lucrative it will be, even as new uses — and thus new markets — for hemp are uncovered.
Jay Berry, a farmer in Grant County who built one of the first ethanol plants in the Midwest, said he quickly saw potential in growing a fiber variety of hemp which can be used in oil, automotive interiors and in building reinforced door panels.
“I’m a risk taker,” said Berry, who planted and harvested about 50 acres of hemp this season. “There’s a lot of similarities between hemp and ethanol, and with my experience in the ethanol (industry), I thought, hey, these are two are very similar, I’d like to be in the forefront and one of the first ones involved on the hemp side of things.”
But the potential windfall for farmers — cultivating industrial hemp could generate as much as $300 more per acre compared to corn and soybeans, according to the Purdue Hemp Project — is balanced by several likely drawbacks. For example, caring for and harvesting hemp is considerably more labor intensive, Berry says. It is also sensitive to moisture and temperature and must be planted in precise conditions in order to produce the best growth and results. The anticipated end use of the hemp can also be a consideration in planting decisions.
Beth Vansickle of the Purdue Extension Madison County office said that, although no local farmers applied for hemp planting permits this season, there is interest in the product, and she expects more inquiries next year.
Agricultural experts say that, as with any new product, many farmers are taking a wait-and-see approach to see which markets develop — and how quickly — before investing in hemp.
“Hemp could be considered risky since we are still in the infancy stages of this industry,” said Marguerite Bolt, a hemp extension specialist in the Department of Agronomy at Purdue University. “A lot of farmers will only plant what they can afford to lose, which is still a cautious approach.”
Another issue, Berry says, is a lack of resources to process the hemp, once it’s harvested, into the various components needed for end-use products.
“The hardest part isn’t the growing. There’s no one out there to process it right now,” he said. “I think a lot of guys have been sold a bill of goods about how much money they can make on this. If it sounds too good to be true, it is.”
‘A LEARNING PROCESS’
The Indiana Legislature has been equally circumspect on its path to allowing the state’s farmers to grow hemp. When Gov. Eric Holcomb signed Senate Bill 516 into law in May, it represented a marker in what has been “a learning process,” according to state Sen. Tim Lanane, D-Anderson. Lanane, the State Senate minority leader, said the bill took at least “a couple years” to work its way through the General Assembly.
“A lot of recommendations were put into the bill,” said Lanane, who sat on the Committee on Commerce and Technology, which heard testimony from Indiana State Police officials and others on the topic. “We were pretty careful in terms of trying to set up a structure that could be regulated and is all on the up and up.”
Because of hemp’s similarities to marijuana, Lanane said legislators had to work through several misconceptions, especially since marijuana has been legalized for recreational use in 11 states, including neighboring Illinois.
“Any fears that this could allow a whole bunch of pot to be grown were really dispelled,” Lanane said. “There was a person brought in from another state (to testify) who had utilized industrial hemp production and had had a lot of practice with it. I think the committee and everyone involved did their homework and really studied the issue.”
The law as it’s written is almost certain to be amended, Lanane said, as legislators hear additional feedback from farmers, law enforcement officials and stakeholders in industries where hemp becomes more widely used.
“What I’m hearing is 2020 is when we’re really going to find out if it takes off,” Lanane said. “As far as hemp production goes, 2020 I think will be the year we really find out more about it, and we’ll go from there.”
Barring another spring of record-setting rainfall, Bolt said next season should provide a much more accurate barometer on whether hemp truly becomes a mainstay of Indiana’s agricultural inventory.
“I think we will find out how hemp can fit into our crop rotations and if it really is going to be a sustainable part of our farm economy in Indiana,” she said.
As more states legalize hemp, the opportunity to grab a piece of what is already a $1.2 billion industry, according to the Hemp Business Journal, will likely entice many more farmers in Indiana to consider planting it, at least on a trial basis. Officials with the Midwest Hemp Council said farmers in the state planted about 3,000 acres this season, and that figure is expected to double or triple next year.
“Our most innovative farmers are always evaluating opportunities to diversify their farms for additional stability,” said Indiana Farm Bureau President Randy Kron. “For some farmers, hemp will become just that. It’s an individual decision for each farmer whether hemp will work for their business, but it’s great to have another option for a crop.”