Economy

Senate Majority Leader Mitch McConnell joined Kentucky Agriculture Commissioner Ryan Quarles and USDA Secretary Sonny Perdue in Louisville Tuesday to talk to hemp farmers and providers about the industry’s challenges.

All three officials echoed similar sentiments of the challenges hemp farmers and providers are experiencing, despite being just six months removed from the 2018 Farm Bill, which legalized the crop.

At hemp processor Commonwealth Extracts warehouse on Tuesday, McConnell said Kentucky is “in the red zone” with hemp.

“In other words, we’re close to the goal line but we have some residual issues,” McConnell said.

Evan Heichelbech | wfpl.org

USDA Secretary Sonny Perdue looks at some hemp products at Commonwealth Extracts in Louisville.

Perdue said the round-table discussions about hemp’s future with farmers and providers gave him optimism, but noted there is work to be done to get over some challenges.

One piece of the hemp puzzle is regulation. According to the 2018 Farm Bill, the USDA will create a federal regulatory plan and states will also have the option to create their own programs for regulation. Quarles said he expects the USDA to give regulatory guidance for the 2020 growing year later this year.

Perdue said finding a balance to standardize regulations so states will be “somewhat equal in the level playing field” is a need.

“We’ve got a regulatory framework that you have to develop not only in USDA, not only in the states, but also with other federal agencies over transportation and other types of handling of the crop,” Perdue said. “So that’s why we’re here to come talk to these pioneers who are forging ahead, breaking new ground with this crop to understand the issues they’re facing and how we can be part of creating a regulatory framework to allow them to succeed.”

Transportation issues, financial transaction issues and a need for modern farming techniques were among the other popular complications Perdue said he heard from farmers and providers.

“This new crop is, again, kind of being conflated with its illegal cousin in many states,” Perdue said, referring to marijuana.

The unknown production capacity of hemp makes it harder for farmers to secure crop insurance for hemp, and Perdue said the USDA will have a whole-farm revenue protection for the crop in 2020.

Evan Heichelbech | wfpl.org

Senate Majority Leader McConnell (left), USDA Secretary Sonny Perdue and Kentucky Agriculture Commissioner Ryan Quarles discuss hemp industry’s challenges at Commonwealth Extracts.

The other federal agency hemp advocates are waiting for is the FDA. The FDA has control to determine how hemp, and more specifically CBD, will be classified as a drug.

“We need the FDA to be a constructive partner with giving us guidance in which direction they’re going to point their compass with this crop,” Quarles said.

However, Quarles said the interest in growing hemp in Kentucky hasn’t been significantly halted. Kentucky approved about 60,000 acres for hemp growth in 2019. One thousand farmers are growing hemp in 101 of the state’s 120 counties so far this year, and Quarles said the state expects over $100 million sold in Kentucky-grown hemp products in 2019 alone.

“There are over 500 new jobs in Kentucky that exist today,” Quarles said. “That didn’t exist just a few years ago because we chose to lead. We’re building the economy. So although we don’t have as much data for you to share with this point, we do know that the opportunity is somewhat boundless right now.”

McConnell, who has a complex history with the tobacco industry, said hemp’s potential in Kentucky reminds him of Kentucky’s former booming tobacco business.

“We’ve now got some hemp activity in 101 of 120 counties and so I think that shows you there’s a lot of interest,” McConnell said. “We don’t know if this will be the next tobacco or not, but there’s a whole lot of interest.”

Correction: This story originally stated that 60,000 acres of hemp had been grown in Kentucky this year. 60,000 acres have been approved, but not necessarily grown.