Marijuana Moment
By Kyle Jaeger
The U.S. Department of Agriculture (USDA) announced on Friday that it is expanding its coronavirus relief program for farmers—and this time around, hemp cultivators are eligible for benefits.
In May, USDA said it would be making $19 billion available for agriculture producers to assist them amid the pandemic. But it excluded hemp and several other crops, stating that they don’t qualify because they didn’t experience a five percent or greater price decline from January to April. Industry stakeholders contested that point, arguing that there’s insufficient data to establish that given how young the newly legal market is. They said they were suffering just like other sectors.
It seems the department got that message and chose to accommodate the industry. A new round of funding through USDA’s Coronavirus Food Assistance Program (CFAP) includes a payment category for “flat-rate crops” that lists hemp as eligible.
“Crops that either do not meet the 5-percent price decline trigger or do not have data available to calculate a price change will have payments calculated based on eligible 2020 acres multiplied by $15 per acre,” USDA said in a notice. “These crops include alfalfa, extra long staple (ELS) cotton, oats, peanuts, rice, hemp, millet, mustard, safflower, sesame, triticale, rapeseed, and several others.”
Jonathan Miller, general counsel at the U.S. Hemp Roundtable, told Marijuana Moment that the group is “thrilled” to see USDA take this step, though some stakeholders are saying that the calculation the department is using to determine benefits under the program “might not be as generous as for some other crops.”
“This is a very significant development for the industry,” he said. “We just want to be sure that our farmers are treated fairly just like other farmers.”
The office of Senate Majority Leader Mitch McConnell (R-KY), who has championed the industry and helped advance the crop’s legalization, highlighted the policy change.
In April, Congress approved a COVID-19 package that made hemp businesses eligible for federal disaster relief through the Small Business Administration (SBA).
For the past two years since hemp was federally legalized through the 2018 Farm Bill, USDA has been hard at work developing regulations and reaching out to the industry to ensure that the market has the resources to thrive.
This month, for example, it reopened a 30-day public comment period on its proposed rules for the crop in order to gain additional feedback on a number of provisions that stakeholders had expressed concern about. SBA recently asked USDA to extend that comment window. The department’s rule for hemp, when finalized, is set to take effect on October 31, 2021.
In July, two senators representing Oregon sent a letter to Perdue, expressing concern that hemp testing requirements that were temporarily lifted will be reinstated in the agency’s final rule. They made a series of requests for policy changes.
Sen. Cory Gardner (R-CO) called on USDA to delay the implementation of proposed hemp rules, citing concerns about certain restrictive policies the federal agency has put forward in the interim proposal.
Senate Minority Leader Chuck Schumer (D-NY) last month wrote to Perdue, similarly asking that USDA delay issuing final regulations for the crop until 2022 and allow states to continue operating under the 2014 Farm Bill hemp pilot program in the meantime.
As it stands, the earlier pilot program is set to expire on October 31. The senators aren’t alone in requesting an extension, as state agriculture departments and a major hemp industry group made a similar request to both Congress and USDA last month.
Perdue has said on several occasions that DEA influenced certain rules, adding that the narcotics agency wasn’t pleased with the overall legalization of hemp.
As all of this rulemaking continues, USDA has been systematically approving hemp plans from states and tribes. Utah is the latest state to have its proposal approved.
