What USDA Says About Hemp Farming Rules

The 2018 Farm Bill legalized the production of hemp as a commodity and removed it from the Schedule 1 list of controlled substances. However, without regulatory framework detailing how and where the emerging industry will grow, much has remained uncertain.

On October 29, USDA Secretary of Agriculture Sonny Perdue announced the publishing of a rule called the U.S. Domestic Hemp Production Program. Undersecretary of Agriculture for Marketing and Regulatory Programs Greg Ibach and Undersecretary for Farm Production and Conservation Bill Northey hosted a call explaining the federal plan for hemp farming. The undersecretaries addressed a number of questions surrounding the program and its implementation.

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"We have our teams operating with all hands on deck to develop a regulatory framework that meets congressional intent while seeking to provide a fair, consistent, and science-based process for states, tribes, and individual producers who want to participate in this program," Perdue says.

He explains that under the program, all hemp famers must be licensed and follow testing protocols, "to ensure that hemp grown under this program is hemp and nothing else."

Perdue adds, "At USDA we're always excited when there are new economic opportunities of our farmers, and we hope the ability to grow hemp will pave the way for new products and markets, but I encourage all producers to take the time to fully educate themselves on the process, requirements, and risks that come with any market or product."

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How is hemp being regulated?

"The interim final rule includes provisions and procedures for… disposing of noncompliant plants, compliance provisions on how to handle violations as a result of inspections on farms, procedures to share information with law enforcement, and then we are also going to assure states and tribes that have programs have resources available to manage those plans," says Ibach.

Later in the call, Ibach clarifies there will not be a USDA funding program to assist states and tribes. "Most of the programs that states and tribes are setting up are cash based, and so producers pay a fee to be able to participate in hemp production. Those fees cover the cost of the program that the state administers."

What do state plans need to include, and how do they get put into place?

Ibach says, "We will work with states and Indian tribes to establish approval of their federal plans. And we will also work with producers in states or tribes who do not have a USDA-approved plan as long as the production of hemp is not prohibited in those states."

States and tribes that submit plans will work with AMS. The statute says these plans should be evaluated within 60 days of their submission.

What about farmers who live in a state where there is no USDA-approved hemp plan?

"There will be a 30-day waiting period for USDA to start looking to license producers whose states and tribes do not submit plans for approval," explains Ibach. "We want all states that plan to submit plans to be assured that all producers in their state will be operating under their state plan as we move forward."

How do hemp farmers test for THC?

"We are going to require that testing is done in a DEA-registered laboratory," says Ibach. "Sampling must be conducted within 15 days prior to anticipated harvest by a USDA-approved sampling agent, or a federal, state, or law enforcement agent who is local that will collect samples from the flower material."

A guidance document will be provided that includes the specific steps for sampling, including how to collect a statistically representative sample of a farmer's crop.

"We'll also consider alternative sampling and testing protocols that the states might submit if we believe they will result in comparable or similarly reliable testing results," says Ibach.

How will violating plants be handled?

There are different degrees of violation for plants that test positive for levels of THC above 0.3%.

"We've been getting questions about those results that may fall outside the 0.3, which is established by the statute as the line between hemp and marijuana. So in the testing results, we will look at a measurement of uncertainty that must be estimated and reported with the test results to ensure the test uncertainty is taken into account," Ibach says. "If the actual THC level is within the range of the measurement of uncertainty, the results will be considered acceptable. A measurement of uncertainty is a scientific calculation that makes allowances for variation in sampling and testing procedures."

Can hemp farmers participate in conservation programs?

"Generally, if hemp producers are in states or tribal agreements with a USDA plan, or operating directly under USDA authority, or this next year, operating under the current 2014 hemp farm bill hemp pilot program, they will be able to participate in USDA conservation programs," says Northey.

What loan options are available for hemp farmers?

"Farm Service Agency is developing loan programs for hemp producers, which will be available on a limited basis. We're talking about establishing operating ownership, beginning farmer, and on-farm storage loans for this next year," Northey says.

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What risk-management options are available for hemp farmers?

"Diversified producers who grow hemp will also be able to purchase whole farm revenue protection as long as they have at least a five-year history of farming income or three-year history of income for those who are beginning or veteran farmers," Northey says.

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He adds, "Many hemp producers will also be able to buy noninsured crop disaster assistance, which is offered through the Farm Service Agency, which will give them essentially an insurance coverage in the event of adverse weather events. That is going to be established this next year and would be available where crop insurance is not available."

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What do hemp farmers have to do to take advantage of FSA programs?

"To take advantage of these USDA programs, hemp producers will need to file an acreage report with the Farm Service Agency," Northey explains. "That's typically done after spring plantings are complete. So, that would likely be next summer or, in many case, late spring."

"We'll also need the USDA, state, or tribal production license or authorization number, and they'll need to identify each field, or lot, or even greenhouses on which hemp is being grown," Northey says.

Producers also need to report how they intend to use the hemp – for fiber, grain, seed, or other processing.

More information is available in farmers.gov/manage/hemp.

Ibach adds, "We have worked at AMS very closely with FSA to develop a program where farmers who are growing hemp can follow the same procedure as corn or soybean farmers to be able to certify their acres at the local FSA office. It won't necessarily be a new system as far as the USDA expectations. States, as I said, could be more restrictive and may have different requirements within their state plan."

How much hemp will be produced now that rules are clearer?

"We have already seen a large growth in hemp production in the United States. It's estimated that in the 2018 crop year, about 120,000 acres of the different varieties of hemp were planted across the United States. I've seen estimates of over 500,000 acres that have been grown this year. I think the experience that producers have this fall with harvesting their crop, handling their crop, and finding buyers for their crop will be very instructive as to whether or not we see continued growth in the hemp industry or whether or not producers take a step back," Ibach says. "Throughout this process, USDA has cautioned producers who want to grow hemp to make sure they had a relationship with a reliable end user that would buy their crop at the end of the crop year. We're hoping that all those producers did line up a marketing plan and that they have a good experience."

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When will acreage data be available publicly?

"FSA has gathered some data over the summer, NASS has gathered some, but I think it is incomplete because producers weren't required to report this year. But next year we will have very good data," Ibach says.

How can industrial hemp be transported?

"With the publication of the interim final rule, states and Indian tribes may not prohibit interstate transportation or shipment of hemp lawfully produced under an approved state or tribal plan, a USDA-issued license, or the 2014 Farm Bill," Ibach says.

When does the Domestic Hemp Production Program go into effect?

"The rule becomes effective immediately upon publication in the federal register," Perdue says.

Ibach says publication is expected on October 31, 2019. "We will use the 2020 growing season as a chance to test-drive the interim rule to guide any adjustments that are made in the final rule. The interim final rule will sunset after two years, which gives us time to make it through a full crop cycle as well as deliver a final rule," he says.