July 1, 2020
WASHINGTON, The National Industrial Hemp Council (NIHC) and The Hemp Industries Association® (HIA®) announced today they’ve entered into an agreement to work together to explore the creation of a marketing checkoff program to promote hemp.
USDA checkoff programs seek to promote farm commodities and expand market opportunity for farmers, importers, and industry stakeholders. Funded through assessments on the produced commodity at the first point of sale; checkoff programs allow producers of commodities to pool resources for research, education, and promotion efforts that can expand sales and improve production efficiencies.
Currently, USDA Agriculture Marketing Service (AMS) oversees 23 checkoff programs for various commodities ranging from cotton to pork to Christmas trees. A study in 2018 by Texas A&M found that the existing 23 checkoffs had a return on investment for farmers and ranchers ranging from three to seventeen dollars in value that came back to the producers for every checkoff dollar invested.
“Today is another step forward in the right direction for hemp farmers and consumers of hemp-related products,” said Patrick Atagi, Board Chairman of the National Industrial Hemp Council. “A checkoff program further legitimizes a rapidly growing industry and will help hemp farmers compete on a level playing field with producers of other agricultural-related commodities.”
“The HIA continues to focus on building the hemp economy and bringing industries together, beginning with hemp farming,” said Rick Trojan, President of The Hemp Industries Association. “This first-of-its-kind agreement with NIHC creates a focus on gathering data and distributing education as hemp cultivation expands nationally. It’s through these types of collaborations that we learn together and establish a solid foundation for hemp today, and over the next decade.”
The production of hemp was made legal by the 2018 Farm Bill passed by Congress and signed into law by President Trump. The passage of that landmark legislation legalizing hemp and the commodity later being removed from the list of controlled substances has seen industry revenues continue to grow.
In 2020, the USDA estimates that hemp producers will increase sales by $25.5 million. The Department expects sales to increase to $64.5 million in 2021 and to top $100 million in the year 2022.
The NIHC and HIA expect to form a working group with representatives from across the industry that would discuss the details of how a hemp checkoff would be structured and operate. The effort of the working group would guide the development of a proposal to submit to the USDA that will include an industry analysis; justification for the program; program objectives; and the impact on small businesses.