Posted August 27, 2013
The University of Kentucky recently released a study on the economic feasibility of hemp.  The study, available here, concludes that the currently illegal crop could be a profitable option for farmers in areas like Central Kentucky and that it is likely to produce few jobs, according to Gregory A. Hall of the Courier Journal. 
According to the Courier-Journal article, available here, the study was undertaken as Kentucky legislators considered Senate Bill 50, now a law which provides a regulatory framework for hemp production if the federal government were to legalize it.  The study “offers a more sober picture of hemp’s prospects and raises a number of questions that can’t be answered yet because the crop can’t be grown legally.”
Leigh Maynard, chair of UK’s agricultural economics department and a co-author of the study said that the authors did not want to portray the study as a negative outcome, but wanted “people to be aware that there is a lot of learning curve that both the producers and the processors would need to climb, and nothing is going to happen overnight in terms of a market springing full fledged out of nothing.”  Agricultural Commissioner James Corner said he is optimistic, saying, “It’s hard to measure an industry which doesn’t exist.” 
According to the study, hemp would most likely be a niche crop, profitable for its seeds when processed into oil for food, fuel, paint, and personal care products.  The study also questions how many farmers would choose to grow hemp, given that crop insurance, a federally subsidized safety net available for traditional row crops, is not available for hemp.
Of course, industrial hemp production is not possible without removing federal restrictions for growing the crop.  In February, Sen. Rand Paul (R-KY), Sen. Mitch McConnell (R-KY), Sen. Ron Wyden (D-OR), and Sen. Jeff Merkley (D-OR), introduced legislation to allow the cultivation of industrial hemp in the United States, according to a press release from Sen. Paul’s office, available here.  The Industrial Hemp Farming Act of 2013 would “remove hemp from the Schedule I controlled substance list under the Controlled Substances Act of 1970, and would define it as a non-drug so long as it contained less than 0.3 percent tetrahydrocannabinol (THC).”  The text of the Senate bill, S.359, is available here.  A companion bill introduced in the House by Rep. Thomas Massie (R-KY) and 46 other co-sponsors, H.R. 525, is available here. 
For a recent report on hemp as an agricultural commodity from the Congressional Research Service, please visit the National Agricultural Law Center’s website, here.