Could Kentucky Hemp Crops Be Lucrative?

KENTUCKY: A new University of Kentucky study on the economic feasibility of hemp says the currently illegal crop could be a profitable option for farmers in areas like Central Kentucky, but not everywhere.

And production isn’t likely to immediately result in the thousands of new jobs predicted by supporters of a new state law to regulate hemp production.

The study was undertaken as Kentucky legislators earlier this year considered Senate Bill 50, now a law that provides a regulatory framework for hemp production in Kentucky – should the federal government legalize it.

The 25-page analysis offers a more sober picture of hemp’s prospects and raises a number of questions that can’t be answered yet because it isn’t legal to be grown domestically.

“We don’t want to portray it as a negative outcome, but … it should be viewed as one more opportunity amid many opportunities for farmers,” said Leigh Maynard, the chair of UK’s agricultural economics department and a co-author of the study.

Most likely it’s a niche crop that can be profitable for its seeds, which can be processed for their oil that can be used to make foods, fuel, paint and personal care products, he said.

Agriculture Commissioner James Comer – who spearheaded the effort for SB50 – said the report “has no surprises,” buthe’s optimistic.

The report’s conclusion “wasn’t surprising to me because there’s so many unknowns,” said Harrison County farmer Brian Furnish, who is the new chairman of the state hemp commission after the final version of SB50 removed Comer from that post.

“In areas of the state that have lost the tobacco income since the tobacco buyout, it could be beneficial,” he said, referring to the buyout that ended the federal tobacco price support system.

Hemp is currently illegal because federal law classifies it with its higher-THC cousin marijuana, which police say is identical in appearance.

As such, the biggest impediment, more than market uncertainties, is the legalization effort at the federal level. Maynard said the UK study did not look at the possibility of a one-state waiver for Kentucky, deeming that to be politically unlikely.

The prospect of a regulatory change by Congress has gotten some traction, though no change.

A federal farming policy bill – known as the Farm Bill – included language to allow industrial hemp production for research purposes when it passed the House.

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