WASHINGTON — The federal government is ready to regulate the production of industrial hemp, allowing more farmers in more states to grow the plant that is related to marijuana but has many uses in the marketplace.

An interim final rule establishing the U.S. Domestic Hemp Production Program, to be published in the Federal Register Oct. 31, includes provisions for the U.S. Department of Agriculture to approve hemp production plans from states and Indian tribes and to establish a federal plan for hemp producers in areas that have allowed hemp production but do not have their own approved hemp production plan.

The state rules must include procedures for tracking where hemp is produced; testing for THC, the psychoactive compound that gives marijuana users a high; disposing of plants that exceed 0.3% THC; licensing growers; and ensuring resources to run hemp programs.

Farmers in states that have not authorized hemp production — including South Dakota — still will not be able to grow the crop, said Greb Ibach, USDA under secretary for marketing and regulatory programs, in a call with media on Tuesday, Oct. 29. But interstate transportation of hemp and hemp products will be allowed.

Along with the rule, USDA also has established guidelines for sampling and testing procedures.

Because hemp is a close relative of marijuana, growing hemp was prohibited for generations. The 2014 Farm Bill authorized pilot programs of industrial hemp production, and the 2018 Farm Bill legalized the commercial production of hemp. Hemp can be raised for seed, fiber or CBD oil; hemp products include textiles and fibers and hemp oil, and many people believe CBD oil can help with medical conditions.

Ibach said that while data is not complete, acres in hemp production appear to be increasing rapidly. He’s heard estimates of 500,000 acres of hemp grown in the U.S. in 2019, up from 120,000 in 2018. Ibach stressed that USDA has recommended that growers establish relationships with reliable processors or end-users. He anticipates that growers’ experiences during this year’s harvest will be influential in determining whether hemp acreage continues to increase “or whether producers take a step back.”

“There’s a lot of interest in hemp — a lot of interest in growing it, certainly a lot of interest in the experience of folks who are growing it, too,” said Bill Northey, USDA under secretary for farm production and conservation.

Northey explained that farmers will have crop protection options, including Risk Management Agency’s Whole-Farm Revenue Protection coverage or Farm Service Agency’s Noninsured Crop Disaster Assistance Program, for hemp for the 2020 growing season. He said higher than allowed THC, which can result from things like variety selection and weather, will not be a covered loss under crop insurance programs.

Hemp producers also will be eligible for FSA loans and Natural Resources Conservation Service programs. Farmers will need to report acreage on hemp to FSA, just as they do for other crops, Northey said.

Approving state plans

Ibach believes most states that have authorized hemp production will submit their own plans. Once plans are submitted, the USDA will have 60 days to review and approve them. The Agricultural Marketing Service plans to “work on an interactive basis” with states to bring plans into compliance, he said. Questions on the process can be sent to farmbill.hemp@usda.gov.

While South Dakota has not allowed hemp production, North Dakota, Minnesota and Montana already have established hemp industries. Those states will need to submit their plans to USDA if they haven’t already.

Michelle Mielke, public information specialist at the North Dakota Department of Agriculture, said North Dakota previously submitted a plan to USDA. Officials will make sure that plan matches the newly released USDA plan and will make any adjustments needed to align it to federal requirements.

Allen Sommerfeld, Minnesota Department of Agriculture senior communications officer, said the Minnesota Department of Agriculture is reviewing the USDA’s interim rule and plans to reach out to stakeholders for comment and submit to USDA soon.

“We will compare that with our current plan and work to bring our plan into compliance with the federal rule,” he said.

A draft of the interim final rule can be found here.

For more information on the U.S. Domestic Hemp Production Program click here.

For more on crop insurance, safety net, conservation and loan programs offered for hemp producers, click here.

USDA officials said they welcome comments on the rule.