Hemp: The Stimuli for Environmental and Economic Relief, pt 1.

Benjamin Beilman

A Brief Introduction

As an adolescent I grew up in western Colorado hearing about the controversial plant known as hemp. The legal definition of hemp classifies it as cannabis containing less than 0.3% THC, as of the Agricultural Act of 2018. Prior to this, I was primarily exposed to the rumor mill surrounding hemp. Everything I heard was beneficial until the other strains of cannabis entered the conversation in my conservative hometown of Grand Junction, Colorado. Then it became about legality, morality, and shame. As cannabis became a federally scheduled drug, hemp fell further out of favor. In recent years, it has fought its way back into prevalence along with its ousted cousins.

This is a strong move in the right direction and as people continue forward, hemp rights activists will continue to pave the way for the proliferation of this versatile plant. Through the rumor mill I heard claims that hemp is used in textiles, paper, foods, healthcare and hygiene products, industrial textiles, and even construction materials. The possibilities sounded near limitless, but now I needed to know, with so much potential in one resource – does the research back the hype?

Anyone can make claims in an attempt to further the discussion on sustainable products, energy, and production methods. What we need is irrefutable proof of processes that will diminish our carbon footprint on the planet and reduce pollution of our planet. This is the draw of hemp products, they are green and often biodegradable. Not only this but the plant itself is efficient in growth, requiring smaller amounts of water compared to the plants we produce our paper and textiles with.

According to the World Wildlife Fund, it requires 2700 liters of water to produce one cotton shirt. Want jeans with that? 8000 liters.  More than a grown human man consumes in two and a half years. Hemp on the other hand, produces 220% more fiber than a cotton plant. Cotton requires about 10,000 liters of water per kg, whereas hemp only requires approximately a quarter of that amount, 2123 liters of water to produce a kilogram of usable fiber.

One can see that there are benefits to our water intake when it comes to growth of hemp versus cotton. But is the fiber yield the same or greater? Can we get the same bang for our buck and produce the same amount of textiles through hemp while reducing water input? 

One acre can produce 2.5 to 3 tons of hemp fiber on average. If we use the numbers provided early at 2123 liters of water per kg of hemp, a 3 ton yield on one acre would equate to roughly 5,776,683‬ liters of water. Cotton in comparison would consume an exponential 27,210,000 liters to produce an equivalent amount due to its requirement of roughly 10,000 liters per kilogram (kg). Other reports indicate that production of one kg of cotton can take anywhere between 7000 and 29,000 liters of water.

This is a mark in hemp’s favor, but this does not answer another necessary question: can hemp fiber’s mass be used as efficiently as that of cotton? Does a pound of hemp fiber have as much utility as a pound of cotton fiber?

Hemp being harvested for long and short fibers.

The answers to these questions are somewhat nuanced. Cotton is a plant primarily grown for its textile qualities and use in the clothing industry, meaning the quality and volume of fibre make it ideal for use in textiles. The fibers in hemp will vary dependent upon the horticulture of the plant, it can produce high quality fibres for clothing but also has utility for paper, seeds, and biofuel.

Thus far, we have a plant that can create more mass in fibre given less water to work with and less acreage. The reduced acreage itself is also due in part to the geometry of hemp versus cotton. The tall and thin nature of hemp allows it to grow in higher density than cotton, granting more yield per acre. The comparison of hemp and cotton through fiber mass and land/water consumption through which to view the benefits of hemp and there are many other well established benefits that I will present. Before I delve into that, I will end this paper by taking a brief look at how our government can help empower the hemp industry and why it may be a necessity for them to do so. To understand this, one must have an understanding of subsidization and how it has helped prop up questionable industries such as corn, dairy, and soy.

The Incumbent Market

Take a look around your grocery store or even a food label. Undoubtedly, you’ll find an abundance of products comprised of corn, soy, wheat, and milk products. Isolates, derivatives, and chemical offshoots are replete. I am not bringing attention to this from a nutritional perspective, that is for another essay. Yet it begs the question, why are these components so popular in our food system? Why can these industries afford to sell cheaper and buy out their competitors? Do they truly have a superior product? Is their marketing strategy more efficient? One could make the argument that a marketing strategy is granted a higher probability of financial success when you have the American taxpayer backing your brand.

Example of how market statistics reflect agricultural sentiment.

Subsidization of different crop markets is intended to help agricultural industries in the United States prepare for variations in production and profitability from year to year – due to variations in weather, market prices (and the dizzying array of factors which can affect them), and other factors while ensuring a steady food supply for the country. However, this support tends to favor a quintet of major commodities programs: The aforementioned corn, soy, wheat, and cotton as well as rice.

There are two main branches of subsidization strategies which influence the popularity of these commodities, many of which were introduced in the 2014 farm bill. 

The first is Counter-Cyclical Payments. A form of insurance for farmers in which the government sets a price threshold for a crop and provides payouts if the price, which is based on historical data, dips below that level. The use of historical data can lead to confusing payout schemes in which farmers have received unjustified payments.

 With the introduction of the 2014 Farm Bill, this problem has compounded with the introduction of a new counter-cyclical program known as Price Loss Coverage. This program creates even higher price targets to cushion the industry, aid hemp’s competition, and create waves through the markets.

Another form of Counter-Cyclical payments are known as Agricultural Risk Coverages or ARCs, which operate similarly to the Price Loss Coverage. However, with an ARC it uses the company’s historical five year moving average as a metric to gauge payment necessity. The Price Loss Coverage method uses the national average to determine the benchmark for payouts.

The second of these strategies  is the use of marketing loans and loan deficiency payments. With the marketing loan structure, farmers are able to take a loan at a low rate and use their crops as collateral. The farmer can then market his crop at any time after the harvest and if he sells at a price higher than the loan rate, he can pay it back in cash. On the flip side, if market prices fall below that established loan rate then the farmer pays the lower rate, keeps the difference, and keeps their crop to sell later at a higher price.

Farmers can also forgo this process and opt for a loan deficiency payment or LDP. This payment is essentially just the difference between the loan threshold and the market price.

While these laws may be passed with good intention to provide security in the market, they also tend to favor the established market trends in a bid to protect American interests and not rock the boat. However, the boat gets harder to rock the bigger it is and then when you realize it was taking on water the whole time it is an even larger mess to deal with. The loose structure of market realization and historical analysis as a metric to determine payout ratios is a faulty model and promotes lack of competition in the market, even when there are more efficient processes and products available.

Please look forward to the next portion of this blog in the next issue of this series, Hemp: An Argument for Environmental and Economic Relief.

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