The prospect of Oregon farmers growing hemp has the region’s largest agricultural lender scratching its head about how to proceed.
Although questions remain about the federal legality of growing hemp for fiber, oil, cosmetics and foods, the Oregon Department of Agriculture intends to adopt production rules in time for spring planting should farmers want to go that route, department spokesman Bruce Pokarney said. Whether farmers could get financing, as they routinely do to produce other crops, is an open question.
Northwest Farm Credit Services, the lending cooperative that specializes in loans to farmers and ranchers, hasn’t taken a position on providing money to hemp growers, regional Vice President Bob Boyle said. Most likely, it would be treated as other commodities.
“The key things you look at in financing a crop are, is there a legitimate market,” Boyle said. “And if it’s grown, will it produce enough revenue to support repayment of the loan?
“Here, you have an unknown, and along with it a number of issues that are yet to be resolved,” he said.
The organization’s board of directors, made up primarily of farmers, most likely would have to decide whether to finance hemp operations, Boyle said.
“We’ve got to be absolutely confident that production is legitimate and the market for that product is defined, and that if a contract exists for production, that it’s valid,” he said.
The Oregon Legislature passed a law approving industrial hemp cultivation in 2009, but it was never implemented because the federal government continued to classify hemp as an illegal drug like its cousin, marijuana.
Supporters say hemp’s level of THC, the element that makes pot smokers high, is far below marijuana’s. Instead, hemp’s fiber and seeds can be used to make cloth, rope, lotions, lubricants and food. Advocates have long maintained that industrial hemp could be an alternative crop for farmers looking to diversify.
Hemp’s legal status may have changed. The federal justice department said this summer it won’t prosecute cases in states such as Washington and Colorado that legalize and regulate marijuana. The U.S. attorney for Oregon, in what may have been an offhand remark, said the decision applies to hemp production in Oregon, because the state’s 2009 law provides the required “robust” regulatory structure.
U.S. Attorney Amanda Marshall has since declined numerous requests from the Capital Press to clarify her remarks.
The state ag department, however, has decided to prepare just in case. Pokarney, the department spokesman, said eight or nine people will be appointed to a rules committee. Members will include potential growers and end users – people who would use the seeds or fiber. Russ Karow, head of the Crop and Soil Science Department at Oregon State University, will be among the committee members, Pokarney said.
The rules proposed by committee members will be subject to a public hearing. “There will be plenty of scrutiny of what we put together,” Pokarney said.
Oregon’s law requires hemp growers and manufacturers to obtain a permit from the state. The statue requires a minimum growing operation of 2.5 acres. THC levels would have to be certified as well.
U.S. Rep. Earl Blumenauer is hosting an industrial hemp forum and panel discussion on Saturday, Nov. 9, from 10 a.m. to 11:30 a.m. at the White Stag building, 70 N.W. Couch St., Portland.