Hemp industry considers establishing checkoff program

Grace Connatser
Wisconsin State Farmer
Assistant professor of horticulture Shelby Ellison manages UW’s research and outreach efforts related to hemp varieties that are grown for CBD oil harvesting.

The National Industrial Hemp Council and the Hemp Industry Association are partnering on a joint effort to create a proposal to the US Department of Agriculture establishing a checkoff program.

The two organizations sent out a survey to industry stakeholders and received 270 responses (half of them farmers) that overwhelmingly indicated support for a checkoff. The survey asked separately about the need for additional research, a promotion program and a consumer education program; on average, around 80% of respondents responded with "somewhat" or "strongly" agree.

A checkoff program would provide those needs by increasing the marketing power for the industry as a whole, helping provide promotional support for hemp growers and processors. It would also provide funding for educational campaigns, which seems to be a pressing issue.

The summary of survey results said support was strongest for consumer education, though research and marketing were close behind. Patrick Atagi, board chairman of the NIHC, said there's many misconceptions and myths about hemp and CBD products, especially their legality since they are closely associated with marijuana.

"It also helps us conduct necessary consumer education. It can be a resource defending the industry," Atagi said. "There's some criticism on the industry and misunderstanding. Hemp is legal and CBD is legal under the federal limits and criteria."

Atagi also noted that checkoff programs can be controversial due to misinformation and explained that a checkoff would consolidate industry efforts to promote hemp and its many uses, including in textiles, bioplastics and dietary supplements. He said there will be a nominal fee for everyone included in the checkoff program if it happens, and the program is mandatory once established.

Patrick Atagi
John Johnson

Atagi claimed the hemp industry would be self-governed and hemp could become a more mainstream commodity if a checkoff program were established.

John Johnson, an NIHC board member, said it could take 12-24 months for the task force to develop further research into building a checkoff program and drafting a proposal for USDA. He said there are many requirements for a checkoff proposal, including industry analysis and profile, justification for the checkoff, proof of marketing issues and an annual budget outlook.

Johnson also said the industry as a whole will need to consider who is included in the checkoff – whether to keep it to growers or expand it to processors. A task force of 20 people between NIHC and HIA will determine the answer to that question and many others.

"There's a lot of questions that need to be answered by the hemp industry before we could actually formalize a proposal to USDA, and so that's why we're partnering with HIA to form a task force that will deliberate on these issues," Johnson said. "In addition, there's some more basic questions that the industry needs to answer for themselves to determine the advisability going forward and how to do that intelligently."

Despite thousands of requests, only a few hundred responses came back, which Johnson said prompts further research into what the industry really wants. He also said it's top of mind for the task force to be transparent about its intentions.

"It's critically important that the work of the task force be fully transparent and that regular communications be pushed out to the whole industry because the worst thing that can happen is operating in a black box or in a dark room, and then the rumor mill starts going into all kinds of misconceptions," Johnson said.

Rick Trojan, HIA president, spoke on the sustainability and health benefits of hemp and CBD.

Rick Trojan

"(We need) research to expand the opportunities to incorporate hemp – there's now hemp being used in bioplastics, offsetting carbon up by 25%," Trojan said. "People (need) to understand that hemp as a food is completely sustainable, you can add it to any of your dishes and get all your servings of proteins and omegas three six and nine. Just really helping people become more health conscious with the plant-based products that are coming out."

A checkoff would turn into a return on investment for farmers and potentially processors, Atagi said, adding that for every dollar they put into the program, they'll get more money back. The Agricultural Marketing Service also requires a routine review on estimated returns so that industry partners are kept up to date.