Fee plan in hemp program gets OK

But panel rejects dicamba change

The state Plant Board on Tuesday approved a fee schedule to fund the state's industrial hemp program for this year and denied a petition to set a stricter cutoff this spring on the use of dicamba.

The Arkansas Department of Agriculture largely funded the hemp program, which had its inaugural season last year, through its current budget, except for $50 application fees and $200 license fees for growers and processors.

The new schedule sets fees on samples, on greenhouses and by acreage. Total fees per license-holder will amount to about $1,000, which the U.S. Department of Agriculture says is an average across the nation.

Most of the license-holders who attended the Plant Board's hearing said they generally had no problem with the fees, calling them necessary for the state to have a hemp program that's adequately staffed and equipped. "I work with people in Northwest Arkansas who are spending millions," said Jody Hardin, a co-founder of Arkansas Hemp Genetics.

The Plant Board, however, balked at making other changes sought by hemp growers and processors, the first Arkansans to raise and handle a crop that was banned in the U.S. for decades because it was considered a cousin to marijuana. Legal hemp must contain less than 0.3% total THC, or tetrahydrocannabinol, the compound that gives marijuana users a high.

The 2014 farm bill approved by Congress allowed states to set up research programs to determine the commercial viability of hemp. The 2018 farm bill allowed states to continue the research programs through the rest of this year or establish commercial programs.

Arkansas chose to retain the research program for another year.

Hemp supporters say state law and, by extension, Plant Board regulations prevented them from fully benefiting from last year's crop because of the continuing prohibition on the direct in-state sale of hemp flower, the most valuable part of a hemp plant. Arkansas retailers, meanwhile, can buy the same flower from out of state and sell it, they said.

The Plant Board has contended that the law requires hemp flower to be processed into a "hemp product" before it can be sold at retail in Arkansas and that the board can't do anything to its regulations until the General Assembly changes the law.

David Owen, an owner of Ouachita Farms, a licensed hemp grower and processor, said 95% of hemp growers in Arkansas lost money last year, mostly because of the restrictions on selling hemp flower. If the Plant Board waits for the Legislature to change the law, then some growers and processors will go out of business, Owen said.

Caleb Allen, manager of Arkansas' hemp program, told board members that the state Agriculture Department last year approved hemp planting of just under 4,000 acres. Farmers wound up planting 1,818 acres and harvested half of those.

The department issued 125 licenses to growers and 33 licenses to processors, who together invested $12.8 million last year, according to Allen's statistics. The nascent industry created 140 full-time jobs, he said.

Growers' sales of hemp to processors amounted to $845,972, Allen said. Gross income for growers amounted to $702,291, for an average profit of $3,266.

Processors sold $618,300 of the product.

For 2020, so far, the department has issued 136 licenses for growers and 36 for processors, Allen said.

Meanwhile, for dicamba, an herbicide linked to crop damage across Arkansas and other states since 2016, the cutoff this year for spraying will remain on May 25, the Plant Board said.

Members voted 11-3 to deny an effort by Audubon Arkansas to move the cutoff date to April 15, effectively removing the weedkiller's use during the summer, when fast-growing weeds start to threaten a crop's yield.

But it's those higher temperatures, along with higher humidity levels, that increase dicamba's propensity to move off target and damage crops and other vegetation, Dan Scheiman of the conservation group said.

Scheiman had his sympathizers.

Dicamba manufacturers such as Bayer (now the owner of Monsanto) have failed to improve a product that has damaged crops for four years in Arkansas and other states, said Russell Bragg of Fayetteville. "They have tried to make it all against the Plant Board," he said. "They've deflected [responsibility]."

The board set this year's May 25 cutoff in mid-December, ending a rule-making process that had started in August with the board's pesticide committee.

Some farmers in Arkansas already have planted soybeans, and a change now would be unfair, even if it could be implemented, said Brad Koen of DeWitt.

The federal Environmental Protection Agency has licensed the in-crop use of dicamba through November.

Business on 03/11/2020