Gathering input for a hemp Checkoff program
by Courtney Llewellyn
The hemp industry needs a Checkoff. That’s what Patrick Atagi, board chair of the National Industrial Hemp Council believes, and that’s what an online survey illustrated too.
The NIHC, along with the Hemp Industries Association, hosted a survey from Nov. 30 – Dec. 31, 2020 which showed that nearly 80% of the 270 farmers and processors who responded would support a Checkoff program for research, promotion and consumer education. Over 60% of respondents supported being assessed to fund such a program.
“We’re really excited about this endeavor,” Atagi said. “The more we work together, the better.”
USDA Checkoff programs aim to promote farm commodities and expand market opportunity for farmers, importers and industry stakeholders. They are funded through assessments on the produced commodity at the first point of sale. Checkoff programs allow producers to pool resources for research, education and promotion efforts that can expand sales and improve production efficiencies. The USDA Agriculture Marketing Service currently oversees 23 Checkoff programs including livestock, field crops and Christmas trees. A 2018 study by Texas A&M found that existing Checkoff programs had a return on investment for farmers ranging from $3 – $17 in value that came back to the producers for every Checkoff dollar invested.
Atagi explained the U.S. Secretary of Agriculture handpicks a group from those who pay into a program to dictate where their money is spent. Checkoffs are self-governed by those in each particular industry. “And this is an exciting time in our industry,” he added. “Stock prices are going up, and money is coming back into the industry.”
HIA President Rick Trojan said, “It’s clear from the survey response that there is a broad level of excitement around the idea of a national hemp Checkoff program … We in the industry recognize the incredible potential of this agricultural commodity, and there was a strong consensus around the importance of educating the market about the value of hemp across the supply chain for food/grain, fiber and cannabinoids.”
But, he continued, lots of education that needs to be done and needs to continue regarding hemp. “The research needs to continue – there are already over 50,000 products that use it – and we need research on soil, nutrients, etc., just like with corn and soy,” Trojan said.
Atagi added that a major goal is creating a broad promotion program not one focused solely on CBD – for textiles, animal bedding and more.
Helping to explain the concept during a recent virtual presentation was John Johnson, formerly of the pork Checkoff program. “The biggest [programs] are dairy, cotton, corn, soy – we had budgets of up to $95 million,” he said. “Things like blueberries and Christmas trees are closer to about $1 million.” Johnson said it could take 12 – 24 months to work through a variety of issues before drafting a proposal for USDA. The hemp industry needs to think about what marketing problems Checkoff would address, how it would impact small businesses, what researchable issues they want to address, consumer education issues and a product promotion strategy. “You need to know what size budget you need on an annual basis to achieve your goals, and then figure out what assessment level you’ll need for those budgets,” he explained.
The NIHC and HIA are working on forming a task force of representatives from across the industry to discuss the details of how a hemp Checkoff would be structured and operate. The task force will guide the development of a proposal to submit to the USDA that will include an industry analysis; justification for the program; program objectives; and the impact on small businesses.
“We want all sizes represented, all geographic regions represented. We want processors as well as farmers,” Johnson said. The two organizations are looking to recruit about 20 people for this task force with broad knowledge of the industry. Those interested can email firstname.lastname@example.org.
“I’m confident the hemp industry would do a very good job” with a Checkoff program, Johnson said.
To see the full results of the survey mentioned above, visit hempindustrial.com/survey-results-hemp-checkoff-program.