TOBACCO DEAL FUELS DEBATE ON HEMP

FRANKFORT, Ky. - The threat to tobacco from the multistate settlement with
cigarette makers has heightened the debate over hemp.

One side makes it out as a wonder weed – the cure for the economic ills of
farmers; a miracle medicine; and an endless source of oil, fiber and
products from cosmetics to furniture coverings, fiberglass and food
supplements.

The more restrained view of hemp is as a novelty with limited economic
prospects because of competition from cheaper materials and a dearth of
processing facilities.

The third perspective is that of the U.S. Drug Enforcement Administration:
Hemp, industrial or otherwise, is cannabis sativa. It is an illegal plant
whether it contains less than 1 percent of the hallucinogenic
tetrahydrocannabinol or 15 percent. Growing it is a federal crime, no
matter what states allow.

The debate over hemp keeps cropping up like the hemp plants that pop up
along fence rows, descendants the hemp grown in Kentucky during World War II.

As the settlement with cigarette manufacturers heightens the debate, the
Kentucky Long-Term Policy Research Center has invited University of
Kentucky researchers to separate fact from the haze of claims about
industrial hemp. Two views are presented side-by-side in Foresight, the
center’s publication.

Valerie Vantreese of the department of agricultural economics has become
something of a villain among champions of hemp. She put together much of a
report that torpedoed a task force on industrial hemp at the end of Gov.
Brereton Jones’ term. Vantreese concluded then that hemp was not feasible
as a major commodity. In three annual reviews, not much has changed, she
said in an interview.

On the other side are three professors from the UK Center of Business and
Economic Research, who put a more optimistic spin on the prospects for hemp
but ultimately concluded its economic impact would be about the same as
opening one medium-size factory in the state, but with lower wages. One of
the best-case scenarios was for 770 jobs, with combined pay of $17.6 million.

Since the early 1960’s, world hemp production has fallen 70 percent.
Vantreese said that belies the notion that industrial hemp is profitable
where it is legal – which includes most of the rest of the world.

But the study by Eric Thompson, Steven Allen and Mark Berger, of the Center
for Business and Economic Research, noted that hemp production in
wealthier, more industrialized nations such as France, Germany and Canada
has risen dramatically in this decade.

Vantreese notes, however, that the business center study was financed with
a grant from the Kentucky Hemp Museum and Library, and she said it “paints
an optimistic view of market size and price competitiveness of industrial
hemp.”

The study by the business center said the best chance to benefit from
industrial hemp would be for the state to be among the first to legalize
cultivation and capture early investments in the industry.

But Vantreese said the clues to the future of hemp are found in the
boardrooms of huge agriculture concerns:

“If the large multinationals can’t make hemp work in the marketplace, what
type of costs and return differentials might small farmers and businesses
work toward? That is the crux of the great hemp debate.”