FUNDING DELAYS KILLS HEMP PROJECT

Earlier this month a new publication came out from Agriculture and Agri-Food
Canada. Titled Agriculture in Harmony with Nature, the document outlining
Canada's Sustainable Development Strategy for 2001-2004 was printed on 15
per cent hemp paper.

Dave Ryan, co-ordinator of the Gitsegukla Hemp Project (GHP) said he found
this unbelievably ironic. This year there will be no harvest of industrial
hemp on the rich river bottom land beside the Skeena River, partly because
of lack of federal funding.

This was the fourth year of the sustainable agriculture and economic
development project, and it was supposed to be the commercial year.

After three years of research, harvested seeds from 50 acres of hemp were to
be used to create marketable products.

The eventual products might have included fibre for paper, such as the kind
used to print the federal sustainable agriculture document.

However, a series of delays, combined with apparent mis-communication
between two of the four originally involved funding agencies, no funding was
received at all.

The delays proved detrimental. Seeds need to be planted early for a
successful crop, so the group went ahead and planted ten acres.

The ten acres of hemp that were planted and plowed under were the minimum
amount required to keep the GHC legal license to grow the plant.

Only a limited amount of a large crop can be harvested without machinery.
According to Ryan it was not possible to process even that ten acres amount
by hand.

The GHC were counting on purchasing equipment for harvesting and processing.
Considering the problems with funding agencies, Gitsegukla Hemp Corporation
(GHC) board member Elmer Derrick said "Part of the problem is the business
we are in, people get giggly or giddy when you mention hemp. They think it
is the smoking kind."

Derrick noted that most government projects are short term, and this is long
term, making use of the resources at hand the land and the people willing to
work.

The GHC was asking for a total of just over $800,000 from various sources.
Indian and Northern Affairs Canada (INAC) was asked to provide $200,000, and
the First Nations Agriculture Lending Association (FNALA) was asked for
$200,000.

The FNALA money was to be used to purchase a farm with buildings for storage
and production in commercial venture - next to the current hemp field - as
well as improving dirt roads in the hemp growing area.

The now defunct Community Economic Adjustment Initiative (CEAI), which was
created to assist communities hard hit by the downturn in the fishing
industry), was asked for $125,000.

CEAI was administered through Community Futures 16/37 (a funding agency for
community enterprises in the northwest), which was also asked for $125,000.
The INAC, 16/37 and CEAI funds were sought to purchase used farm equipment
for seeding and cultivation of 50 acres, and a cleaning machine and oil
press for processing the seeds.

The Gitsegukla First Nation would have contributed $190,000 in employment
funds.

Over the past years the band has already invested in the hemp project, to
the tune of $240,000 from a band trust fund.

The process of events for this past growing season began over a year ago.
According to Ryan, the GHC business plan was sent to INAC in Oct. 2000. It
was then sent out for third party assessment and arrived back at INAC in
June 2001, nine months later.

GHC applied in Feb. 2001 to CEAI, and were informed in March 2001 their
application had been deferred, and CEAI wanted the proposal assessed and
reviewed, "by a third party."

This assessment was carried out by the Terrace 16/37 staff and sent to the
CEAI Vancouver office in April, around the time the seeds should have been
planted.

The project was approved, as a repayable loan in early May, as long as
certain conditions would be met by June 26. GHC thanked CEAI, but appealed
the repayable condition of the loan.

During the delays of spring and early summer, FNALA backed out because if
the equipment purchase money was to be a repayable loan, there would be no
equipment owned by the project and so no collateral for FNALA.

The Vancouver office of INAC eventually approved their funding portion and
sent the paperwork to Ottawa since all project funding of over $100,000 must
be approved there.

INAC did not inform 16/37 and CEAI of the approval decision, which meant
that the June 26 deadline was missed for CEAI approval.

On July 19 CEAI turned down the appeal and in an Aug. 10 letter stated no
money would be given at all According to Ryan, in mid-July Gitsegukla
informed CEAI that "agriculture does not wait," and asked for approval to
start the project in the spring of 2002. There was no response.

In Sept. INAC informed GHC that their approved $170,000 will not be released
because CEAI did not approve of the project.

Neil Reiner, communications officer with the Vancouver office of Indian
Northern Affairs Canada (INAC) said that in cases such as the GHC project
they have to know that sources of additional funding are secured.

When asked about the nine-month delay of processing the agricultural
business plan, Reiner said "In terms of that, the time lines, we have to be
very careful that all of the projects applying for funding can demonstrate
sustained economic viability. That process is very thorough and can take
some time."

At the same time Reiner reaffirmed the position of Minister of Indian
Affairs and Northern Development, Robert Nault, that there is a strong
commitment to economic development for aboriginal communities.

In a June 28 2001 letter to "all chiefs," presumably in Canada, Nault stated
that funding for economic development in First Nations communities had gone
from $25 million to $200 million in 2001-2001, and "what has become apparent
is the outstanding capacity of First Nations

Stating that INAC thinks the hemp project is great and they would really
like to see it happen, Reiner added that INAC economic development officers
are working with Gitsegukla Hemp to restructure its plan so they can apply
for funding in the spring.

While the business plan was approved, he said they could not approve the
funding flow "because we did not have evidence that other funding sources
were in place."

Joe Whitney, head of the Terrace 16/37 office said in mid-November that the
whole hemp project funding failure "Is like flogging a dead horse, because
CEAI is no more." He was reluctant to discuss details of the process.

As far as the repayable nature of the loans, Whitney said that any money for
equipment in any project was a repayable loan.

Ryan noted that five major 16/37 CEAI projects in the Gitxsan territories,
.including the Kispiox Visitors centre, the 'Ksan historical village and
museum improvements, a heritage village in Gitwangak and a historic village
in Gitanyow, the LaxSkiik (eagle clan) eco/cultural tourism and youth camp
project, (located on the north side of the Skeena River between Terrace and
the Hazeltons), all for $250,000, were not repayable.

Whitney maintained that actually they would like to accept all the proposals
put forward from the north accepted, but that is not realistic. "Everybody
did their job as best they could, but hey, it didn't happen," said Whitney.

Looking ahead to next year, Ryan and the board of the Gitsegukla Hemp
Corporation are working with Prince George based Jammi Kumar, a First
Nations Extension Aerologist with the Ministry of Agriculture, Food and
Fisheries.

Kumar agrees there was a problem for GHC in communications and co-ordination
among the different funding agencies this past growing season, but looking
ahead with a positive attitude he laughed "Well we learn by our mistakes!"
Kumar said they will review the existing proposal and try another form, plus
looking at other options.

Already looking ahead, Gitsegukla has planted two five-acre plots, one of
organic blueberries, and another of black currants.

A transformation for the hemp project might be to involve more community
participation through giving village residents responsibility for one-acre
or two-acre plots of a planned 15 acre hemp planting.

The role taken by the Gitsegukla Hemp Project is pioneering and great role
modelling, said Kumar.

"This is an industry which is not highly commercialized, yet, and I'm seeing
this as an industry being led by First Nations in B.C.," said Kumar.

He described a potential industry developing that would see aboriginal
communities around the province growing hemp to be processed at a plant in
Gitsegukla.

"That is the vision which I'm trying to work toward," said Kumar. The
federal Agriculture in Harmony with Nature document notes in a section on
sustainable communities that: "It is within AAFC's (Agriculture and
Agri-Food Canada) mandate to invest in people and strengthen economic
development. We will continue to improve economic opportunities in
Aboriginal communities as part of our rural development approach."

Ryan said he and the board of the Gitsegukla Hemp Corporation hope to see
some action to back up the words of government, and are not giving up. They
are hoping for a more rewarding agricultural adventure next spring, as well
as improved communication, commitments and timely response from government
agencies.