The Independent Community Bankers of America (ICBA) issued a comment on the United States Department of Agriculture’s (USDA) rule regarding the establishment of a domestic hemp program authorized under the 2018 farm bill.
The interim final rule to establish the domestic hemp program was originally published last October, but the comment period was reopened earlier this year, allowing for more feedback before the rule is finalized.
“ICBA appreciates AMS [the Agricultural Marketing Service] reopening the rule for public comments since hemp is a newly authorized crop and producers, lenders and other market participants will likely have additional recommendations and insights as the production, processing, transportation, marketing, and financing of this crop develops in the U.S.,” ICBA’s Senior Vice President of Agriculture and Rural Finance Mark Scanlan wrote in an October 2020 letter. “ICBA stands by the recommendations made to the AMS in our January 29 letter from earlier this year.”
The rest of the October letter reiterates the same suggestions from ICBA’s previous letter. These include no required suspicious activity reports; a robust crop insurance program; an extended sampling period for plant testing; broader categories and listings of testing labs; and no destruction requirement should THC levels be higher than allowed.
“Lenders have noted a variety of risks that have dampened enthusiasm of producers to grow hemp,” Scanlan wrote. “In addition to the potential losses from weather-related events, there is a significant risk to producers from having to destroy an entire crop if the THC levels are too high. There is also a risk of vendors, processors or purchasers not meeting the terms they agreed to with producers or not standing by their agreement to purchase a producer’s crop. AMS should consider ways to enhance risk protection for such exposures to ensure producers are not afraid to commit to producing hemp.”
The additional comment period has now closed. The USDA plans to issue a final rule after reviewing public comments and considering any additional information after the initial implementation.