Hemp: Can Cooperative-run Quotas Prevent Overproduction?
The legalization of hemp provides a new opportunity for small farmers in the U.S., and coming on the heels of trade wars and depressed crop returns, the timing couldn’t be better. However, while hemp production could support a decent living for these small farmers, production opportunities such as this will draw interest from producers of all sizes, which may determine its profitability. Hemp, just like any other crop, can be produced on a massive scale. The industrial system stands at the ready with machines, inputs, land-grant agricultural research universities, transportation systems, markets, and capital to plant hemp on large acreages and then process, market, and deliver it to consumers. Once unleashed, the vast majority of the crop could be grown on large acreages under industrial management, mechanized, and with few people on the land. Organic hemp could be another option offered by the industrial model, but could be equally mechanized. Within five to 10 years, any current profit advantage of hemp to farmers could diminish to the low level of market returns offered by other industrial crops like corn or beans. . . .
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