USDA Says Hemp Value Did Not Decrease Sufficiently for CFAP Aid

In a rule posted in the Federal Register on Friday, the United States Department of Agriculture (USDA) explained that the hemp industry was excluded from receiving aid from the government during the COVID-19 pandemic because it did not reach the 5 percent price decline threshold. 

When the USDA announced additional items eligible for the Coronavirus Food Assistance Program (CFAP) on Tuesday, hemp was not included despite a request from the U.S. Hemp Roundtable claiming that the business received a price decline between 19 and 46 percent between January and April 2020.  

The USDA presented different data. “While the national price did decrease during the first quarter of 2020, it was only a 1 percent decrease, which did not meet the 5 percent or greater decrease in price for CFAP eligibility. The national price is represented by the average of 5 regional published hemp biomass benchmark midpoints. USDA has determined hemp is not eligible for CFAP due to not meeting the 5 percent or greater price decline, nationally,” Friday’s notice states. 

In the initial CFAP announcement, hemp was not included and it was specifically excluded from seeking reconsideration. The USDA changed the announcement within a few hours taking out the language that excluded hemp from petitioning to be included in the program. Tobacco, the only other product with that distinction, was still not granted the ability to ask for a reevaluation. 

Hemp producers and advocates have argued that the price decline in hemp is harder to assess accurately because the product has only recently become legal. They also claim that many hemp producers enter agreements for processing the hemp biomass into oil or other products, and will receive money for their crops during the next year. Because of this, the money producers receive for last year’s hemp crops could be decreasing because of the COVID-19 pandemic. 

CFAP is a $19 billion dollar relief program. The notice in the federal register also includes comments from the USDA about why other crops were given access to CFAP aid and explanations for the recent changes to eligible items.