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Risk Management Considerations for the South Carolina Industrial Hemp Pilot Program

Dr. Nathan Smith

Summary

The 2014 Farm Bill allowed the production of industrial hemp as a pilot program in states that legalized the cultivation of Cannabis Stativa L. South Carolina passed legislation in 2017 that created a pilot program allowing 20 farmer permits in 2018 for industrial hemp. All of the growers that received permits chose to grow CBD flower in order to produce crude CBD oil. CBD, or cannabidiol, is taken from the seeds and flower of the hemp plant and processed into oil that consumers use as a supplement. Little to no information exists in scientific literature on the production of hemp since it has been a Schedule 1 narcotic and classified as federally illegal until 2019. Marketing risks plagued many growers throughout the season and continue to do so today. The largest issue faced was the lack of an organized, standardized market. Many growers faced the issue of an unestablished market, struggling to sell their finished crude CBD oil. Clemson Extension developed an education program on production and economics that was presented at five locations, across the state, in November 2017. A cost of production study with eleven farmers was conducted to address the number one question: what is the cost and return potential? The twenty permit holders were spread over fifteen counties, growing on a combined 400 acres, and faced many issues during the first year. This presentation/poster identifies the major risks faced by farmers in 2018 and shows the results of the cost study.

Details

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