[Senate Hearing 116-193]
[From the U.S. Government Publishing Office]


                                                      S. Hrg. 116-193

                          HEMP PRODUCTION AND
                           THE 2018 FARM BILL

=======================================================================

                                HEARING

                               BEFORE THE

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 25, 2019

                               __________

                       Printed for the use of the
           Committee on Agriculture, Nutrition, and Forestry
           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]          
           


       Available via the World Wide Web: http://www.govinfo.gov/
       
                               __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
39-843 PDF                  WASHINGTON : 2020                     
          
--------------------------------------------------------------------------------------
       
       
       
       
           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY


                     PAT ROBERTS, Kansas, Chairman
MITCH McCONNELL, Kentucky            DEBBIE STABENOW, Michigan
JOHN BOOZMAN, Arkansas               PATRICK J. LEAHY, Vermont
JOHN HOEVEN, North Dakota            SHERROD BROWN, Ohio
JONI ERNST, Iowa                     AMY KLOBUCHAR, Minnesota
CINDY HYDE-SMITH, Mississippi        MICHAEL BENNET, Colorado
MIKE BRAUN, Indiana                  KIRSTEN GILLIBRAND, New York
DAVID PERDUE, Georgia                ROBERT P. CASEY, Jr., Pennsylvania
CHARLES GRASSLEY, Iowa               TINA SMITH, Minnesota
JOHN THUNE, South Dakota             RICHARD DURBIN, Illinois
DEB FISCHER, Nebraska

             James A. Glueck, Jr., Majority Staff Director
                DaNita M. Murray, Majority Chief Counsel
                    Jessica L. Williams, Chief Clerk
               Joseph A. Shultz, Minority Staff Director
               Mary Beth Schultz, Minority Chief Counsel
                            
                            
                            C O N T E N T S

                              ----------                              

                        Thursday, July 25, 2019

                                                                   Page

Hearing:

Hemp Production and The 2018 Farm Bill...........................     1

                              ----------                              

                    STATEMENTS PRESENTED BY SENATORS

Roberts, Hon. Pat, U.S. Senator from the State of Kansas, 
  Chairman, Committee on Agriculture, Nutrition, and Forestry....     1
Stabenow, Hon. Debbie, U.S. Senator from the State of Michigan...     3
McConnell, Hon. Mitch, U.S. Senator from the State of Kentucky...     4

                                Panel I

Ibach, Hon. Greg, Under Secretary for Marketing and Regulatory 
  Programs, U.S. Department of Agriculture, Washington, DC.......     7
Vaden, Hon. Stephen Alexander, General Counsel, U.S. Department 
  of Agriculture, Washington, DC.................................     7
Dunn, Hon. Alexandra Dapolito, Assistant Administrator, Office of 
  Chemical Safety and Pollution Prevention, U.S. Environmental 
  Protection Agency, Washington, DC..............................     9
Abernethy, Amy P., M.D., Ph.D., Principal Deputy Commissioner of 
  Food and Drugs, Office of the Commissioner, U.S. Food And Drug 
  Administration, Silver Spring, MD..............................    10

                                Panel II

Furnish, Brian, Farmer, Cynthiana, KY............................    20
Stark, Erica, Executive Director, National Hemp Association, 
  Reading, PA....................................................    22
Seki, Hon. Darrell G. Sr., Tribal Chairman, Red Lake Band of 
  Chippewa Indians, Red Lake, MN.................................    24
                              ----------                              

                                APPENDIX

Prepared Statements:
    Ibach, Hon. Greg.............................................    36
    Dunn, Hon. Alexandra Dapolito................................    40
    Abernethy, Amy P., M.D., Ph.D................................    46
    Furnish, Brian...............................................    58
    Stark, Erica.................................................    61
    Seki, Hon. Darrell G. Sr.....................................    66

Document(s) Submitted for the Record:
Roberts, Hon. Pat:
    The Association of American Pesticide Control Officials, 
      Inc., prepared statement for the Record....................    76
    Drug Policy Alliance, prepared statement for the Record......    78

Question and Answer:
Ibach, Hon. Greg:
    Written response to questions from Hon. Pat Roberts..........    82
    Written response to questions from Hon. Debbie Stabenow......    83
    Written response to questions from Hon. Joni Ernst...........    83
    Written response to questions from Hon. David Perdue.........    85
    Written response to questions from Hon. Patrick J. Leahy.....    86
    Written response to questions from Hon. Amy Klobuchar........    87
    Written response to questions from Hon. Michael Bennet.......    88
Vaden, Hon. Stephen Alexander:
    Written response to questions from Hon. Pat Roberts..........    91
    Written response to questions from Hon. Debbie Stabenow......    92
    Written response to questions from Hon. Deb Fischer..........   100
Dunn, Hon. Alexandra Dapolito:
    Written response to questions from Hon. Debbie Stabenow......   101
    Written response to questions from Hon. David Perdue.........   101
    Written response to questions from Hon. Deb Fischer..........   102
    Written response to questions from Hon. Michael Bennet.......   103
Abernethy, Amy P., M.D., Ph.D.:
    Written response to questions from Hon. Debbie Stabenow......   105
    Written response to questions from Hon. John Hoeven..........   105
    Written response to questions from Hon. Joni Ernst...........   106
    Written response to questions from Hon. David Perdue.........   106
    Written response to questions from Hon. Charles Grassley.....   108
    Written response to questions from Hon. Deb Fischer..........   109
    Written response to questions from Hon. Patrick J. Leahy.....   110
    Written response to questions from Hon. Michael Bennet.......   111
Furnish, Brian:
    Written response to questions from Hon. Debbie Stabenow......   113
Stark, Erica:
    Written response to questions from Hon. Debbie Stabenow......   114
Seki, Hon. Darrell G. Sr.:
    Written response to questions from Hon. Amy Klobuchar........   118

 
                          HEMP PRODUCTION AND
                           THE 2018 FARM BILL

                              ----------                              


                        THURSDAY, JULY 25, 2019

                                       U.S. Senate,
         Committee on Agriculture, Nutrition, and Forestry,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:33 a.m., in 
room 328A, Russell Senate Office Building, Hon. Pat Roberts, 
Chairman of the Committee, presiding.
    Present or submitting a statement: Senators Roberts, 
McConnell, Boozman, Hoeven, Ernst, Hyde-Smith, Braun, Stabenow, 
Brown, Casey, and Smith.
    Chairman Roberts. Good morning. I call this meeting of the 
Senate Committee on Agriculture, Nutrition, and Forestry to 
order.
    Before beginning my remarks, both the Ranking Member and I 
received a letter regarding hemp production from the 
Association of American Pesticide Control Officials, Inc. and 
there is a separate letter from the Drug Policy Alliance 
regarding the hemp felon ban that I submit for the record 
today. Without objection.

    [The letters can be found on pages 76-79 in the appendix.]

 STATEMENT OF HON. PAT ROBERTS, U.S. SENATOR FROM THE STATE OF 
KANSAS, CHAIRMAN, U.S. COMMITTEE ON AGRICULTURE, NUTRITION, AND 
                            FORESTRY

    Chairman Roberts. Today's hearing on hemp production first 
convenes the three Federal agencies that directly regulate or 
affect hemp cultivation. USDA is preparing a rule on hemp as 
directed by the Farm Bill. FDA is faced with issues that are 
relevant to processor demand for this crop. EPA will play an 
integral role in how producers raise this crop through the 
choices available to them. This hearing is designed to provide 
a forum for the agencies to discuss the decisions they are 
facing as well as stakeholder perspectives regarding the USDA 
rule in development.
    On today's second panel, the Committee will hear from those 
on the ground as they provide insight from the producer, 
industry, and tribal regulatory perspectives.
    I have talked repeatedly about two themes here in the 
Committee, providing certainty and predictability for farmers. 
However, this developing industry has a great opportunity, but, 
to be truthful, also has much uncertainty and risk for farmers.
    Hemp was only recently removed from the Federal Controlled 
Substances Act. Because of its historical legal problems, hemp 
agronomics suffer from a relatively short history of data, 
research, and good farming practices compared to other new 
crops that we have seen ramp up toward more significant acreage 
in the past.
    Farmers bear significant risk regarding hemp production 
regardless of their operation's business model. A producer may 
share risk through a contract to grow hemp for a processor, 
with the processor providing an input, such as seed, though 
there have been instances where some growers may not have 
always received timely payment by a processor. A different 
farmer may grow hemp to sell either the fiber, grain, seed 
hemp, or flower on the open market.
    At present, there is not Federal multi-peril crop insurance 
available to generally cover lost production costs, and there 
is a need for production data to develop any revenue insurance 
policy.
    These are cautions regarding this new crop, but let me be 
clear, I am extremely supportive of new opportunities for 
farmers. Everybody here on this Committee, and especially the 
Leader, who has provided a lot of leadership in this regard, it 
is not often that an almost entirely new crop with this level 
of interest and market potential comes along. I am proud to say 
we even have new facilities now being built in Russell, Kansas.
    As we all know, times are tough. Our producers across the 
country have been experiencing increased costs and low 
commodity prices over the past several years. On top of that, 
many farmers dealt with Mother Nature's wrath this spring as 
flooding prevented many from getting a crop, or a quality crop, 
in the ground.
    These economic conditions drive further margin erosion and 
financial stress for many operations. However, producers and 
agricultural stakeholders continue to look for ways to adapt to 
the downturn in agricultural prices. Many are positioning 
themselves for longer-term opportunities that might warrant 
further investment or provide an additional profit opportunity.
    Today we are here to ask questions, learn from 
stakeholders, and better understand the multitude of issues 
surrounding hemp cultivation and this industry.
    I support the implementation of the 2018 Farm Bill in a 
farmer-friendly manner, and hemp is no exception. Needless to 
say, based upon my history with the Federal Fungicide, 
Insecticide, and Rodenticide Act, or FIFRA, I strongly support 
the development of the data and information needed to provide 
this crop with conventional crop protection tools.
    There are complex questions in this space. Is hemp the crop 
of a generation? What will this industry look like in 10 years? 
I do not know the answers to these questions, and I am not sure 
if anyone actually can answer them.
    However, witnesses testifying on both panels today have 
valuable insight to share. Facilitating the flow of accurate 
information regarding this new endeavor, especially as it 
relates to the pending decisions by the Federal agencies, will 
hopefully be of use to the agencies, the industry, and in the 
end, the farmers upon whom much of this success will be built.
    I now recognize my distinguished Ranking Member, Senator 
Stabenow.

STATEMENT OF HON. DEBBIE STABENOW, U.S. SENATOR FROM THE STATE 
                          OF MICHIGAN

    Senator Stabenow. Thank you, Mr. Chairman, welcome to all 
of our witnesses today. The 2018 Farm Bill includes many new 
opportunities to strengthen and diversify American agriculture. 
We know something about that in Michigan where we grow a wider 
variety of crops than any other State but one in the country.
    One of the most anticipated opportunities we included in 
the Farm Bill is the newly legalized production of hemp. This 
exciting new opportunity is actually part of a great American 
tradition. George Washington, John Adams, and Thomas Jefferson 
all grew hemp. Maybe Lin Manuel Miranda will make his next 
musical about that!
    Majority Leader McConnell. Henry Clay as well.
    Senator Stabenow. Henry Clay as well. Thank you, Mr. 
Leader.
    [Laughter.]
    During World War II, the USDA encouraged farmers to grow 
hemp in order to produce rope for the U.S. Navy. Michigan's own 
Henry Ford saw great potential in hemp and experimented with 
using it in biobased manufacturing. In fact, hemp used to be so 
prevalent in my State, they say you could see it growing on the 
side of the road while driving down I-94 in Southeast Michigan.
    This new old crop is creating exciting opportunities for 
farmers and the greater supply chain. Hemp products are already 
popular in the U.S. marketplace. Nationally it is estimated 
that U.S. hemp retail sales are at more than $700 million 
annually, and this market is expected to grow at a 10 to 20 
percent rate.
    According to the Michigan Department of Agriculture, more 
than 30,000 acres have been registered for hemp production. 
Over 700 growers and processors have received a license to 
produce hemp and derive products. Michigan farmers can 
cultivate hemp seeds to make new food products, with whole hemp 
seeds, seed protein, and hemp seed oil.
    Innovators are looking at ways to use industrial hemp in 
biobased manufacturing. There is exciting potential to create 
products like biodegradable water bottles, construction 
materials, clothing, and even cement to improve our roads.
    Because hemp is a new crop, more research is still needed 
to provide information to producers on the right soils and 
seeds, pest management techniques, and other best practices. In 
order to support growers and processors we need to conduct 
aggressive research.
    Just last week, this Committee discussed the concerning 
loss of researchers at the Department of Agriculture, driven by 
the relocation of two USDA research agencies. I mentioned that 
the USDA is losing irreplaceable expertise, including one of 
the top researcher's on hemp. Instead of throwing away 
knowledge, the Department should be doing everything it can to 
continue important work that will help our farmers succeed.
    In addition to research, farmers need access to adequate 
financing to cover the high cost of seeds and new equipment. It 
is also critical that entrepreneurs have capital to build the 
infrastructure needed to process hemp, which will create 
exciting new business opportunities in rural communities. We 
also need to ensure that these opportunities in hemp production 
are fair and equitable for all farmers. It is also critical 
there is fair testing and enforcement of regulations regarding 
harvesting hemp across the board.
    With any change there are always questions that need to be 
addressed. There are still many outstanding federal and local 
issues related to CBD oil, risk management tools, and testing 
methods for harvesting hemp crops.
    I look forward to hearing from the panel of experts that we 
have today who will speak to all of these issues and give us an 
opportunity to learn more about the implementation of these 
provisions.
    Mr. Chairman, I also have to apologize in advance. As you 
know, we have a markup going on in the Finance Committee. I 
have amendments I am offering. As I indicated to the witnesses, 
I apologize for moving back and forth. That is the reality of 
trying to be two places at once, which we are frequently 
challenged to do.
    So welcome again.
    Chairman Roberts. I recognize the dilemma we face with the 
hearings in the Finance Committee. I will be there on final 
passage. I was going to say I wish you luck on your amendments. 
I am not too sure that I want to say that.
    [Laughter.]
    Senator Stabenow. Can I count you as a yes, Mr. Chairman?
    Majority Leader McConnell. No, I do not think you do, do 
you?
    [Laughter.]
    Chairman Roberts. I have three but I have withdrawn them, 
so we can get this one on the road.
    I am very pleased and privileged to represent Leader 
McConnell, Senator Mitch McConnell. If it had not been for him 
I am not sure we would put the emphasis we did in the Farm 
Bill. It was through his suggestion and gentle nudging--not so 
gentle nudging--that we are on the road we are on. It has been 
a long time coming and the time is now. Leader McConnell, 
please.

STATEMENT OF HON. MITCH McCONNELL, U.S. SENATOR FROM THE STATE 
                          OF KENTUCKY

    Majority Leader McConnell. Thank you, Mr. Chairman. I want 
to thank you and Senator Stabenow for your willingness to be 
leaned on, not that you needed it. This was an extraordinary 
development that we are all excited about in last year's Farm 
Bill.
    Kentucky, I gather, like Michigan, has a long history with 
hemp. I am glad it is making a comeback and it has created 
incredible excitement all across my State.
    When we began the pilot programs as a result of language 
that I put in, thanks to you, Mr. Chairman, and others, back in 
2014--I believe you were Chairman then--we put in pilot 
projects in the 2014 Farm Bill. As we all know, and as the 
Chairman and Senator Stabenow pointed out, this product is 
incredible, from food to clothing to wellness products. What a 
diversified product.
    I am especially grateful to the two of you. It was fun 
being there with the President. A little awkward for the 
Senator from Michigan but she was there for the signing of the 
bill, I recall, wondering what she was doing. It was almost an 
out-of-body experience, I am sure. We were all there together, 
which underscored, I think, the bipartisan nature of the effort 
that went into putting together last year's Farm Bill, and it 
was exciting to see the President sign it.
    I had Secretary Perdue down, just a week or two ago, on a 
hemp-focused visit, and I think USDA is trying to be helpful in 
every way they can. The biggest thing they have to come up 
with, as I think all of us know, is crop insurance, which is 
not going to be there for the 2019 crop, but the Secretary has 
assured us all, and I have helped him do that, by writing it 
into one of the bills we recently passed, that at least the 
whole crop, crop insurance will be ready for next year. Getting 
crop insurance for a specific, hemp, is going to take more 
time, but whole-farm crop insurance will be available for hemp 
next year.
    All of the agencies are playing a vital role, and you are 
going to hear from them. EPA and FDA obviously have a role to 
play in all of this.
    I have got a constituent here today that I am awfully proud 
of, Brian Furnish. Brian is an eighth-generation farmer who is 
going to be on the second panel, from Cynthiana. When he 
purchased his first farm back in the late 1990's he turned to 
what had been our big cash crop, tobacco. Tobacco's history in 
Kentucky and across our country goes way back to the founding 
of our country. There are tobacco leaves at various places, 
painted in the Capitol. It was an integral part of the 
beginning of this country.
    To show you how pervasive tobacco was in our State, when I 
first came here, to the Senate, we grew at least some of it in 
119 of 120 counties. It was everywhere. Under the old quota 
system set up during the New Deal, they actually measured your 
historical production, assigned that quota to your farm, and it 
added value to your farm. I mean, you paid property taxes on 
it. The government had created the asset. It distributed the 
income into a lot of different hands and provided an awful lot 
of income for an awful lot of people for a very long time.
    What happened next to Brian is the same story that has been 
shared by thousands of farm families in Kentucky. Demand for 
tobacco started falling. Foreign competition grew. In 
collaboration with leading Kentuckians like Brian Furnish, who 
is here today, I introduced the tobacco buyout legislation in 
2004, to help free tobacco growers from the Depression-era 
quota system. Signed it into law in 2004, levied a fee on the 
producers, and we basically bought back the asset that the 
government had created back in the 1930's, compensated them for 
the asset that had been created by the government back in the 
1930's.
    That 10-year buyout ended in 2014, so that coincided with 
the 2014 Farm Bill, where we all worked together to put in 
pilot projects, in the hopes that maybe, just maybe, hemp could 
be a really big deal at some time in the future. Brian and 
dozens of other Kentucky farmers hit the ground running with 
the pilot program, just as the quota buyout over the 10-year 
period ended.
    The hemp legislation that I offered, and you all were happy 
to accept and participate in, could not have come at a better 
time. Brian has grown different strains of hemp, for fiber, for 
seed, for CBD. In addition to farming hemp he has also had 
experience processing the crop.
    He is not the only one benefiting from hemp's resurgence in 
my State. Right now, farmers in 101 of 120 counties, in just 
one year of legalization--or six months of legalization, 
actually--we are now growing it in 101 out of 120 counties. 
That is how fast it has gone in our State. We have more than 
200 processors operating in our State, and this has only been 
legal for six months.
    It was recently announced that around $100 million worth of 
Kentucky-grown and processed hemp products are expected to be 
sold this year alone. Look, I do not think any of us know if 
hemp will ever be as big in Kentucky as Burley tobacco, but 
with farmers like Brian leading the effort I am confident we 
have a bright future with this crop in our State.
    As the Committee reviews the implementation of the hemp 
initiative I can think of no better voice to hear from than 
Brian Furnish. I am pleased to welcome him. I want him to stand 
up. I think he has got his daughter with him. There you are, 
Brian. His daughter, Gracie. She is one of the National FAA 
officers last year and is currently attending University of 
Kentucky. She is following in her dad's footsteps and is a 
strong voice for Kentucky agriculture.
    I am thrilled that Brian and Gracie could be here today. I 
want to thank you, Mr. Chairman, and Senator Stabenow again for 
your consistent interest in this. I think this is a necessary 
hearing as we sort of deal with the last three things. If you 
look at this as a football, we are in the red zone. We are not 
quite in the end zone yet. We are in the red zone.
    There are three issues out there--the crop insurance issue, 
which we discussed; the people who are growing it this year are 
pioneers. They are out there without the insurance, taking a 
chance. FDA, you are going to hear from them, what kind of 
representation is going to be made that reassures the public 
and do not overState. We have some banking issues. I am not 
clear whether you are going to hear from them or not, but there 
have been some credit card issues. There are some EPA issues. 
You have got them on the schedule here today.
    I want to conclude by thanking you all for doing this. I 
think we are close to the end zone on this, and we are all 
hopeful it is going to be a really big deal in a whole lot of 
States, maybe even in Kansas, and we will see what the future 
holds.
    Thank you so much for the opportunity to be here, and good 
luck, Brian. These are really tough questioners. I am sure you 
are as nervous as you can possibly be.
    [Laughter.]
    Chairman Roberts. If we are in the red zone I am going to 
let you call some of the plays. You could just go up the middle 
but I do not think you are gaining that many yards. I think the 
end-around situation might work out pretty good. We will work 
on that.
    Our first witness is the Honorable Greg Ibach, Under 
Secretary for Marketing and Regulatory Programs, U.S. 
Department of Agriculture. Greg is USDA's Under Secretary for 
Marketing and Regulatory Programs. This includes the Animal and 
Plant Health Inspection Service and the Agriculture Marketing 
Service, the USDA agency responsible for administering the 
implementation of the hemp production provisions within the 
2018 Farm Bill. Greg, we welcome you back.
    Our next witness is the Honorable Stephen Vaden, General 
Counsel at the U.S. Department of Agriculture. Stephen is 
General Counsel to the U.S. Department of Agriculture where he 
provides legal advice and services across the Department and 
its agencies, including implementation of the hemp production 
provisions of the 2018 Farm Bill. Stephen, welcome back to you 
too.
    The Honorable Alexandra Dunn is here to represent the U.S. 
Environmental Protection Agency. Ms. Dunn currently serves as 
the Assistant Administrator for the Office of Chemical Safety 
and Pollution Prevention at the U.S. Environmental Protection 
Agency. In this capacity, she oversees the Office of Pesticide 
Programs, the Office of Pollution Prevention and Toxics, and 
the Office of Science Coordination and Policy. Our welcome to 
you, ma'am.
    Our last witness, at least on the first panel, is Dr. Amy 
Abernethy. She is the Principal Deputy Commissioner of Food and 
Drugs, U.S. Food and Drug Administration. Dr. Abernethy 
oversees the agency's day-to-day functioning and directs 
special and high-priority initiatives that cut across the 
offices overseeing the FDA's regulation of drugs, medical 
devices, tobacco, and food. To that point, she is Co-Chair of 
the FDA's internal CBD Policy Working Group. We welcome you, 
ma'am, as well.
    Greg, why don't you start this off?

  STATEMENT OF THE HONORABLE GREG IBACH, UNDER SECRETARY FOR 
     MARKETING AND REGULATORY PROGRAMS, U.S. DEPARTMENT OF 
                 AGRICULTURE, WASHINGTON, D.C.;

ACCOMPANIED BY THE HONORABLE STEPHEN ALEXANDER VADEN, GENERAL COUNSEL, 
            U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, DC
    Mr. Ibach. Thank you, Chairman Roberts, Ranking Member 
Stabenow. I appreciate this opportunity to appear before you 
today to discuss USDA's implementation of the hemp provisions 
contained in the 2018 Farm Bill. I am Greg Ibach, Under 
Secretary for USDA's Marketing and Regulatory Programs mission 
area, which includes the Ag Marketing Service, the agency that 
is charged with implementing the core hemp provisions of the 
bill. With me today is USDA General Counsel, Stephen Vaden. The 
Office of the General Counsel has been a valuable partner as we 
work toward implementation of the 1918 Farm Bill's hemp 
provisions.
    We know there is a lot of interest around the country in 
the economic potential for hemp production. I am sure you have 
heard from farmers in your districts about the importance of 
USDA issuing clear regulations and moving quickly to do so. 
With that in mind, I would like to provide you with a synopsis 
of USDA's hemp-related activities since enactment of the Farm 
Bill last December. I will also provide the Committee with the 
Department's plans, moving forward.
    As you know, the 2018 Farm Bill authorized the production 
of hemp and removed hemp and hemp seeds from the Drug 
Enforcement Administration's schedule of Controlled Substances. 
USDA is required to issue regulations and guidelines to 
implement a program for the commercial production of industrial 
hemp in the United States.
    The rulemaking will outline provisions for USDA to approve 
plans submitted by States and Indian tribes for the domestic 
production of hemp as set forth by the Farm Bill. It will also 
establish a Federal plan for producers in States or territories 
of Indian tribes that do not have their own USDA-approved plan.
    As outlined by the Farm Bill, the program includes 
provisions for maintaining information on the land where hemp 
is produced; testing THC levels; disposing of plants that are 
not in compliance with program requirements; licensing 
requirements; and ensuring compliance.
    For the 2019 planting season, the 2018 Farm Bill provides 
that States, tribes, and institutions of higher education can 
continue operating under the authorities of the 2014 Farm Bill, 
which permitted these entities to produce hemp under pilot 
programs for research purposes. These authorities will expire 
12 months after the effective date of the AMS rule.
    In addition to AMS, the Farm Service Agency, the Natural 
Resources Conservation Service, and the Risk Management Agency 
are also impacted by the 2018 Farm Bill's hemp provisions. I 
would refer you to my written statement for more details on 
their respective responsibilities.
    Following passage of the 2018 Farm Bill, AMS participated 
in hundreds of meetings and consultations with interested 
entities in Washington, DC. and across the country. These 
entities included States, Congress, tribes, other Federal 
agencies, private businesses, industry organization, and 
producers. In addition to these meetings, USDA has provided a 
number of information documents and engaged the public through 
information-gathering sessions.
    The following are a few highlights of these activities. On 
March 13th, USDA held a Farm Bill Hemp Listening Session to 
allow interested parties to share their perspectives and ideas 
on hemp production. This was a 3-hour webinar with 
approximately 2,100 participants. The webinar was recorded and 
is available on our website, along with comments that were 
submitted to AMS.
    On April 18th, a Notice to Trade was issued, which provided 
guidance to U.S. hemp producers and seed exporters seeking an 
avenue for hemp seed exports to the United States.
    In late May, the USDA's Office of General Counsel issued a 
legal analysis regarding the interState transportation of hemp 
and who may obtain a license to produce hemp.
    Last but certainly not least, an interim final rule to 
establish the domestic hemp production program is currently 
undergoing interagency review. We hope to finalize the rule 
this fall to accommodate the 2020 crop year. Once the rule is 
published and becomes effective, USDA will move quickly to 
fully establish the program. We are unable to comment on the 
specifics of the rule at this time as it is under interagency 
review, but we will be happy to provide more detailed 
information once it is published.
    As you can see, USDA is committed to a timely establishment 
of this program, and we look forward to your questions.

    [The prepared statement of Mr. Ibach can be found on page 
36 in the appendix.]

    Chairman Roberts. Our next witness to have a prepared 
statement is the Honorable Alexandra Dunn of the U.S. 
Environmental Protection Agency. Ms. Dunn, please proceed.

 STATEMENT OF THE HONORABLE ALEXANDRA DAPOLITO DUNN, ASSISTANT 
    ADMINISTRATOR, OFFICE OF CHEMICAL SAFETY AND POLLUTION 
 PREVENTION, U.S. ENVIRONMENTAL PROTECTION AGENCY, WASHINGTON, 
                               DC

    Ms. Dunn. Good morning Chairman Roberts.
    Chairman Roberts. Good morning.
    Ms. Dunn. Thank you for having me here today. I am 
Alexandra Dunn, Assistant Administrator of the Office of 
Chemical Safety and Pollution Prevention at the U.S. 
Environmental Protection Agency, and it is a privilege to 
discuss EPA's role in and our plans for regulating hemp, and 
being here with my colleagues, Dr. Abernathy, Under Secretary 
Ibach, and General Counsel Vaden.
    As hemp comes into its own as our Nation's newest cash 
crop, growers will need pesticides approved for use on hemp to 
ensure healthy and stable crops. EPA will play a role in 
helping hemp reach its full potential in three ways. First, EPA 
can authorize pesticides for use on hemp plants under FIFRA, 
the Federal Insecticide, Fungicide, and Rodenticide Act. 
Second, where hemp products are a food or animal feed, EPA will 
set tolerances or maximum pesticide residue limits, under the 
Food Quality Protection Act, or FQPA. Then third, EPA is 
coordinating with our Federal partners, State agencies, and 
others on hemp policy issues.
    EPA has a long history of ensuring that pesticides used on 
U.S. crops are applied safely. EPA approves new pesticide uses 
in a timely fashion under the Pesticide Registration 
Improvement Act, or PRIA, so that the most cutting-edge and 
precise pesticides enter the marketplace and are available to 
growers, and we thank you, Senator, and the Committee, for your 
excellent work on PRIA's recent reauthorization.
    I am pleased to tell you that EPA is committed to assisting 
hemp producers obtain the pest management tools they need to 
help them transition to commercial production of this crop. 
EPA's effective and long-standing methods for working with 
industry, grower groups, States, and other partners will ensure 
that producer requirements for pest management and 
environmental and public health protection can all be met and 
achieved.
    First, as you know, for a crop to be sold the United States 
EPA must approve a pesticide use on that crop and associated 
pesticide labeling under FIFRA. EPA anticipates an increase in 
pesticide registrant interest in gaining approval to use 
pesticides on hemp under FIFRA, particularly thanks to the 2018 
Farm Bill and the strong economic forecast for hemp production. 
In fact, since May 2019, EPA has received 10 requests to 
include hemp on existing pesticide labels. We already have an 
approach for reviewing these requests and are engaging the 
public in our process.
    The pending requests notably involve biological and 
microbial chemicals, which tend to have very low environmental 
impact and can be approved on an expeditious basis, consistent 
with our authorities, and EPA completing review of these 
requests will be the first of many actions I anticipate we will 
take to support growers in the new hemp industry.
    Second, as mentioned, where hemp products are a food or 
animal feed, EPA will set tolerances or maximum pesticide 
residue limits under the FQPA. Notably, the biological and 
microbial chemicals that I mentioned earlier are exempt from 
the tolerance requirements, which makes them very available 
today. We look forward to working with our colleagues in the 
Food and Drug Administration on other tolerance-related issues. 
Our decisions are inter-related.
    Third, coordination on hemp policy between Federal 
partners, States, growers, and other stakeholders is essential 
to our work. We are engaging with the Department of 
Agricultural, with FDA, and the Department of Justice, and our 
shared goal is, of course, to provide coordinated information 
and regulatory certainty. We are working also with our States 
as they have a co-regulatory role in administering and 
enforcing FIFRA.
    In conclusion, over time EPA has proven to be a nimble and 
adaptive regulator, such that innovation in the pesticide 
marketplace is advanced while public health and the environment 
are protected, and we stand ready to ensure that EPA takes the 
pesticide registration actions and sets tolerances necessary so 
that hemp and hemp products can effectively and safely enter 
the marketplace.
    I appreciate very much the opportunity to testify today and 
I would be happy to answer any questions. Thank you.

    [The prepared statement of Mr. Dunn can be found on page 40 
in the appendix.]

    Chairman Roberts. I thank you very much for an excellent 
statement, more especially one of the first from any Federal 
agency to finish 30 seconds under the time limit.
    [Laughter.]
    Chairman Roberts. Dr. Abernethy. That does not mean that I 
am trying to restrict you, ma'am.
    Dr. Abernethy. I thought you were handing it over.

   STATEMENT OF AMY P. ABERNETHY, MD, PhD, PRINCIPAL DEPUTY 
  COMMISSIONER OF FOOD AND DRUGS, OFFICE OF THE COMMISSIONER, 
      U.S. FOOD AND DRUG ADMINISTRATION, SILVER SPRING, MD

    Dr. Abernethy. Good morning, Chairman Roberts and members 
of the Committee. I am Dr. Amy Abernethy, Principal Deputy 
Commissioner of the Food and Drug Administration. Thank you for 
the opportunity to appear before you today to discuss the FDA's 
role in the regulation of hemp products. I am pleased to join 
my colleagues from the USDA and EPA to work together to ensure 
coordination across the Federal Government.
    FDA is committed to advancing its regulation of hemp 
products through an approach that, in line with our mission, 
prioritizes public health, fosters innovation, and promotes 
consumer confidence. As a physician, I reflect that patients 
and consumers trust that the FDA will prioritize their health 
and protect public safety.
    As this Committee knows, the 2018 Farm Bill unleashed a 
wave of interest and innovation in hemp agriculture. The Farm 
Bill removed hemp from the definition of marijuana in the 
Controlled Substances Act and the Farm Bill explicitly 
preserved FDA's authorities over hemp products.
    Hemp-derived products subject to the FDA's jurisdiction are 
regulated like any other products, enhancing consumer 
confidence in this growing hemp market. Hemp products that fall 
within FDA's responsibilities include food products like hulled 
hemp seeds, and also products that are extracted from hemp 
derivatives, like cannabidiol, such as foods, drugs, and 
cosmetics.
    There is much interest in cannabidiol, otherwise known as 
CBD. FDA first approved a CBD drug product last year for the 
treatment of seizures associated with two rare and severe 
pediatric diseases, a significant milestone for these children 
and their families. In line with the Food, Drug, and Cosmetic 
Act, CBD is available to be marketed as this approved drug.
    Meanwhile, there has been an explosion of CBD-based 
products like lotions, gummies, and chocolates. Providing 
clarity on the regulatory status of CBD products is an FDA 
priority. However, under the Food, Drug, and Cosmetic Act, 
adding CBD to food or marketing a CBD product as a dietary 
supplement is generally prohibited unless the agency makes an 
exception through rulemaking. The same rules applies to most 
active drug ingredients. It is common sense. We generally do 
not want drugs to be added to food.
    FDA is a science-based agency. Americans expect the 
decisions made by FDA are informed by the best available 
information about safety, and CBD is no exception.
    What data do we have? Through the approval of the CBD drug, 
Epidiolex, which was based on adequate and well-controlled 
clinical studies, FDA learned that CBD is not a risk-free 
substance. CBD can harm the liver, create a sense of 
exhaustion, and affect your appetite. When the medical provider 
prescribes an FDA-approved CBD drug product, the patient can be 
guided and monitored by the provider.
    What about situations where CBD is in your morning cereal, 
you consume a CBD lozenge, or you apply CBD skin cream? What if 
you take these every day together, for months or for years? 
What is the risk if you are pregnant, breastfeeding, a child, 
elderly, taking other medicines, or suffering a major illness? 
What about pets and food-producing animals?
    Prior to the Farm Bill, cannabis-derived CBD was a 
controlled substance which meant that research with CBD was 
very restricted. To our knowledge, the studies just have not 
been done. In sum, we lack the information for science-based 
decisionmaking about CBD.
    What is the FDA doing to address this situation? First, we 
are moving as quickly as possible to learn what is known and 
develop a work plan to fill in the gaps. We have formed a 
working group, which I co-chair, to expedite FDA's work. We are 
reviewing the published medical literature, all data bases 
available to us, and any available information from industry 
sponsors.
    On May 31st, we held a full-day hearing with over 100 
speakers and 2,000 participants. A public docket just closed on 
July 16th, and we received 4,492 comments. We are meeting with 
our Federal partners, State governments, trade organizations, 
patient groups, and others. Throughout, we have asked for any 
available data that is already available---please send it to 
us--and we have committed to providing an update on our work by 
early fall.
    Second, we are providing regulatory clarity whenever 
possible. FDA already provided clarity that certain hemp 
products--hulled hemp seed, hemp seed protein powder, and hemp 
seed oil--can be legally used in human foods. Similarly, the 
regulatory pathway for new CBD-based drugs is clear and we 
understand clinical studies are ongoing. Meanwhile, our working 
group is actively reviewing all potential regulatory pathways 
in order to determine the appropriate approach to CBD for other 
types of products that we regulate, like foods, dietary 
supplements, animal feeds, and cosmetics.
    Third, we are taking appropriate steps to protect American 
patients and consumers. We have issued warning letters to 
companies marketing CBD with therapeutic claims like treating 
cancer, Alzheimer's, and opioid withdrawal.
    Finally, we are working together with our Federal partners 
and State partners and communicating with the public. I cannot 
emphasize enough how important this is. This is what Americans 
expect of us, this is what the Committee expects of us, and 
this is what we, as FDA, expect of ourselves.
    Thank you, and I invite your questions.

    [The prepared statement of Dr. Abernethy can be found on 
page 46 in the appendix.]

    Chairman Roberts. Well, thank you. Thank you, Doctor, for 
an excellent statement.
    Mr. Vaden, I am not a scientist but it is my understanding 
that testing results for total THC, similar to other tests on 
agriculture products such as feed, have analytical variances, 
and they are due to random sampling error. Such variances mean 
that a hemp plant could be a 0.3 percent in actuality and 
measure 0.21 percent, or even 0.39 percent at a different 
credible lab.
    In your opinion, as the General Counsel, would the USDA be 
legally required to implement any testing regime in the 
upcoming regulation to a strict 0.3 percent with no variations? 
To be clear, I understand that this is a legal opinion and 
there may be other policy considerations, about which I am not 
asking the Office of General Counsel for its opinion.
    Mr. Vaden. Well, thank you, Mr. Chairman. As Supreme Court 
Justice Oliver Wendell Holmes observed, ``The life of the law 
has not been one of logic; it has been one of experience.'' 
Thankfully, Congress gave USDA the tools it needs to draw from 
the experience of the States who have been participating in the 
2014 Farm Bill pilot program on hemp in order to understand the 
best testing methodologies that are available, what their 
limitations are, and to factor that in with the discretion 
given to the agency to set up a testing program in order to 
ensure that the program that we put forward is farmer-friendly 
and does not unwittingly trap farmers who are doing their level 
best to abide by the 0.3 limit that Congress set in the 
statute.
    Chairman Roberts. Mr. Vaden, this is a new and exciting 
crop. Thank you for that comment, and I underline the farmer-
friendly emphasis that you put on that. I commend the RMA and 
Leader McConnell for all of their efforts to provide 
responsible risk management tools for hemp producers.
    As we all know, good farming practices and actuarial 
soundness are pillars of the Federal Crop Insurance program. My 
question is, how will RMA develop or evaluate multi-peril 
policies that include practice standards for this new crop? How 
will RMA develop or evaluate revenue policies that are based 
upon crop yield and price data?
    Mr. Vaden. Well, Senator, RMA will continue as it always 
has, in a way that, first and foremost, maintains program 
integrity. RMA will work with stakeholders to ensure that it 
has sufficient data to have an actuarially sound product. This 
includes stakeholders such as State Departments of Agriculture, 
industry, and the Agriculture Marketing Service, among others, 
as well as our States, and, of course, producers.
    Furthermore, as was announced by Under Secretary Ibach in 
his opening remarks, hemp will be covered under a pilot program 
whole-farm revenue policy for the coming crop year in 2020. As 
a pilot, under the law, RMA can assess the program and make 
changes as needed to maintain program integrity, while also 
providing a product that is useful for hemp producers.
    One final note that I will add, we take note of the fact 
that Congress put, in the 2018 Farm Bill, a non-discrimination 
provision, when it comes to hemp. What that means with regard 
to RMA is that should any private producer wish to have a 
policy focused on hemp, be evaluated by the Federal Crop 
Insurance Committee, it will be treated just as any other 
policy is that goes through that same process and will suffer 
no additional hurdles or detriments because it is for hemp.
    Chairman Roberts. I thank you for that statement.
    Greg, Mr. Under Secretary, thank you for all of your 
efforts over the past seven months regarding the implementation 
of the 2018 Farm Bill. Not an easy task. I greatly appreciate 
it, the members of this Committee appreciate it, and I know it 
requires tremendous staff effort.
    I have asked other colleagues of yours at the Department a 
similar question regarding the bill as you make decisions in 
rulemaking. Will you commit to me and this Committee that the 
hemp authority within your mission area is going to be 
implemented in a farmer-friendly manner?
    Mr. Ibach. As you are aware, Chairman Roberts, Secretary 
Perdue has charged the entire USDA team to be the most 
efficient, effective, and customer-focused agency in the 
Federal Government. Farmers, as well as processors, are part of 
our customers in this hemp production world that we are living 
in now. It is very much in our interest, and that is why we are 
working very closely with States to understand the experiences 
they have to be able to design programs that they know work for 
their farmers so that we can design a hemp program at USDA that 
will also be farmer-friendly.
    Yes, I do pledge to you that we will have a farmer-friendly 
program as best we can.
    Chairman Roberts. I appreciate that very much.
    Administrator Dunn, reflecting the letter that I submitted 
in the hearing record, the Inter-Regional Research Project, or 
the IR-4 program, is intended to facilitate the development of 
conventional pesticides for minor use crops. When will EPA 
develop their research protocol for hemp and when will these 
guideline documents be updated?
    Ms. Dunn. Thank you for that question, Senator. EPA and IR-
4 are working together now to identify the information that we 
need to support tolerance petitions for conventional pesticides 
that would be used on hemp. Coincidentally, a technical meeting 
on this topic between my staff and IR-4 will be held later 
today, and it was scheduled prior to this hearing.
    We have some additional, more extended discussions coming 
up later this summer, and we believe that these continued 
discussions will result in a viable proposal from IR-4 about 
the technical details needed for field trials for sampling hemp 
plants. I think we are in a very good position to move forward 
with IR-4.
    Chairman Roberts. I thank you for that and I wish you the 
very best.
    Dr. Abernethy, there are significant questions that I have 
regarding the issues you have outlined in front of the FDA at 
this time. I promised Chairman Alexander that I would stay in 
my lane, or our lane, during this hearing. Instead, I will 
address those issues whenever appropriate on the HELP 
Committee. I am on that Committee as well.
    However, I am wondering about the need for data regarding 
approval for hemp as animal feed. Does this data and needed 
information exist?
    Dr. Abernethy. Thank you. Indeed, we do need data around 
animal feed. Importantly, now that hemp has been removed from 
the Controlled Substances Act we will have the ability to study 
cannabidiol and hemp better and understand the impact on 
animals.
    With respect to animals and animal feed, we need to 
understand that the impact of hemp and cannabidiol on animals, 
on food-producing animals that ultimately have an impact on 
human health, and then also given the fact that animals 
typically eat the same feed every single day, the issue of 
continuous exposure and potentially accumulation, so there is a 
safety question there as well.
    Critically, we understand, as FDA, that we need to get the 
data but we need to be very focused in the data that is 
ultimately sought after, so that we do not unduly take extra 
time or extra resources to get to the answers that American 
farmers and American public needs.
    Chairman Roberts. I appreciate that.
    Senator Smith?
    Senator Smith. Thank you very much, Chair Roberts, and 
welcome to all of you, to this Committee today. I am so happy 
to have this conversation.
    You know, just earlier this week the Banking Committee, 
where I serve, talked about the banking challenges facing the 
cannabis industry, and I am also a member of that committee so 
I raised an issue that has--I have been hearing a lot about 
from Minnesota farmers. They have told me that it is tough to 
get loans, or even access to payment processing for hemp 
because farmers have not received the guidance that they need 
from the USDA. I am really happy to see representatives from 
all of your agencies on this panel--USDA, EPA, and also FDA.
    In order to, as Chair Roberts says, have a farmer-friendly 
process here and to be able to support farmers and not hinder 
them as they want to start growing hemp, it is going to take 
cooperation across the Federal Government--DEA, Department of 
Transportation, DOI, the Small Business Administration, 
Treasury, banking regulators. All these Federal agencies need 
to be aware of the regulation that USDA is making, as well as 
the research that comes out of the Agricultural Research 
Service.
    My question to all of you is this. When it comes to hemp, 
is there a formal dialog that is taking place across all of the 
Federal agencies, and how are you collaborating exactly when it 
comes to supporting our farmers on this issue?
    Mr. Ibach. I might offer my thoughts first, and then 
everybody else can offer theirs as well.
    Part of the interagency review process that we are going 
through right now with the interim final rule at OMB is 
allowing for that discussion process to begin. It gives all 
those Federal agencies the opportunity to look at the proposed 
interim final rule that USDA has put forth. It allows the 
opportunity to open a dialog that goes into many of these 
subject areas, and they can explore some of questions about how 
their program might be affected by our rule, and then we can 
have that discussion to be able to put forward an interim final 
rule that not only works for farmers and ranchers but also can 
work between the interagency cooperation that needs to take 
place as well.
    Senator Smith. Very good. Thank you. Mr. Vaden?
    Mr. Vaden. I would add another important partner, who is 
not here today but nonetheless is very important to this 
effort, particularly because Congress required us to coordinate 
with it, and that is the Department of Justice.
    Senator Smith. Mm-hmm.
    Mr. Vaden. We have been engaging in the statutorily 
required consultation with the Department of Justice at every 
level. I have been participating in those conversations, as 
well as other colleagues from the Office of General Counsel, 
individuals from the Agriculture Marketing Service, and that is 
critical so that law enforcement (a) can be assured that we are 
running this program as Congress expects us to, in a forthright 
and legal manner, and also so that law enforcement can have 
access to the information that Congress has asked us to 
provide, so that they can be assured that the farmer, the field 
of hemp that was mentioned earlier, that you drive by on the 
highway, is actually hemp, by checking with a data base that we 
will be required to maintain in coordination with the 
Department of Justice.
    Finally, I would note that they are providing input into 
the testing as well, as they have a very important legal role 
to play should someone wantonly break that 0.3 limit.
    Senator Smith. Thank you.
    Ms. Dunn. Thank you, Senator, for your question. With 
regard to the EPA, we are also engaged with our colleagues. 
Particularly, we have a unique dialog with the FDA. We have to 
work with the FDA on jurisdictional issues associated with CBD 
products in food. When it comes to food safety, EPA will be 
working with our Federal partners to ensure that the food 
supply is safe, and we will work with FDA as they look at CBD, 
to inform our work. Then we are not waiting on another Federal 
agency necessarily but we are actively working together.
    Senator Smith. Thank you.
    Dr. Abernethy. Thank you very much, Senator. In addition to 
what we have just said, ultimately, in my opening statement, as 
I highlighted, we see this as a critical issue, is working 
across government to start to solve the question of appropriate 
regulations around hemp and provide regulatory clarity so that 
ultimately are able to provide farmers the predictability that 
they need.
    A few details about that from the perspective of the FDA--
we are certainly working together with EPA, as you have just 
heard from Alexandra Dunn. We also work together in 
accelerating pace with USDA, and we have multiple interactions 
at all levels of FDA. We also are working together with States, 
and we had State governments represented in our full-day 
meeting on May 31st. There was a specific section where we 
heard what the State government needs were and we are 
considering about how do we make sure we accelerate the pace of 
our communication. We see that this is a critical issue across 
all this work.
    Senator Smith. I appreciate very much you devoting time to 
this, because I think sometimes Minnesota farmers feel a little 
bit like they are caught between a rock and a hard place, and 
they are feeling a real urgency to move forward, because given 
the current State of the farm economy in Minnesota and around 
the country, with, you know, trade disputes, low prices, and 
terrible weather, they are ready for--they are looking for new 
opportunities. There is a lot of urgency on their part. I am 
sure that you appreciate this. Your cross-agency collaboration 
is just really important.
    Let me just ask one last question to Under Secretary Ibach 
and Mr. Vaden. Once the rules and regulations are out around--
this is a question around the right hemp seeds to use--once 
those rules and regulations are out, how long will it take the 
ARS to set up a hemp research program, do you think?
    Mr. Ibach. Actually prior to 2018, with hemp being a 
controlled Schedule 1 drug, ARS has engaged in very little 
research at this point. ARS has now started to take steps to 
get a research beginning on hemp. ARS has authorized the 
Geneva, New York, laboratory location to devote funds to 
establishing an infrastructure to support studies done in 
conjunction with Cornell University.
    This research will take a look at destructive diseases, 
pests, weather extremes as they relate to hemp production. ARS 
is also exploring options to expand this research in 
conjunction with the 1914 Farm Bill is awaiting the AMS rule to 
guide development of additional projects.
    In addition to what ARS is doing, there are a number of 
State universities that have participated in the 2014 Farm Bill 
research opportunities, and we look forward to being able to 
gather those different research projects and see what type of 
applications they have. You know, because there are many 
different growing environments across the United States, some 
of those research projects are going to be very specific to 
those States and their individual growing regions, but some of 
them may have some great application across the entire United 
States.
    Senator Smith. Great. Thank you very much. Thank you, Mr. 
Chair.
    Chairman Roberts. Senator Braun.
    Senator Braun. Thank you, Mr. Chair. I agree with Senator 
Smith. There could not be a better time for farmers, in 
general, as actively involved in farming as I can be and still 
doing this job. We need to find new markets, new things to 
compete with, I think, soybean and corn usage.
    Can you give me an idea, Mr. Ibach, how big the hemp market 
is? I think from my information more than 30 countries produce 
hemp. It has got 22,000 different uses, from textile shoes, 
food, paper, rope, bioplastics, biofuel. Just generally 
speaking, how does this compare to soybeans and corn, in terms 
of the potential market out there, so farmers can actually have 
something that they could scale into something as big as their 
corn and soybean enterprises?
    Mr. Ibach. Well, in terms of excitement there is probably 
more around the hemp industry right now than there is corn and 
soybeans, but maybe just to share a little bit of data from 
2018. Forty-one States have passed legislation and hemp is 
being grown in 23 of those in the 2018 crop year. There were 
3,546 State licenses issued and hemp was growing on about 
78,000 acres. Again, that pales in comparison to corn and 
soybean numbers. Some States have quite a bit of acreage 
dedicated to that. Montana and Colorado have over 20,000 across 
in each of those States, so that shows that there are a number 
of producers that embraced it there.
    I think one of the concerns that we have at USDA is with 
the excitement and number of acres that are moving to hemp 
production and will be planted to hemp in the 2019 crop year, 
that we want to make sure that producers are aware and have an 
outlet for their product--some place to sell it. We have 
encouraged producers all this spring to look for a partner, 
look for a customer, encouraged them to engage in a contract 
before producing hemp.
    One of our big concerns is that production and consumption 
or processing will not align with each other, and so that is 
one caution that we have made to farmers as we have moved 
forward with our rule.
    Senator Braun. Is there a rough, globally, soybeans, corn, 
hemp--can you give me any indication of what that would be, 
say, split percentage-wise?
    Mr. Ibach. I would not be able to.
    Senator Braun. It would be interesting to know that, 
because I think that would be helpful for farmers. Then when 
you talk about lining up production with customers, what does 
it look like currently in the U.S.? I cannot imagine many 
processors have been gung ho, due to the economy of scale.
    Will you potentially have to export your product to a 
processor in another country? Do you think that is--you know, 
because a lot of infrastructure looks like it would have to get 
put in place before you can actually start to scale hemp 
production.
    Mr. Ibach. Maybe in the first part of your question, there 
has been more interest in processing facilities that have 
focused on CBD, and so we see more of that in States across the 
United States. The fiber part of it has been slower to develop 
a processing industry, so for those producers that are 
interested in fiber production there is probably less 
alternatives right now in the processing.
    The export opportunities also have some concerns surround 
them, as to whether or not there are international treaties 
that may come into play, as exports that would hinder the 
exportability of hemp products for processing. You know, we 
will need to work with USTR, the State Department, as well, to 
help producers understand what kind of restrictions might be in 
place on the export side of things.
    Senator Braun. Then currently, if somebody was looking at 
it for the fiber component, which looks like it is many of 
those 22,000 different uses, can you import hemp, since it 
could not be legally produced here until just recently? Or was 
it something where since you could not source it domestically 
that we basically have no industry in place?
    Mr. Ibach. I think that the industry for fiber usage, there 
has been a lot of pilot projects, a lot of little research 
projects that have gone on, in universities across the United 
States that have identified some possible uses. I also know 
that in some States they have a more vigorous developing 
industry, some research parks and industrial parks that are 
focusing on hemp and hemp processing, especially on the fiber 
side, but very much developing.
    I think the imports of hemp into the United States, we made 
provisions earlier this year to be able to bring seed in. APHIS 
put forward the regulatory process to be able to bring seed in 
from other countries. I do not think there is much attention 
been given to fiber.
    Senator Braun. One final question. Is there any data on 
what the profit per acre would be from hemp versus soybeans or 
corn?
    Mr. Ibach. I think that is very variable, depending on 
whether the hemp is for seed, for flour and food use, whether 
it is for CBD oil, or whether it would be for fiber. One of the 
reasons why--and as far as being able to track the market value 
of those crops, we really do not have good information there 
either. That is one of the reasons why, for the whole-farm crop 
insurance, RMA has put the requirement that producers have a 
contract, so it would indicate to us the value of their crop.
    Senator Braun. Thank you.
    Chairman Roberts. Well, thank you to the first panel. I 
appreciate your testimony. Very good testimony. Thank you.
    I would like to welcome our second panel of witnesses 
before the Committee.
    [Pause.]
    Chairman Roberts. Our first witness on the second panel is 
Mr. Brian Furnish. Leader McConnell was planning to introduce 
Mr. Furnish and did, and did so very well. He is here with his 
daughter, Cindy, right?
    Mr. Furnish. Gracie.
    Chairman Roberts. Gracie. Sorry to call you Cindy, Gracie.
    I think it bears repeating. He is an eighth-generation 
farmer from Cynthiana, Kentucky. Who was Cynthia?
    Mr. Furnish. Colonel Harrison in the Civil War had two 
daughters, one named Cynthia and one named Anna, so they named 
the county Harrison and the city Cynthiana.
    Chairman Roberts. Well, there you go. I had to ask.
    Brian grows hemp, tobacco, corn, and raises beef cows, 
founder of GEN 8 FARMS, LLC, former president and board member 
of the United States Hemp Roundtable. He is accompanied by his 
daughter, Gracie. Welcome.
    Then our next panelist is Mrs. Erica Stark, the Executive 
Director of the National Hemp Association, from Reading, 
Pennsylvania. Mrs. Stark is the Executive Director of the 
National Hemp Association, which represents farmers as well as 
processors, manufacturers in the hemp industry. Mrs. Stark was 
also involved with the industrial hemp program in Pennsylvania 
and has helped farmers manage help permits grown there since 
2017. She is accompanied by the association's board chairman, 
Geoff Whaling, and her husband, Les Stark. We welcome you, and 
I turn now to Senator Smith to introduce her next witness.
    Senator Smith. Thank you very much, Mr. Chair. It is my 
honor to introduce Chair Darrell Seki of the Red Lake Nation, 
and welcome, my friend, to Washington. Chair Seki was raised by 
his grandparents. He was born in Red Lake, Minnesota, and has 
spent the majority of his life in the village of Ponemah on the 
Red Lake Nation.
    Chair Seki is a proud veteran, having served in the Vietnam 
era. Chair Seki has served the Red Lake Nation in various 
capacities over 40 years, and is one of the longest-serving 
members of the Department of the Interior Tribal Budget 
Council, having represented the Midwest Region for 16 years.
    Chair Seki has been a leader in the Native Farm Bill 
Coalition, which influenced many of the provisions in the Farm 
Bill last year that helped Native farmers. Red Lake Nation has, 
for many years, operated the Red Lake Tribal Farms and the Red 
Lake Nation Foods. The Red Lake Nation has actively marketed 
Native food products, like wild rice, in national and 
international markets.
    Chair Seki was elected Council Treasurer in 2002, and 
served in that position until his election to Chairman in 2014, 
and he was re-elected in 2018.
    I want to just also note, Mr. Chair, that the 23d annual 
Anishinaabe Spirit Run starts next week, and the Spirit Run is 
an intertribal community event co-sponsored by Red Lake. This 
is a 200-mile relay in northern Minnesota that travels through 
three Tribal Nations and promotes wellness and balance in mind, 
body, and spirit.
    I am very happy to welcome Chair Seki to this Committee 
this morning.
    Chairman Roberts. We thank you, Senator Smith.
    Brian, why don't you start off.

    STATEMENT OF BRIAN FURNISH, FARMER, CYNTHIANA, KENTUCKY

    Mr. Furnish. Thank you, Chairman Roberts and members of the 
Committee. I appreciate you having me here for this important 
testimony and important crop that is affecting Kentucky farmers 
and many farmers throughout the Nation.
    My name is Brian Furnish, and I am an eighth-generation 
tobacco farmer. In the past seven years I have helped change 
hemp laws in Kentucky and in Washington. I was the first 
licensed hemp grower in the United States since World War II. I 
was with you when Mr. President signed the 2018 Farm Bill in 
the White House.
    I first started working with the political process with 
Senator Mitch McConnell back in 1999, when we first worked on 
the Tobacco Buyout that was finally accomplished in 2004. I was 
General Manager of the Burley Tobacco Growers Co-op in 
Lexington, Kentucky, and traveled to over 70 countries selling 
tobacco, and I realized that American tobacco farmers needed an 
alternative crop to tobacco.
    Congressman Jamie Comer, who was than the Commissioner of 
Agriculture in Kentucky, asked me to help make this crop legal 
in 2012. That is when I started to work with Senator McConnell 
and you all, to make hemp legal in the US.
    The 2014 Farm Bill made hemp legal in States that had a law 
that allowed research with the universities. At that time, I 
received the first grower license under the 2014 Farm Bill. I 
then proceeded to try to find a partner in the hemp business. I 
found an Australian man that was growing and researching hemp 
in Australia for 18 years. Now that company has a worldwide 
presence and a market cap of over $1 billion on the Stock 
Exchange in Australia, and they were just listed the first of 
April.
    I was the first citizen chairman of the Kentucky Hemp 
Commission and a founder and first president of the U.S. Hemp 
Roundtable, the industry-leading national business advocacy 
organization that now has 80 members and serves as a leading 
advocate in the industry effort to make hemp legal.
    My brothers and I have grown all three types of hemp, for 
seed, for fiber, and for CBD production. Each of these hemp 
categories uses a different genetic and growing method and 
different planting times throughout the season.
    For the fiber, we plant about 50 pounds of seed per acre we 
want to grow hemp as tall as we possibly can. My first hemp 
crop got to over 23 feet tall, and I yielded 4 tons per acre. 
The average value of a ton of hemp fiber at this time is $185 a 
ton.
    For seed, we plant approximately 30 pounds per acre, hoping 
to get a yield of 800 to 1,000 pounds per acre, and currently 
we sell that for $0.85 per pound.
    For CBD production and full-spectrum hemp oil production, 
we set about 3,200 plants per acre and we plant it the same way 
we have always planted tobacco, for eight generations--one 
small plant at a time with manual labor. We harvest the CBD by 
only using the flower buds and leaves. You want the short hemp 
for CBD because it is harvested by hand or special machines 
like tobacco, and it is very labor intensive, so we do not want 
that plant very tall.
    For the seed plants, we want those plants to be between 4 
and 5 feet tall so we can combine them with a regular combine 
and a Draper head on the front of a combine.
    The new hemp industry needs a lot of genetic research to 
make each of these uses profitable. As with most plants, the 
latitude must be consistent to get consistent production. In 
Kentucky, we learned early on that Canadian seed varieties do 
not do very well in Kentucky. Our day and nights are too 
different from theirs and so we have to find genetics for the 
right latitude, and normally bringing southern genetics north 
works much better than taking northern genetics south.
    Hemp seed for feminized seed needs certain periods of light 
and dark, so we need dark rooms for our genetic grow rooms for 
creating feminized seed for full-spectrum and CBD production, 
not green houses because they offer too much light at the wrong 
time of the year.
    We have learned a lot over the past five years about the 
hemp industry and it has a long way to go before it is 
mainstream production agriculture. Having a certified seed 
program for hemp would be a huge benefit to hemp farmers, and I 
discussed this yesterday with members of the USDA staff, of how 
critical it is for farmers to have access to certified seed.
    Now that hemp is legal we need to take a close look and 
remove, one by one, the barriers to success so that hemp can be 
on the same production playing field as all the other crops. 
Most folks in the government, and even in production 
agriculture, probably do not know or realize that hemp has no 
legal pesticide or herbicide or fungicide. A grower can lose 
its entire crop to weeds or pests.
    Without an approved herbicide or pesticide we may have to 
pay a labor bill of $500 to $2,500 an acre just to get the 
weeds out of our hemp crop to make sure that it is still a pure 
crop when we harvest it. We need your help to encourage EPA and 
USDA to make those approvals happen as soon as possible.
    Hemp growers have no USDA RMA crop insurance at this time. 
While I know and am part of the U.S. Hemp Farming Alliance, a 
group involved in the efforts to make that happen, we need to 
keep the pressure on for the creation of those necessary risk 
management tools, and make them readily available to farmers as 
soon as possible.
    Also, without hemp processors knowing if FDA will make hemp 
a food or a dietary supplement, the unknown only complicates 
the downstream use of hemp. The current contracts for hemp 
growers are all over the place. Many times the grower provides 
the land and labor, and the processors provide the seed and the 
genetics and the expertise. By the way, there is no expert in 
the hemp business because they do not exist.
    However, too often the growers are short-changed when the 
processor cannot come up with the money to pay the growers, or 
the specification for the final products have such varied 
results that both sides feel cheated and it is a bad experience 
for all involved.
    In closing, myself, I have been, for better or worse, a 
farmer face for the hemp grower in an effort to finally make it 
a legal crop here in the United States. I thank you for making 
this wonderful crop legal, but now what the hemp growers need 
and want is for this new and valuable crop to be just that--a 
crop, with the same opportunities to grow and fill the 
marketplace with new and valued products. Corn, wheat, and 
soybeans all have hundreds and maybe thousands of product uses. 
Hemp can too. They need the barriers removed and the 
consistency and stabilization which come from the regulatory 
framework you all can give us.
    On behalf of the hemp farmers, my family, and growers all 
over the Nation, I am asking for your help. Thank you for your 
time and consideration and I would be pleased to answer any 
questions that you may have.

    [The prepared statement of Mr. Furnish can be found on page 
58 in the appendix.]

    Chairman Roberts. Brian, we really appreciate your 
comments.
    Mrs. Stark, please.

  STATEMENT OF ERICA STARK, EXECUTIVE DIRECTOR, NATIONAL HEMP 
               ASSOCIATION, READING, PENNSYLVANIA

    Ms. Stark. Thank you, Chairman Roberts, and the entire 
Committee and staff for affording us this opportunity to speak 
on the implementation of the 2018 Farm Bill.
    The National Hemp Association is a nonprofit, grassroots 
organization supporting tens of thousands of farmers, 
businesses, and consumers. We have a particular interest in 
ensuring that this opportunity benefits small and medium-sized 
farmers who have been struggling and who form the backbone of 
America's rural and agricultural economies, and is the 
foundation upon which this country's hemp industry is being 
build.
    Reasonable regulation will be instrumental in ensuring 
future success. One of the major components of these pending 
regulations is the testing protocol used for THC compliance. 
The language of the Farm Bill defines hemp as the plant, 
Cannabis sativa L, and any part of that plant with a Delta-9 
tetrahydrocannabinol concentration of not more than 0.3 percent 
on a dry weight basis.
    When the Farm Bill addresses the requirements for State and 
Tribal plans, it indicates that there must be a provision for 
testing using post-decarboxylation or other similarly reliable 
methods. This language raises many questions and concerns and 
changes the way many States were testing under their 2014 pilot 
programs.
    One of the challenges the pilot programs revealed, and what 
we hope to prevent moving forward, is that if States implement 
too many different testing protocols we are left in a situation 
where what is legal is one State may be considered illegal in 
another State. That can create undue hardship for farmers 
selling across State lines, for trucking companies, for law 
enforcement, and for consumers.
    Another of the challenges revealed by the 2014 pilot 
programs relates to the uncertainty of determining Delta=9 THC 
in hemp crops, including using post-decarboxylation or other 
similarly reliable methods. We would like to recommend an 
approach that creates a level playing field across the country 
while adhering to the law and providing the best possible 
protection for farmers and consumers. This can be accomplished 
by specifying using Gas Chromatography-Flame Ionization 
Detection, or High-Performance Liquid Chromatography to 
estimate the Delta-9 THC levels in post-decarboxylated hemp, 
and that that estimate resulting from those decarboxylation 
methods be divided by 3 in order to determine the Delta-9 THC.
    The reason for dividing the test results by 3 is due to the 
relative difference in the concentrations of THC in post-
decarboxylated hemp as compared to the concentrations in hemp 
on a dry-weight basis. Peer-reviewed research demonstrates that 
the ratio of THC in post-decarboxylated hemp to the THC in hemp 
on a dry-weight basis is somewhere between 3-to-1 and 11-to-1.
    Our recommendation to divide the post-decarboxylated test 
results by 3 is the most conservative end of that range, to 
assure that a crop will meet the legal requirement of 0.3 
percent THC on a dry-weight basis. It also closes any loopholes 
that could even potentially allow marijuana to be introduced 
into the marketplace.
    We further recommend that there be standards established 
for calibration methods, sample preparation, and control 
samples. What must be kept top of mind is that this is about 
the farmers, all of which want to stay compliant, and we are 
talking about one-tenth of one percent being the difference 
between a farmer making a profit or suffering a devastating 
loss.
    The simple fact is there is no single or absolute way to 
determine those THC levels with that level of precision. Our 
recommendation provides compliance to the legal definition of 
hemp, satisfies the requirement for post-decarboxylation 
testing, while also providing protection to farmers and the 
public.
    This is a difficult topic to cover in 5 minutes, so more 
details on the testing protocols, along with other important 
issues such as sample, personal eligibility requirements, 
cross-pollination, hemp flower, and importation of biomass are 
included in our written testimony.
    To quote our chairman, Geoff Whaling, ``This is a once in a 
life time opportunity and we need to get this right.'' We 
acknowledge that implementation of the hemp provisions of the 
2018 Farm Bill is a challenging task for regulators, because it 
touches so many different Federal and State agencies, farmers, 
businesses, and the public.
    At the very heart of what we need to move forward is 
simplicity and clarity. We need regulations that create an even 
playing field across the country. We need to eliminate the 
unintended consequences of legal gray areas caused by each 
State testing differently and operating under a different set 
of rules and regulations.
    The hemp industry has been struggling with legal 
uncertainties for far too long and looks forward to reasonable 
regulations which will afford the opportunity for all to 
prosper within a clear legal framework.
    Thank you again for your time and I am happy to answer any 
questions.

    [The prepared statement of Ms. Stark can be found on page 
61 in the appendix.]

    Chairman Roberts. We thank you for an excellent statement, 
Mrs. Stark.
    Chairman Seki, from one chairman to another, please.

    STATEMENT OF THE HONORABLE DARRELL G. SEKI, SR., TRIBAL 
    CHAIRMAN, RED LAKE BAND OF CHIPPEWA INDIANS, RED LAKE, 
                           MINNESOTA

    Mr. Seki. Chairman Roberts, Ranking Member Stabenow, my 
Tribe's Senator, Senator Smith, and other friends on this 
Committee, my name is Darrell G. Seki, Sr. I am Chairman of the 
Red Land Band of Chippewa Indians. Chi Miigwetch for the 
opportunity to testify today about the opportunities and 
challenges that the new Federal hemp law offers for Indian 
country.
    Red Lake's 840,000-acre reservation is held in trust for my 
Tribe by the United States, and is home to over 12,000 Tribal 
members. It is remote with limited job opportunities. While 
unemployment in Minnesota is below three percent, ours remains 
close to 40 percent. Because of this, our Red Lake Tribal 
Government is constantly trying to create new jobs on our 
reservation.
    Thanks to this Committee, and thanks to the work of many 
Tribes and organizations in the Native Farm Bill Coalition, the 
2018 Farm Bill opened a door for Tribal governments to create 
new and sustainable opportunities for jobs and economic 
development by growing, processing, marketing hemp products.
    Several years ago, our Red Lake Tribal Government began to 
develop necessarily legal logistics infrastructure to grow, 
process, and market hemp products. We set aside lands for hemp 
farming, developed Tribal law to guide the development of our 
regulatory plans. We issued a license to a Tribal member who 
made plans for a joint venture project with an experienced hemp 
grower, and we also explored our agreements with seed providers 
from Manitoba and Colorado.
    We also sought significant levels of financial capital 
investment that are needed to turn our reservation into a 
competitive, productive growing and processing center for 
industrial hemp in our region. Red Lake, like some other 
reservations, is a great platform where large-scale growing and 
regional processing can take place in a business-friendly 
climate. We are excited by the possibilities.
    However, our enthusiasm has been tempered by the 
significantly large startup costs of land preparation, seeds, 
cultivation, and testing equipment. These challenges are 
compounded by the regulatory uncertainty that Tribes are 
experiencing at the hands of the USDA. All our efforts are at 
risk of being wasted if USDA does not give Tribes like Red Lake 
a fair regulatory opportunity to compete on equal footing with 
States.
    Earlier this year, USDA announced that they were developing 
2018 Farm Bill regulations on hemp, which were initially 
expected to be released in early fall of 2019 to accommodate 
the 2020 growing season. Yes, USDA continues to push back its 
release date. That means Tribal producers are getting less and 
less time to prepare, plan, finance, and plan for the new crop 
year.
    Meanwhile, States are forging ahead in the competition 
because they have 2014 Farm Bill authority on hemp seed 
cultivation processing that Tribes do not because Tribes were 
shut out of the 2014 Farm Bill hemp provisions. It is 
ridiculous and na?ve for USDA to suggest that Tribes should ask 
States if they would partner with us as a highly competitive 
stage of an emerging market.
    Although Congress unlocked the door to Tribal hemp 
production, USDA's Chairman is jamming that door shut through 
delays that put Tribes at competitive disadvantages. I doubt it 
is what Congress intended.
    Because of this, Red Lake is urging this Committee to work 
with Indian Country to compel USDA to take five actions right 
away.
    First, USDA must negotiate with Tribes and determine what 
constitutes the territory of our Tribal Government that will 
define boundaries of each Tribe's jurisdiction over hemp 
production.
    Second, USDA must partner with Tribal Government through 
direct consultation to develop a model plan for hemp that each 
Tribe can adapt to fit its own situation.
    Third, USDA must guarantee Tribes equal access to credit, 
crop insurance, technical assistance for hemp production and 
processing.
    Fourth, USDA must recruit FDA and together work jointly 
with Tribal governments in approving and marketing hemp 
products.
    Fifth, and finally, USDA must issue its 2018 Farm Bill 
regulations in early fall, after robust negotiations with 
Tribes, so that Tribes are no longer disadvantaged by being 
left out of the 2014 authority.
    Chi Miigwetch for inviting me to testify today, for your 
leadership in enacting the 2018 Farm Bill. Red Lake Nation 
looks forward to working with you to see that the law is 
implemented as you intended.
    I will be available for questions, and I say again, Chi 
Miigwetch.

    [The prepared statement of Mr. Seki can be found on page 66 
in the appendix.]

    Chairman Roberts. I want to thank you, Mr. Chairman, and 
rest assured, when the USDA has its final rule ready, and we do 
not want to hurry this up too much but we want to get it right, 
but we know we have to expedite this and that language with 
regards to your concerns that you have outlined will be 
addressed.
    Mr. Furnish, your experience as a grower with more than one 
business model for hemp production on your operation brings a 
valuable perspective. Do you have any suggestions regarding how 
the RMA can determine good farming practices when hemp 
varieties are changing and producers are learning more about 
the crop every year, such as best planting dates and crop 
rotations?
    Mr. Furnish. Yes, Mr. Chairman. I think it would be very 
beneficial if members of all agencies come to a working hemp 
farm in Kentucky and get to experience all the different 
scenarios that play out on our farm.
    I would also encourage the different agencies to get in 
touch with the Kentucky Department of Agriculture, to Mr. Ryan 
Quarles and Doris Hamilton, who is the Hemp Director, and ask 
them how they managed and accelerated the Kentucky program from 
33 acres in 2014 to 60,000 acres in 2019.
    The groundwork has been laid in Kentucky. We have a 
tremendous amount of data available through the Kentucky 
Department of Agriculture and through our hemp growing program. 
I would encourage anybody that wants to learn about hemp and 
what has happened in the--this is my sixth crop. All the data 
has been kept by the Department of Agriculture, Commissioner 
Ryan Quarles, and it is all available to agencies to take a 
look at.
    There is data on production. There is data on 
profitability. There is data on how many crops have been 
destroyed because of weeds. There is data on how many crops 
have been planted that were not harvested. There is tons of 
data available in Kentucky if people will just ask us for it.
    Any agency or any member of this Committee is invited to my 
farm at any time to have the experience of what we are doing 
within the hemp industry, as well as to see the processing 
side. We built a processing facility from the ground up, went 
from the shed in the side of a barn into a $35 million facility 
to process hemp and ship it all over the world, on our farm in 
Cynthiana, Kentucky.
    It is quite an experience, and if anybody wants to come or 
if you want to hold a field hearing at my farm, that would be 
most welcome, Chairman.
    Chairman Roberts. You discussed the need for an effective 
herbicide. Can you tell the Committee about the agronomic 
challenges for hemp growers in the absence of any crop 
protection tools?
    Mr. Furnish. Mr. Chairman, I would say the first couple of 
years in Kentucky that 80 to 90 percent of the acres planted 
were destroyed by weeds, at planting. The challenge with hemp 
seed is when you plant it directly into a field the seed is not 
very vigorous and it is very hard to get out of the ground. The 
soil conditions and the rain has to be almost perfect to get 
the current hemp varieties to germinate in the field.
    I have planted one hemp field seven times, one summer, just 
to try to get it to live. It was either too dry or too wet or 
it rained the day I planted it, it was too crusted, it was too 
deep, it was too shallow.
    We have perfected that. Over six crops we have perfected 
that, but it is still a challenge. Weeds are a very big 
problem. In all other commodities I have weed killers available 
that I can put on pre-plant or even post-plant. Right now, we 
go to extensive lengths to make sure that weeds do not get in 
our crop.
    The reason we went to the tobacco model of planting the 
crop is because we have weed control systems already set up 
with cultivation equipment from tobacco, and so we are able to 
keep the weeds out of the hemp the same way we can the tobacco, 
with cultivation. It would be much easier if I could, when I 
put my fertilizer on pre-plant, that I could come through with 
a herbicide that has an effect over the entire length of the 
crop, the same way we do for any other crop.
    Many farmers lost all their money the first year due to 
weeds. Luckily, on our farm, we have planted about 1,000 acres 
and only destroyed 5. That is a pretty good track record for a 
new crop. I was lucky enough to have a gentleman from Australia 
who had 18 years of experience. Even though we have different 
growing models, he was able to bring his experience to me and 
we were able to perfect that experience in Kentucky.
    Chairman Roberts. I appreciate that very much. What part of 
your hemp crop is 23 feet high?
    Mr. Furnish. The fiber crop is planted to get as tall as 
possible. We plant it in May and we hope by August it is 22 to 
23 feet tall. We had to buy specialized equipment from Germany 
and Australia just to mow it, because it was so big. Once we 
mow it with this mower from Germany, we can actually handle it 
very easily at that point, because it cuts it into two-foot 
sections, lays it on the ground in a windrow, and then we can 
bale or chop it. It is very easy at that point. Many farmers 
have tried to use hay equipment to bale fiber and it is an 
absolute disaster.
    Chairman Roberts. I thank you for your testimony and very 
practical advice.
    Mrs. Stark, your testimony regarding sampling and testing 
is extremely insightful. What is the most important issue on 
testing affecting farmers and the interState movement of the 
crop, hemp?
    Mrs. Stark. The largest issue there is consistency that 
what tests legal in one State will also test legal using the 
same or a different method in another State, and that is why we 
make the recommendation of reconciling the difference between 
decarboxylation testing and testing on a dry-weight basis. That 
ensures that just a little bit of wiggle room, so to speak, in 
order to make sure that no matter which protocol a State is 
using for testing, or what law enforcement is using to test for 
compliance, will be consistent from State to State. There is no 
risk of a consumer purchasing a product in another State and 
bringing it home and having it test uncompliant in that State.
    Like I said, when you are talking about one-tenth of one 
percent being the difference between legal and illegal, it is 
important. I think that the spirit of the language in the Farm 
Bill mandating post-decarboxylation testing is to close any 
potential loophole that could let marijuana escape into the 
market under the guise of the hemp program, but certainly even 
with a few points over 0.3 post-decarboxylation there is zero 
risk of that happening with our recommended protocols.
    Chairman Roberts. Mrs. Stark, finally, I should have 
started with the most basic question. Does your association 
support implementation of the rule of the Department of 
Agriculture in a farmer-friendly manner? Obviously you do, I 
think.
    Ms. Stark. Yes.
    Chairman Roberts. Would availability of an option for crop 
protection help this industry expand with any future expansion?
    Ms. Stark. Certainly. I mean, you know, certainly we are 
very, very supportive of organic practices for hemp, and one of 
the things that is attractive about hemp to a lot of like 
smaller farmers is its propensity to do well in organic 
practices. We have not done this yet on a full commercial 
scale. When we start seeing thousands, if not millions of acres 
of hemp being grown, particularly for fiber production, for 
manufacturing purposes, absolutely, I anticipate that that is 
going to be an important issue.
    I think, from some of the researchers I have talked to, we 
just do not know what pests are going to become problematic. It 
seems like once hemp starts to be grown right next to other 
more traditional crops it could be that certain pests that are 
a problem in those, like rye or wheat crops, might figure out 
that they have a taste for hemp as well.
    Certainly the research should be done now in anticipation 
of moving forward, to make sure that it does not ever become 
extremely problematic. There is definitely a need for that, and 
definitely a need for the specific testing protocols for food 
products, because hemp does tend to be a hyperaccumulator and 
absorb more toxins than traditional plants. It is definitely 
going to be a large need.
    Chairman Roberts. I appreciate that very much.
    Senator Smith?
    Senator Smith. Thank you, Chair Roberts, and thanks to all 
of you for being here today.
    Chair Seki, I would like to start with you. I very much 
appreciate your testimony and I appreciate Chair Roberts' 
comments also that we hear you loud and clear on how important 
it is that USDA do the kind of consultation with Tribal 
governments, just as they would with State governments or other 
governments.
    You know, I want to say that, you know, for those of you 
that do not know Minnesota so well, the Red Lake Nation is over 
260 miles from Minneapolis and St. Paul, and as you say, 
because of the remoteness, unemployment is a significant issue. 
I remember when I first met you, in 2014, we talked about many 
things, but your particular passion was economic development in 
Red Lake Nation and what we could do. I appreciate how 
important this opportunity could be for Red Lake.
    Let me ask you, Chair Seki, in your testimony you talked 
about the idea--you know, we talked about various ways that 
USDA could consult with and assist Tribal governments as they 
pursue this opportunity, and you talked about the idea of maybe 
if USDA could create a model plan for Tribal governments. Could 
you talk about that and just expand a little bit more on how we 
could be better partners with the Tribes as they work forward 
this opportunity?
    Mr. Seki. OK. Before I start, the first panel, it is 
concerning to me, to us, that only USDA mentioned Tribes. See, 
this is the problem I see, we see, is because we were not 
included in the 2014 Farm Bill, and now that we are included in 
the 2018 Farm Bill, and there are many obstacles that the 
Tribes are running into. That model for all Tribes, that 
everyone works together as partnership to make this hemp 
production work in Indian Country is very, very important, 
because you, as your Committee, as I stated in my oral 
statement, I gave you five--I recommended five steps to be done 
to work for our Tribal Nations. You can do it. It is the right 
way and the model for the other Tribes that are interested in 
doing hemp production.
    Senator Smith. Thank you very much, Chair Seki, and it is a 
great point. It is not only USDA. It is all the Federal 
agencies that interact. We will followup specifically to make 
sure that we address this.
    Let me ask Mr. Furnish--I am so interested in all the 
practical experience that you have and that we have in 
Kentucky, and I appreciate that there is still a lot of 
research that we have left to do on the best varieties of hemp 
seed, what is most suitable for different regions, and you 
talked about this in your testimony.
    As a seasoned hemp grower, could you give--what advice 
would you have to give to new hemp growers about ensuring that 
the hemp crop is at the 0.3 percent THC when the plant is 
harvested?
    Mr. Furnish. Senator, it all starts with the genetics. You 
have to find a reputable genetic source who will tell you the 
truth and tell you what the actual C of A's are, which is 
Certificate of Analysis, and you have to try to find one that 
is as close to being certified as possible. The problem is 
there are very few reputable seed source farms available in the 
United States at this point. Most of the varieties for CBD 
production and for full-spectrum hemp oil production came from 
bad marijuana varieties, and so that is what we are dealing 
with.
    Many farmers are buying genetics from suppliers who are 
told, in the beginning, that the only way to keep it below 0.3 
is to harvest it early. Well, that creates a huge problem 
because then your cannabinoid content is also less because you 
harvested it early.
    Senator Smith. Mm-hmm.
    Mr. Furnish. My brothers and I have been trying to come up 
with varieties that we do not have to harvest early, and that 
we can let go to full maturity but still stay below 0.3. We 
have had pretty good success at that.
    I would encourage any farmer that wants to start in this 
industry, first talk to someone who has done it for a while. Do 
not believe people who say they are experts, and do not believe 
a company who comes and says, ``I am going to provide 
everything. You just provide your land and labor and I am going 
to give you hundreds of thousands of dollars,'' because that is 
not reality.
    The reality is you can make a living growing hemp, but you 
will not become rich growing hemp in one year. Many farmers are 
being told by companies, ``If you grow hemp for me, and grow my 
genetics, you are going to be rich in a year.'' I do not know 
anything legal in the United States that you can become rich in 
a year.
    I would encourage anybody--you know, come to Kentucky. We 
have field days. University of Kentucky has field days. Murray 
State is doing great work on hemp. They have a field day. We 
will do farm tours for farmers. I do not have enough time in my 
schedule to answer every farmer that calls me but I try to do a 
good job of working with other State, Federal, and regional 
organizations to get the word out about what hemp is.
    I would encourage anybody here, or listening to this, to 
join is the U.S. Hemp Roundtable as a supporter. It is very 
effective. We have helped change a lot of laws throughout the 
country. There is a lot of useful information that is generated 
on a daily basis to members of that group, and that is a good 
networking opportunity for everybody in the industry--political 
figures, government officials, farmers, producers, researchers. 
It is a hub that everybody ought to be using.
    There are other organizations. Vote Hemp, the National Hemp 
Associations. There are many organizations out there. I am just 
familiar with the U.S. Hemp Roundtable because I was a founding 
member and president, but that is not the only one. Join these 
organizations. Go to these trade shows and conferences.
    Enter hemp with caution, extreme caution. I know multi-
million dollars lost every day in the hemp business in Kentucky 
and across the United States.
    Senator Smith. Thank you very much. Mr. Chair.
    Senator Boozman.
    [Presiding.] No, thank you. That was, again, very 
interesting. This is a topic of discussion right now, and Mr. 
Furnish, you are kind of one of the guinea pigs. You have been 
in this for quite a while compared to most. It sounds like, you 
know, if you do not have time for all the calls, at some point 
when you get tired of working the fields you can become a hemp 
consultant. There is probably money to be made in that regard.
    Mr. Furnish. I already am a hemp consultant, sir.
    Senator Boozman. Very good.
    Mr. Furnish. It pays better than farming.
    Senator Boozman. Exactly.
    I would like to talk a little bit about some of the nuts 
and bolts, as far as getting in the business. I used to have a 
bunch of cows. I understand that business very well. I have 
grown to understand all of these things. Tell us about the 
expense of getting in. Is it costly to do that? All of farming 
is costly these days.
    Mr. Furnish. Yes sir, Senator. I think it depends on what 
part of the country you are in as to what type of hemp you will 
grow. It is my belief that the CBD full-spectrum hemp oil 
production will take place where tobacco and vegetables have 
been grown, because the farmers are used to having labor-
intensive crops with a lot of machinery, and they are used to 
farming that way.
    Now, I will never be good at growing fiber and seed from 
hemp because I am not in a row crop area and I do not have 
large acreage that I can run huge machines across. It is my 
belief that the seed production and the fiber production will 
take place in the Corn Belt where you have flatter land, and 
you don't need as much water to grow hemp, so I anticipate in 
the future that is where those crops will go.
    For a tobacco farmer getting into hemp production it is 
very simple. We did not have to spend any money to start 
growing hemp on our farm. We owned a lot of equipment, a lot of 
tobacco equipment, a lot of wagons, a lot of tobacco barns. We 
use--one acre of hemp requires 25 rails in a tobacco barn. That 
is how we do it. It is very efficient. It is very cheap.
    We already had the assets in Kentucky that we needed to do 
this crop, and that is one reason I think Kentucky has done so 
well, so far, with the acreage, is because we already had the 
infrastructure.
    The biggest challenge we have is H-2A labor. We will have 
60 workers on our farm this year and we are dealing with H-2A 
and it is almost a full-time job for one of my brothers just to 
keep the paperwork straight. Between the hemp regulation and 
the H-2A regulation it is a full-time job. It should not be 
that complicated to bring in legal workers to work on our farm, 
considering they have been helping us for 18 years. We should 
not have to go through the same paperwork and the same housing 
inspections every single year.
    A three-year visa program through H-2A for workers who have 
never caused a problem would be excellent for us, so we could 
do paperwork every three years instead of every year.
    Senator Boozman. Right.
    Mr. Furnish. You know, it is farming. We have a lot of 
challenges. Weather is a challenge. The biggest challenge right 
now is good genetics and companies buying from you that will 
tell you the truth and pay you on time and pay you what they 
are supposed to pay you.
    Senator Boozman. You mentioned about seed. It sounds like 
you are developing your own seed varieties. Is the seed--do 
most people sell the seed as a crop, or part of the crop?
    Mr. Furnish. Every scenario you can imagine is taking place 
in the country right now. You have a lot of experts who have 
done this their whole lives, who just started three months ago, 
who are trying to sell seed to farmers.
    Senator Boozman. Right.
    Mr. Furnish. The biggest challenge farmers have right now 
for what is most in demand is for CBD. You need high-CBD 
varieties and low-THC varieties. The challenge is that seed is 
not available, so the majority of farmers in the United States 
are using clones from mother plants. Clones is a very expensive 
way to farm. It is not good for agriculture. It is good for 
greenhouse production but it is not good for agriculture.
    A clone right now, delivered to my farm from a supplier in 
Kentucky or Colorado or California, would cost me $4 a piece--
$3 to $4 a piece. It requires us 3,200 plants per acre. You 
take 3,200 times $4 and I have already got $13,000 invested in 
plants. OK? That is not the reality of farming moving forward.
    The price of CBD will fall. Once there is more production, 
the price will fall. The only way for farmers to sustain that 
is to have a good source of seed. We try to plant feminized 
seed because the male will pollinate the female and create seed 
in the female, which creates problems for the extraction. We 
try to eliminate the males by using feminized seed.
    Well, if I buy feminized seed right now I have to pay $1 a 
seed to have it delivered to me. Odds are the germination will 
be 20 to 30 percent lower than the company says it is, and when 
I plant it, it will be 20 to 30 percent higher in the amount of 
males in the field than what they told me it is.
    The only way to remedy that is to create, with USDA, a PVP 
program for seed certification and breeding, a feminized seed 
through a true research partner and a farmer, because we know 
what needs to take place and we move faster than government and 
universities. We are trying to develop a project now to speed 
up this process, with the help of the 2018 Farm Bill. Now we 
can go after a PVP, which is Plant Varietal Protection, for 
genetics, which does not exist.
    People claim to own genetics in this country right now for 
hemp, and they make you sign a contract that says you cannot 
re-propagate that variety. The truth is nobody owns the 
genetics. They have stolen the genetics from somebody else.
    Senator Boozman. Right. Thank you very much.
    Senator Hoeven?
    Senator Hoeven. Thank you, Mr. Chairman. Is this kind of an 
early takeover, or what is going on here today?
    [Laughter.]
    Senator Smith. Senator Hoeven, I had a rapid rise to power 
here today.
    Senator Hoeven. I am impressed.
    Thanks to all of you for being here.
    Ms. Stark, talk about the market size. I mean, you know, I 
know there is a lot of interest in growing hemp and developing 
the market. Talk to me about the market size, the market 
potential for all of the different potential products that go 
with hemp, whether it is the CBD, or making clothes, or 
whatever it is. Just kind of take me through the market 
opportunities, market size and scope.
    Ms. Stark. Well, certainly right now CBD is the largest 
segment of the marketplace. It is where the demand is right 
now. It is where the money is right now.
    Senator Hoeven. Well, that is kind of important when you 
are deciding which crop and product to go with, isn't it?
    Ms. Stark. Cultivation for CBD versus fiber and grain are 
two very different business models. They are cultivated 
differently. The genetics are different. The input costs are 
dramatically different. They really are--it is the same plant 
but they almost are kind of different industries.
    The infrastructure for processing CBD exists right now. It 
is where all the investment has been so far. Right now CBD is 
definitely where the markets are. Now the future of that is 
largely going to depend on how FDA handles this and what type 
of regulatory framework we have to move forward.
    The longer-term vision for hemp, in looking, you know, 
maybe 5, 10 years down the road, hopefully faster than that, 
would be the fiber markets. That is where we are going to have 
the opportunity to create manufacturing jobs, and have the need 
to grow hemp on a massive scale. When we talk about supplying 
the auto industry, and looking to replace single-use plastics, 
replacing, you know, some of the paper pump we use for paper 
plates and for paper-making and things of that nature.
    There is a lot of infrastructure that still needs to be 
built there, but the long-term potential of that is tremendous. 
I often say that I think that fiber is going to be the future 
of hemp. It has the most potential. It is also going to be what 
is going to help us realize the most positive environmental 
impacts as well. There is so much benefit to it, but we are 
still a little bit behind on building the infrastructure to get 
there, as opposed to CBD, which is very popular and in demand 
right now. I expect it will continue to be for the foreseeable 
future, assuming that we get a clear regulatory framework.
    Senator Hoeven. Is that it--oil and fiber are the two? Are 
there other aspects of it?
    Ms. Stark. Well, the word ``oil'' is confusing for a lot of 
people. Hemp oil is not CBD oil. Hemp oil, by strict 
definition, is cold-pressed from the seed, and that type of oil 
is what is used to make cooking oil. It is a popular basis for 
soaps, lotions, and shampoos. That has always been perfectly 
legal. That has always been exempted from the Controlled 
Substances Act from the beginning, which is why we have the 
market for hemp hearts and hemp soaps and lotions, from oil 
that we have been always able to import from Canada or other 
places.
    CBD oil, on the other hand, is extracted from the plant 
material, primarily the flower. I always like to use the 
analogy of thinking of it as like a lavender essential oil. It 
is just an extract from the cannabis plant, the hemp plant, as 
opposed to lavender or other types of essential oil.
    Senator Hoeven. The hemp oil is from the seed----
    Ms. Stark. Yes.
    Senator Hoeven [continuing]. and the CBD oil is from 
pressing the flower?
    Ms. Stark. It is not necessarily pressing, but there are 
different methods of extractions. There is CO2 extractions, 
there is butane. Yes, it is an extract from the flower.
    Senator Hoeven. You knew all that, right, Mr. Chairman? You 
are fully aware of that? OK.
    Talk about those two markets, the CBD oil versus the hemp 
oil, and can you take both? If you grow the plant, do you have 
to make a choice there, and then do you have to make a separate 
choice on fiber? Or are the opportunities to have multiple 
products?
    Ms. Stark. Most people who are cultivating it for CBD right 
now only want female plants and do not want them to be 
pollinated and produce seed, because it reduces the volume of 
the flower material that you have for extraction and lowers the 
total CBD content of that biomass, of that acreage.
    Now, conversely, if you are growing it for fiber and grain, 
you can save the leftover flower material and the leaves and 
that can be used for CBD extraction. Fiber and grain varieties 
tend to have 2 or 3 CBD content whereas specific CBD varietals 
are 10 percent or higher, therefore generating a lot more 
revenue per acre.
    You can take fiber and grain crops and extract CBD from 
them on a much smaller scale, but if you are growing a really 
large volume it is still a good value-add to that crop. If you 
are growing it for CBD specifically, which is what is going to 
get you the higher profit margins per acre, you definitely want 
to grow CBD-specific varietals and not have them get 
pollinated, if that makes sense.
    Senator Hoeven. It does. It makes it complicated.
    Ms. Stark. This is a very complicated world. Yes, it is 
complicated. The potential is so tremendous. The thing that is 
great about the CBD production, the way it is now, is that if 
you are a small farmer and you only have a 20-acre farm, what 
other crop can give you that type of revenue in that kind of 
small acreage? You know, and then when you talk about----
    Senator Hoeven. Twenty acres is more in the large garden.
    Ms. Stark. Well, not in Pennsylvania, it is not. Again, so 
there is something for everybody. There is a business model 
that works for every type of farmer, and I think that is what 
is really beautiful about it, is that there is room for 
everybody. We have room for huge, commercial-scale production, 
but we also have room for even urban farmers to be able to, you 
know, generate a little bit of revenue. This crop can be 
totally inclusive, and there is a niche for everybody.
    Senator Hoeven. Thank you. Very interesting. I appreciate 
that very much.
    Can I ask the indulgence of the Chair for one more 
question? I will try to keep it--OK.
    Chairman Seki----
    Senator Smith. Seki.
    Senator Hoeven [continuing]. Seki. I am sorry. Chairman 
Seki, just in terms of from a Tribal standpoint, just your 
thoughts in terms of opportunities but also challenges in terms 
of getting going. It has got to be kind of brief. I do not want 
the Chairman to come down on me too hard.
    Mr. Seki. OK. The challenges we have is in my oral 
presentation, the five steps, and also the things we need for a 
model for tribes, according to their own situation. Like in Red 
Lake, our economic development and our Red Lake, Inc., engage 
in planning, and due diligence, regarding our lands, where we 
can plant the hemp. Also due diligence, what kind of equipment 
we need to start this production.
    For example, say the market out there, or say we started 
planting 500 acres, and like this lady is saying about the 
flowers, this is where you get the CBD oil and other products. 
Now our first year we figure we could make $3 to $4 million, 
and it is going to take three to four years to get everything 
going to maximize this opportunity Tribes are given on this 
2018 Farm Bill. Again, I want to say Chi Miigwetch to this 
Committee for implementing that for Tribes to do the same thing 
as other States are doing.
    Senator Hoeven. Absolutely. We want to try to help you 
realize that opportunity. Thank you. Thanks to all of you for 
being here. I appreciate it very much.
    Thank you, Mr. Chairman----
    Senator Boozman. Thank you, Senator Hoeven.
    Senator Hoeven [continuing]. and Ranking Member.
    Senator Boozman. Thank you all for being here. That 
concludes our hearing. I do want to thank you. This has been a 
very informative conversation, sharing some of the upside and 
downside, you know, what is lurking out there. We appreciate 
you taking the time to be with us today.
    To my fellow members, we ask that any additional questions 
you may have for the record be submitted to the Committee Clerk 
five business days from today, or 5 p.m. next Thursday, August 
1st, and with that the Committee is adjourned.
    [Whereupon, at 11:29 a.m., the Committee was adjourned.]

      
=======================================================================


                            A P P E N D I X

                             July 25, 2019

=======================================================================

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

      
=======================================================================


                   DOCUMENTS SUBMITTED FOR THE RECORD

                             July 25, 2019

=======================================================================

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


      
=======================================================================


                         QUESTIONS AND ANSWERS

                             July 25, 2019

=======================================================================

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                 [all]