A study was requested by the Kentucky Industrial Hemp Commission following the passing of SB 50, the law that allows Kentucky farmers to grow hemp if it somehow becomes legal. The result was a study titled, "Economic Considerations for Growing Industrial Hemp: Implications for Kentucky’s Farmers and Agricultural Economy" published in July 2013 by the Department of Agricultural Economics at the University of Kentucky.
An article published by the Lexington Herald-Leader the following September claimed the study found "limited job and profit potential." UK agricultural economists Leigh Maynard and Will Snell found that "there could be a place for hemp in the farm landscape, but profits and jobs might be limited. In the short run, according to the study, a new Kentucky hemp industry might produce "dozens of new jobs" rather than the hundreds touted by lawmakers earlier this year."
However, Snell said in an interview "If there's a market, it's a small market, but it's growing and it's an opportunity for our farmers," And even if Kentucky farmers could grow as much hemp as Canada, it would equal less than 1 percent of what state farmers make on other crops already, he said.
"Canada has 60,000 acres of hemp," Snell said. "We had 1.5 million acres of corn, 1.5 million acres of soybeans and 600,000 acres of wheat last year alone."
He and Maynard did find potential for hemp as a seed crop, which could compete with the profitability of mainstream grain crops at the upper levels.
"Some of our top-end scenarios for hemp did indicate $200 to $400 net return (per acre), which is nothing to sneeze at," Snell said.
Although hemp won't necessarily replace tobacco or even grain production for much of the state, it could be viable particularly for Central Kentucky if federal restrictions are eased to allow farmers to grow hemp legally.
"It can only help," Maynard said. "The farmers aren't going to dive in without some assurance that it will be economically viable. ... (Hemp) could give them one more opportunity to earn income."
Kentucky Commissioner of Agriculture stated in response to the study that he wasn't worried that the study would take away from all the political capital he's invested in passing hemp legislation.
"I'm very optimistic of industry hemp," Comer said. "In defense of UK, it's very difficult to do an economic impact study of an industry that doesn't exist."
---
Sources
http://www.kentucky.com/news/business/article44442171.html
http://www.dailyindependent.com/news/local_news/uk-study-shows-small-market-for-hemp/article_e23795a7-abdd-5122-bd48-6afb7f41dc4e.html
http://www.kyagr.com/kentucky-agnews/2013/documents/UKhempstudyJuly2013.pdf
http://www.kyagr.com/kentucky-agnews/2013/u.s.-hemp-market-small-but-growing-uk.html