Hemp not a ‘silver bullet’

Is a broadacre hemp industry all hype?

Grains
NICHE CROP: While hemp production in Australia is likely to continue to grow, there are economic and agronomic realities which limit its potential to gain broadacre status.

NICHE CROP: While hemp production in Australia is likely to continue to grow, there are economic and agronomic realities which limit its potential to gain broadacre status.

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Is a broadacre hemp industry all hype?

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In farming there is rarely a silver bullet and anything promising one should be looked at with suspicion.

Claims hemp could be an alternative crop to cotton, in the wake of a call from a South Australian Senator to ban cotton exports, have been widely disputed by many mainstream agronomists and researchers. 

They say the crop does not stack up, economically or agronomically against other mainstream rotational options over a broad scale.

Truffle sized

Agrifutures Australia, manager emerging industries, Duncan Farquhar said the hemp industry was on track to reach $10 million in farm-gate production in the near future. 

To put that in perspective, Mr Farquhar said the truffle industry had just reached the $10m benchmark, while the tea tree industry was valued at about $30m. 

“There are definitely much bigger industries, cotton would be in the order of $2 billion, so it is a fair way off that,” he said. 

Mr Farquhar said there was significant work that would be required to increase the size of the hemp industry.

“The limiting factors in bringing hemp into the mainstream are getting the varieties right, and understanding the agronomy of the best varieties for Australian conditions.,” he said. 

“In Tasmania there are about 1700 hectares being grown, that is showing Tasmanian farmers see hemp as competitive against other possible crops.”

Mr Farquhar said while hemp could be grown either for fibre or as a grain for food, he felt the largest opportunities for the crop were in the food sector.

“The largest opportunity at the moment is hemp for seed,” he said. 

“The recent changes in the regulatory environment have taken the brakes off hemp as a food.

“The question is, where does it fit in the Australian agricultural landscape, and what sort of opportunities if we worked out the agronomy, for global markets, rather than the niche market.”

Facing facts

While legislative changes have relaxed impediments to growing and selling hemp as a seed grain, comparisons with the US and Canada indicate expectations are being set too high.

A 2012 report by ABARES, commissioned by Food Standards Australia New Zealand on the human consumption market for hemp, predicted the domestic market to increase by 250-380 tonnes per year for five years as a result of legislation for human consumption, valuing this scenario at a mere $665,000.

In his paper, tabled at the 2018 Australian Industrial Hemp Conference, Jermome Cherney said licencing and regulations had not been an impediment for Canadian hemp farmers for over twenty years and many studies cited uncertainty about long term demand and the potential for oversupply, which he said are typical concerns for the introduction of any new field crop.

“Hemp has been replaced by other natural and man-made fibres for most uses, and worldwide hemp production for fibre has been relatively stagnant for the past 20 years,” he said. 

“There is a stable niche market for hemp fibre products in the textile industry, but it is not clear if the market will expand greatly in response to various hemp building construction products or biocomposites now available.”

Mr Cherney said while he felt hemp grown for human consumption had potential, more research was needed. 

“Oilseed hemp is currently not economically competitive with the other edible vegetable oils. Higher seed yields of the crop are likely through breeding and improved agronomic practices, which would make the crop more competitive.”

“Vegetable oil extracted from hemp seeds cannot be used for cooking or frying, and is best used as a fresh salad oil.

“Because the fatty acids in hemp seed oil are mostly unsaturated, it has a relatively short shelf life, and requires dark containers and refrigeration.”

Weedy potential 

Market potential aside, a lack of mature agronomic research means growers choosing to grow hemp are exposed to significantly more production risks than when growing mature competitor crops. 

While the Australian Industrial Hemp Alliance currently holds five active permits covering a range of fungicides, insecticides and herbicides, including thiram, methomyl and glyphosate, most of the permits mention limited data is available on the efficacy and crop safety of these chemicals. 

​Mr Farquhar said while permits exist, there are gaps for the control of pests, such as heliothis, in crops destined for human or stock consumption. 

“If heliothis is an issue it would help to have some insecticides that could be sprayed on it,” he said. 

“Often people are quite enthusiastic about a low input hemp and that is where the industry is focused, but pest and disease control is often an issue in emerging industries because you have to do that work for a very small market.

“So the chemical companies are not so keen to have their products registered for small market sizes.”

Control of volunteer hemp is also of concern, as in North America the species escaped cultivation and gradually spread, becoming known as ditchweed. 

Big spender 

A common myth surrounding hemp is that it does not require fertiliser, however papers tabled at the Australian Industrial Hemp Conference, available on the Agrifutures website, indicate hemp is responsive to nitrogen fertilisers. 

“They do not fix their own nitrogen,” Mr Farquhar said.

Data from the Canada Fertilizer Institute indicates soil nutrient removal rates of hemp grown for seed would exceed that of a canola crop, while hemp grown for fibre to exceed a maize silage crop, the institute also said the crop removes a significant amount of Potassium. 

While gross margin comparisons are difficult to ascertain based on the limited data in various production systems in Australia, a report by Macquarie Franklin indicated a gross margin of about $1300 a hectare were achievable based on a one tonne seed yield valued at $3500 with variable costs of $2200. This figure is significantly less then comparable irrigated crops and slightly lower then averages for a high rainfall zone dryland canola crop. 

Mr Cherney said the main concern for viable North American production of hemp seed is yield. 

“Average North American yields of about 2 tonnes/ha need to be doubled to compete economically with other oilseeds,” he said. 

Water confusion

While recent media has referred to hemp using half the water of a cotton crop, this figure is likely based on a report from Stockholm Environment Institute conducted in 2005, comparing cotton, polyester and hemp water use. 

This report is significantly misleading when not read in its entirety, using a figure of less than 40 per cent water use efficiency, that was determined in 1993 and based on average world data.

According to data from Cotton Australia,  Australian irrigated lint yields are now the highest of any major cotton producing country in the world, being about three times the world average. 

Mr Farquhar said.he was not aware of any research conducted in Australia directly comparing the water use efficiency of the crops. 

Information obtained from the Hemp NSW Primefact Hemp estimates between 3 and 6 megalitres of water a hectare, while Cotton Australia report average irrigation requirements of  7.8 megalitres per hectare. 

Given both the higher lint yield and value of product of cotton, compared to hemp, water use efficiency could be said to be significantly better in cotton. 

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