Hemp Industry Awarded $200,000 USDA Agreement to Establish European and Asian Markets
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Hemp Industry Awarded $200,000 USDA Agreement to Establish European and Asian Markets

The hemp industry will use an international trade agreement to enter two of the biggest global hemp markets.

November 13, 2020

The National Industrial Hemp Council (NIHC) is eyeing Europe and China to apply its recently awarded $200,000 grant, which the organization will use to develop the research, relationships, and standards necessary to tap into the global hemp market.

The U.S. Department of Agriculture's Foreign Agricultural Service (FAS) formally announced the Market Access Program (MAP) funding agreement with NIHC on Nov. 12, a week after informally notifying the group of the one-year cost-sharing deal.

"[The] announcement makes NIHC a trusted partner to USDA for hemp fiber, feed, food and CBD [cannabidiol] companies looking to break down trade barriers in markets overseas," said Kevin Latner, NIHC's Senior Vice President for Trade and Marketing. Latner will be responsible for implementing the program. 

Through the MAP program, FAS partners with U.S. agricultural trade associations, cooperatives, state regional trade groups and small businesses to share the costs of overseas marketing and promotional activities that help build commercial export markets for U.S. agricultural products and commodities. These funds can be used for facilitating trade missions and meeting with industry stakeholders and government regulators overseas.

Under the agreement, NIHC members "have unprecedented access to United States trade negotiators; foreign government counterparts; and a network of international hemp industry association counterparts," according to NIHC'S press release formally announcing the agreement. "Foreign governments understand that NIHC is now supported by the U.S. government and represents U.S. industry interests," the NIHC release added.

Why Europe and China

NIHC is focusing its efforts on Europe and China because those markets are driving the global hemp market. "Europe has rapidly developed a robust hemp and CBD market," according to the press release. "Europe is also a strong producer of industrial use hemp products with $424 million in industrial product sales. China has led global markets in textiles with almost 80 percent of the $1.7 billion hemp textile market, in 2019."

NIHC estimates that retail sales for the global industrial hemp and products market was $11.1 billion in 2019 and projects the global market to grow to $89 billion in 2025. NIHC bases the figure on an annual growth rate of 52 percent, driven by continued strength in textiles, food, industrial uses, and hemp-derived CBD.

Applying the Agreement

"Currently, NIHC is focusing programming on two areas: trade policy, including standards development, and trade facilitation," Latner tells Hemp Grower.

According to Latner, NIHC will work to "ensure that trade flows are as seamless as possible." That work will include determining tolerance levels and test standards for new products. NIHC is planning to agree on these and other trade issues through agreements with one or more countries.

Trade facilitation will range "from market research to buyer/seller introductions," he says, adding that in the long-term, "we will also engage in trade facilitation activities like trade missions and trade shows." However, NIHC will not focus on overseas trade agreements this year because of the pandemic. Instead, the group will concentrate on market research.