USDA’s Foreign Agricultural Service Agrees (6 Nov 2020) To 12 Month Marketing Cost Share Program With National Industrial Hemp Council

Hemp Grower reports…

The hemp industry is taking a significant step towards the international marketplace through a federal cost-sharing agreement supporting both a global marketing strategy and individual companies’ relationships with overseas purchasers.

The U.S. Department of Agriculture’s Foreign Agricultural Service agreed on November 6 to a one-year cost-sharing agreement with the National Industrial Hemp Council (NIHC) and individual hemp companies. The two-part agreement includes a generic marketing and promotion agreement providing matching funds for NIHC research to develop an international market presence. There is also a branded products program where hemp companies can obtain financial support to establish a market for their products.

Generic Marketing and Promotion

The agreement will first provide the financial resources for NIHC to undertake an extensive study of foreign markets to maximize companies’ opportunities. For example, the NIHC will determine where it should focus on its member’s products and what foreign regulations might be problematic.

This agreement is significant because it demonstrates the federal government’s recognition of hemp’s potential, Kevin Latner, NIHC’s senior vice president for trade, says.

USDA sees that “we are now in a global trade environment with respect to hemp products,” he says. “It’s an opportunity to compete internationally as being one of the leading agricultural countries in the world,” adds Latner, who is the only hemp industry representative on the agency’s Agricultural Technical Advisory Committee. The committee offers technical advice and information about specific agricultural commodities and products to the Secretary of Agriculture and the U.S. Trade Representative.

The agreement’s total amount is not available as the USDA has not yet formally announced the deal, Larry Farnsworth, NIHC’s senior vice president for communications and marketing, says. However, that information will be available early this week when the USDA announces the agreement. Hemp Grower could not reach the USDA for comment by press time.

Latner anticipates a tremendous return on investment, noting that these cost-sharing agreements have historically provided up to a 35 to 1 return on dollars invested. He expects an even more significant return because of how new the hemp industry is and how many opportunities are likely available.

Under the agreement, the NIHC must contribute a minimum 10% match on the dollars it receives. The Food Export Association of the Midwest USA, a non-profit that promotes the export of food and agricultural products from the Midwest, will distribute the funding.

Brand Promotion

NIHC will also provide oversight and support for individual hemp companies who receive matching federal funds under this agreement. These funds are used for companies to market their products directly to international purchasers. Those funds can, for example, be used to attend international trade shows and for other means to build relationships with potential purchasers. Companies must provide a dollar-for-dollar match for the money they receive.

The funds are specifically meant to help the industry take new steps to increase its market presence. “It’s really about expanding markets beyond what the industry can already do now,” Latner says.

He adds that such an agreement is incredibly valuable for the hemp industry because the sector is so new, and there is so much to learn. “None of us are quite sure where those best opportunities are, so it’s going to be really valuable to have this kind of partnership” with the federal government, Latner says.

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