A recent, rather obscure rules change from the EU making it easier to claim subsidies for hemp as a “catch crop” was basically driven by the well-organized
French hemp fiber industry lobby. Special fiber subsidies in the EU were historically given to European flax and hemp fiber growers and processors – with France as a leading source for those raw materials. But due to a lack of demand for these natural fibers in Europe, the subsidies were eventually terminated.
Current supplies of hemp fiber materials come to European markets from source countries where they are produced more cheaply – so cheaply that Euro fiber producers simply cannot compete. Natural hemp fiber production in the modern world only works where national government subsidies flow and labor is cheap. Asia will dominate the sector: Think China now, and India coming on line – leaving Europe at a dead end as far as fiber is concerned. Nonetheless, for now, the French government continues to pay its farmers hemp fiber subsidies, with production mainly going to cigarette papers, for example – which depend on high-quality raw materials. We expect that business to eventually go away as well.
Nonetheless, the amendment allowing hemp as a catch crop could prove – at least for the short-term future – financially beneficial to the owners of hemp fiber varieties in Central Europe, who could, in addition, justify getting EU payouts in the form of carbon credits because hemp cultivation is proven as an effective method for sequestering carbon from the environment.