The parliament in the Australian state of Victoria has agreed to look into opportunities to expand the local hemp industry, which stakeholders say could take up some economic slack after the government announced it will shut down native logging at the end of this year.
A parliamentary group met last week with stakeholders who urged the state to support hemp farming for such products as building materials and food, which they say could supplant jobs and revenues that will be lost to the timber industry in the state, located in the southernmost tip of Australia’s mainland.
While the state’s hemp industry is minuscule now – only six farmers are growing fewer than 200 hectares of hemp in Victoria – proponents say planting 5,000 hectares of industrial hemp per year could result in the production of 50,000 tons of hemp hurd and fiber for natural building materials as conventional materials have been in short supply, driving up prices.
Logging no longer viable
“The foreclosure of native logging makes a hemp inquiry critical so that Victoria can meet its growing need for building materials and fiber pulp,“ MP Rachel Payne of the Legalise Cannabis Victoria party told the Pakenham Star website.
The state’s native logging ban took many Victorians by surprise. In shutting down the estimated AU$110 million (US$73 million; €68 million) industry, the government cited concerns over deforestation and loss of biodiversity, and said the cost of compliance with environmental regulations has made it no longer economically viable.
Several things need to happen before a full-fledged hemp industry can get going in Victoria, stakeholders say, beginning with an overhaul of overly strict regulations and costly monitoring requirements. And policies that prioritize safety, quality, and sustainability are needed to generate confidence among investors and producers. In the construction industry, regulations and building standards that meet consumer expectations and insurance requirements are specifically needed.
Infrastructure needed
That’s not to mention the infrastructure the state’s nascent hemp sector would need for fast expansion.
“Once the government formally legislates for industrial hemp it will spur economic growth, generate employment opportunities, and drive innovation,” said Darren Christie, president of iHemp Victoria, a trade group. “Those in the industry are ready to go. We just need the government to do its part.”
“There’s so much demand for hemp, but it’s always companies that want it in large volumes,” Matthew Box of Pro Hemp, a Melbourne company that grows, processes and supplies hemp, and develops hemp processing technology, told ABC News.
Gippsland, a region in the southeastern part of the state, would be an ideal place to set up an industrial hemp hub to replace the timber industry, according to Christie. The region, a major source of wood for the construction, furniture and paper industries, stands to lose as much as $200 million in revenue and 1,639 jobs when the native timber ban takes effect. Locally produced green construction materials could help to fill that gap.
The economics
Such regional hubs are needed to reduce the transportation costs of hemp, which is light but bulky. Regional production chains can reduce emissions, promote local economic development, and ensure the quality and safety of industrial hemp products, according to a study by a team of researchers from Canada’s University of Guelph that was published last year.
The federal government has said industrial hemp has the potential to be a valuable tool in the fight against climate change across Australia, where farming contributes roughly 13% of CO2 emissions. Australia has set a goal to reduce overall emissions to 26-28% below 2005 levels by 2030 under the Paris Agreement on climate change.
Australia has a carbon credit scheme for agriculture, the Emissions Reduction Fund (ERF), a government-backed scheme that provides financial incentives for projects that reduce greenhouse gas emissions or increase carbon storage. Hemp fields across all of Australia totaled just less than 2,000 hectares in 2021-2022, with income pegged at AU$6 million (US$4.8 million; €4.4 million), according to Agri-Futures.