Hemp Stakeholders Workshop: Feasibility Study

  Shale TInkler     2017-04-19   View all blog articles


On the 24th of April, The National Agricultural Marketing Council (NAMC) hosted a Stakeholders Workshop in Centurion to give feedback on the feasibility study they had completed on behalf of the Department of Agriculture, Forestry and Fisheries.

The feasibility study mostly looked at the results from the Commercial Incubation Research Trial that was conducted over 3 years in the Western Cape, Eastern Cape and Kwazulu-Natal, coordinated by Dr Thandeka Kunene of House of Hemp and permitted by the Department of Health.

As Hemporium had participated in the trial through our farming partner, Rapula Farming, as well as participating in the Hemp Feasibility Study we were invited to hear the results. Due to the restrictive nature of the trial regulations, and the limits of only 2 hectares per site for testing, there was limited data for the NAMC to work with.

The original aim of the trial was to prove the commercial viability of hemp in South Africa, but as Rapula was not allowed to process any of the materials harvested on the site, and for year 2 and 3 did not receive any of the processed material back for market development, it was practically impossible to prove commercial viability.

The NAMC presented 3 scenarios for the data collected:
Scenario 1: Looking at the balance sheet of each site, it would show that each site made a loss during the trial and hemp is not feasible in South Africa.
Scenario 2: Removing the extra trial costs such as fencing, workshops, excessive and expensive THC tests, the trial would have broken even.
Scenario 3: Looking at yields and applying international prices for wholesale seeds, stalks and flowers harvested from the trial, and there would be profit after the 3 years.

There were also considerations to be made including the lack of economies of scale, the challenges of having multiple varieties to trial, and the process around growing some plants for fibre, some for seeds, and some for biomass.

We commented that we felt that the trial conditions were way too restrictive to ever prove commercial viability on an industrial level, and that South Africa needs to move from agronomy research to participatory research, which is what the Canadians did nearly 20 years ago. Participatory research means that farmers log every single activity from permit application, site location, variety planted, all agronomy data, harvest yields etc., and then submit that to the Government researchers so that the industry can be streamlined and developed.

Canada is now growing close to 70000 hectares of hemp while South Africa has still stagnated in research and have fallen way behind countries that started research at the same time or later than us, such as Australia, New Zealand, Canada and the UK.

The debate at the workshop got quite heated at times as the frustration of various stakeholders who believe that this industry is being unnecessarily held up and that opportunities are being lost became evident, but the general tone was one of looking forward on how we can propel industrial hemp in a commercial and sustainable industry in South Africa. It was advised that the industry formed an association to speak together to the government, and plans are in place for this to happen.

While we are excited to see the renewed interest in hemp, we too are eager to see this research deadlock broken and to see farmers and communities being able to grow hemp locally so that we as Hemporium can support local farmers and industries instead of China, Canada, France and the UK where our raw materials currently come from.

We thank the NAMC and DAFF for their efforts so far, and are committed to working together to see a hemp industry in South Africa become a reality.