Getting to the Root of the Issue: Decline in the Hemp Market

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AAEA members research published in AEPP

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With the only relation being that both are from the cannabis family, what kind of regulatory constraints played a role in the change from the recent Farm Bill?

By the end of World War II, the USDA was promoting hemp farming as part of a farmer’s patriotic duty but by the end of the 20th century there was effectively no hemp production anywhere in the country. The decline of the hemp markets correlates to the war on marijuana. With the only relation being that both are from the cannabis family, what kind of regulatory constraints played a role in the change from the recent Farm Bill?

Trey Malone from Michigan State University as well as Kevin Gomez from Creighton University co-authored the article “Hemp in the United States: A Case Study of Regulatory Path Dependence,” published in the Applied Economic Perspectives and Policy. They evaluate the market through the institutional lens of path dependence and why the modern area makes for an optimal time to legalize hemp production in the United States.

Malone says, “There is no well-established supply chain in the United States. Perhaps more importantly, though, there has been such limited funding for agricultural research on the crop over the past few decades. This means that the assistance that can be provided by land grant universities is significantly limited. Now that we have legalized the crop, we need to be proactive about funding research for big questions such as breeding programs and market analysis.”

The article is openly available online for a limited time. If you are interested in setting up an interview with Malone, please contact Allison Scheetz in the AAEA Business Office.

ABOUT AAEA: Established in 1910, the Agricultural & Applied Economics Association (AAEA) is the leading professional association for agricultural and applied economists, with 2,500 members in more than 60 countries. Members of the AAEA work in academic or government institutions as well as in industry and not-for-profit organizations, and engage in a variety of research, teaching, and outreach activities in the areas of agriculture, the environment, food, health, and international development. The AAEA publishes two journals, the American Journal of Agricultural Economics and Applied Economic Perspectives & Policy, as well as the online magazine Choices. To learn more, visit http://www.aaea.org.

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