Growing Hemp on a large commercial scale

Craige Mackenzie is a second generation arable farmer on the 300 hectare farm near Methven. He produces a large array of specialist seed crops including hemp, triticale, ryegrass, wheat, carrot, onions, broccoli, swedes, parsley, white clover, radish, red beet and oats. He also trades in cattle and lambs.

The farm is mainly flat and is irrigated by a Centre Pivot irrigator, big gun and wide border dykes. It has a mixture of heavier Mayfield soils and lighter Hororata stony soils. Mount Hutt is close by and is easily seen from the farm. It provides a spectacular backdrop to the day to day activities.

Craige presents an excellent example of the diversity in arable operations today and the knowledge needed to balance so many specialist crops. He was one of the first farmers to trial hemp and to now grow it as a commercial crop.

Oil Seed Extractions Limited (OSEL) was established by Midlands Seed Ltd in 2002 to produce a wide range of seed oils for domestic and international markets. Originally it was a joint venture company but since April 2004 it is solely owned by Midlands.

Through Midland Seeds involvement in hemp trial work and now commercial production of the crop OSEL has become the only company in New Zealand to produce large amounts of hemp oil.

All of the hemp oil is produced by cold pressing in the companys purpose built 4500 sq foot factory in Ashburton. They specialise in providing bulk quantities various oils in 200 kg lots or more for distribution as a health supplements in capsule or liquid form.

Until 2001 it was illegal to grow hemp (botanical name is cannabis sativa L) in New Zealand. Pressure from the arable industry and NZ Hemp Industries Association resulted in the introduction of the Misuse of drugs (Industrial Hemp) Amendment Bill to Parliament. The bill was an attempt to legalize the production of hemp for industrial purposes.

In 2001 the Government announced it would allow two years of trials between the introduction and first reading of the bill and a handful of licenses were duly issued to interested parties wishing to grow the crop.

Mid Canterbury specialist seed firm Midlands Seed Ltd, in conjunction with Craige Mackenzie, were some of the first licensees and started trials on farms in Pendarves and Methven.

Midlands Seed Ltd purchased Ashburton company Oil Seed Extractions Ltd in 2002 and use the company to further process and market hemp seed oil.

The 2005 harvest marks the first large scale commercial harvest of hemp in New Zealand with most of it (100 hectares) being undertaken by Midlands Seed and its farmers.

Hemp seed oil has long been praised for its health giving properties. The oil contains the essential fatty acids (EFAs) of Omega 6 and Omega 3 in the ideal 3:1 ratio that the human body requires. EFAs are important for the proper functioning of the immune system, brain health, wound healing and for insulating nerves. Humans can not make EFAs - they need to be present in our diet.

Hemp seed oil also contains up to 5% gamma linolenic acid (GLA) which has a strong anti-inflammatory effect and is effective in reducing symptoms of PMT, eczema and acne.

Back in 2002 the then Australia New Zealand Food Authority rejected hemp as a food but New Zealand gained an exemption to allow the industry to produce and sell hemp seed oil. However by products of the plant are not allowed to be used. This means the crop does not offer as competitive a return as it could to growers because dry crushed seed cant be converted to flour or pasta. It is hoped when the bill is finally amended that this restriction will be lifted to offer further opportunities for the crop.

Particular varieties of the plant are suitable for apparel, upholstery and building construction. Hemp cloth screens out around 95% or harmful UV rays and has excellent breathability and humidity absorption qualities.

Craige Mackenzie was heavily involved in the initial cultivar trial of hemp in which fasamo was chosen. The cultivar is grown successfully in Canada where it thrives in the hot summer climate. It is grown over 120 day period and has performed reasonably well over the past four years. Canterbury is considered an ideal environment for producing seed oil because of the daytime temperature range with warm days and cool nights.

Some key factors that Craige has found to be critical to growing a reasonable hemp crop:

- Planting in a stale seed bed is important because of the lack of herbicides that can be used in establishing the plant

- Soil temperature needs to be high at planting to help get the hemp off to a good start

- From Craiges experience the plant does not enjoy being too wet - a wet season or over watering can reduce yields.

- Birds can be a major problem as in the case of some recorded trials where the hemp has been virtually destroyed. To lessen these problems Craige advises not to plant hemp in a paddock completely surrounded by trees and to use bird scaring devices and to consider a relevant planting date to avoid bird pressure.

Prior to New Zealand trials top recorded yields worldwide for the cultivar fasamo was around 700kg/ha. However in the first year of the trial (2002 harvest) Craiges crop yielded 720kg/ha. Last year (2004 harvest) that yield had grown due to better management and knowledge to 820kg/ha.

It is felt with growing knowledge the crop may be able to yield up to a tonne a hectare in New Zealand conditions.

Currently for a hemp crop yielding 800kg/ha and paying $3 kg farmers could expect a gross return of around $2400/ha.

Input costs are not excessive. Craige puts on Cropmaster 15 at planting and follows it with Urea at bolting time.

This years crop has had two waterings and a precautionary fungicide which is generally not required.

Overall input costs were around $560/ha this season excluding harvesting costs, leaving $1800.00 as a net return to farmers.

Andrew Davidson, Business Manager for Oil Seed Extraction Ltd, believes the industry is at a critical stage. OSEL would like to further process the seed cake into flour or vitamin supplements.

Utilising the by-products would add value to the crop and make it a better financial proposition for farmers.

However the Government has delayed legislation to pave the way for this to happen and it is unclear when it will be put back on the table.

Until then both Craige and Andrew believe the crop offers more than just financial viability because it offers another option to farmers and therefore lessens risk across their financial operation.

Currently protocols are in place to ensure that cannabis does not appear in amongst hemp plants in the paddock by those looking to produce for the drug market. Craige advises Police of any visitors that need to see the hemp.

The police then check that the visitors dont have a police record. Once in the paddock they have to be signed in and out. THC (tetrahydrocannabinol) levels are tested and must not be over 0.35%. Since the first trials began there have been only a small number of problems among trial paddocks with most THC levels averaging between 0.01% and 0.04%.

However, Craige believes that stringency needs to be maintained in order to protect the fledgling industry. One slip up could cause the Government to review their support for the industry.

Because of this, Craige recommends that, as the industry expands and the number of farmers producing hemp seed oil grow, the seed companies involved and the Police should screen the farmers for their suitability for growing the crop.

License fees are expected to rise to $500 this year which Craige feels is too high. He believes there are already enough charges in the system and wants to see the fee remain at $11.

Andrew Davidson believes a suitable cost should not encroach on the economic feasibility of the hemp production process but should be significant enough to deter anyone with non-legitimate interests in the production of hemp.