Savills : Making hemp mainstream in the UK

The Anglo-French relationship is a complex one and it would not be unfair to say a healthy rivalry exists between us.

Take hemp, for example. Faurecia, a French automotive supplier, has created hemp-based biomaterials that are finding their way into everyday life. The Peugeot 308, Alfa Romeo Giulia and Jaguar E-Pace all use its hemp products. This innovation is a small part of the market but France is poised to seize the opportunity. The UK barely grows any hemp at all and is woefully behind.

Hemp is regarded as those plants containing no more than 0.2 per cent tetrahydrocannabinol (THC), the psychoactive component of cannabis (cannabis plants are those containing more). Most of the hemp grown in France goes into fairly mundane industrial uses, but that belies the innovation that is breaking through into commercial use.

Reform regulation

So must the UK concede defeat? We are certainly down, but not out as there are no significant obstacles to planting more hemp. A licence is required but will last for three growing seasons and is applied through a 'light touch regime'. Most applications will not require a site visit but that's not to say regulations can be forgotten. There are examples of entire crops being destroyed due to a lack of compliance and so hemp would clearly benefit from a relaxation in regulatory conditions.

A crop association (CA) could be the first step to achieving this and unleashing the potential of hemp. Led by growers and financed through a levy, it would act to promote hemp, lobby for improved regulation and direct research and knowledge transfer. Far from simply placing us on level terms with our continental competitor, a CA could be a means of enhancing the offering of British hemp above and beyond.

The problem of processing

The main restriction on UK hemp arises after the crop has been harvested. Limited expertise and a lack of processing and manufacturing capability in the UK means little can realistically be created from hemp except animal bedding and cooking oil. Fixing this bottleneck will be essential in encouraging both adoption and innovation around the crop.

Don't believe me? Look across the Channel. Legislation, attitudes and growing conditions for hemp are remarkably similar. Processing capacity and expertise are where the differences lie - and it is those differences that have allowed France to accelerate beyond all European rivals. But investors are not going to build processing plants without a crop to process and growers are not going to grow a crop without a way to process it.

A contractual approach has been key to bringing niche crops into the mainstream in the past. Investors establish a processing facility and contract out the growing operation. The grower will likely require an incentive to take on the risk but that can be provided through fair pricing. Providing expertise on how to navigate the licensing process and grow the crop will also help to mitigate risk.

Collaborate and conquer

A coalition of like-minded growers would be the most powerful force for change. Producer organisations (PO) are currently reserved for horticultural crops but the Government announced a desire to expand the concept to other areas. A list of these areas was included within schedule one of the Agriculture Act, but makes no mention of non-food crops. This not only neglects the opportunity of hemp but the entire nutraceutical market. Fortunately there could still be change when the concept is put to consultation.

A PO would provide hemp and those who wish to adopt it with multiple benefits. The scale of a PO permits them to hire technical and business management specialists, resolving the expertise issue. It permits greater vertical integration; that means shorter supply chains, reduced costs and greater collaboration to ensure an enhanced output that is beneficial for all parties. Growers can capture some of the additional value conferred by processing and assume a stronger position in the marketplace. That position is more acceptable given a PO is exempt from certain competition laws.

No one of these solutions needs be adopted in isolation. Indeed, simultaneous establishment will lead to a more rapid uptake of hemp. But ultimately it falls to the UK to employ that entrepreneurial spirit that this 'nation of shopkeepers' is renowned for.

Further information

Contact Joe Lloyd

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