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New Farm Bill Legalizes Hemp in Land Real Estate Industry

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By now, most people know that hemp became legal in America after the 2018 Farm Bill was signed on December 20th, 2018. However, there’s a lot more to the new law and legal hemp itself than meets the eye. Let’s take a look at hemp, its benefits, and the details of its current legal status under the 2018 Farm Bill.

What Is Hemp?

For those of you that are green (no pun intended!), hemp is the non-psychoactive variety of the Cannabis Sativa plant. Hemp gets confused frequently with marijuana. The biggest difference is that hemp has a very low THC (0.3% or less) while marijuana contains concentrations between 15%-40%, a much more potent dose that lets users have that “high” feeling.

What Makes Hemp Stand Out?

Hemp is used for fuel, fabrics, oil, plastics, animals feed, building materials, paper, and more. You can even eat it, although the taste is unpleasant. In fact, there are over 25,000 known uses for hemp!

Hemp is a fast growing, low maintenance crop. The plant requires less water, fertilizer, and herbicides than many common crops, making it a great option for farmers looking to save a little money or reduce their carbon footprint.

Hemp is green in more than one way. Hemp takes in more CO2 as it grows and naturally rids the soil of toxins, making it an excellent crop for bioremediation. After the harvest, the remains break down into rich nutrients for the soil.

What is the current ruling?

The Hemp Farming Act of 2018 (whose provisions were included in the 2018 Farm Bill) let hemp farmers apply for federal agricultural grants, own crop insurance for the plant, and have access to the national banking system (an issue for marijuana in states even where it is legal). The 2018 Farm Bill removed a lot of hoops that hemp growers used to need to jump through. Removing the gray areas surrounding the plant and allowing hemp farmers access to the same tools as other farmers will make it easier and more profitable for people to grow hemp. 

Just because hemp is legal doesn’t mean everything is cut and dried surrounding the plant. While the 2018 Farm Bill removed hemp and products made from hemp from the Schedule 1 Drug List, the FDA still has regulatory authority over all CDB in food and drugs. Testing protocols surrounding how much THC and CBD is in each plant is still up for debate, as different testing methods can sometimes produce different results.

A recent report from the Brightfield Group expects that the United States CBD market will be worth $22 billion by 2022. If you’re considering branching out into new crops, hemp might be a great option for you.

Be sure to tune in to the Industrial Hemp- Impacts to Real Estate non-LANDU course being held by the RLI Oklahoma Chapter on May 9th with facilitator Kirk Goble, ALC.

About the Author: Laura Barker is a freelance writer based out of California for the REALTORS® Land Institute. She has been with RLI since October 2017.

Farm Bill Passes House and Senate, Heads To President Trump’s Desk

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After passing both the House and Senate, the Farm Bill (also known as the Agriculture Improvement Act), is headed towards President Trump’s desk for his final seal of approval. The President is expected to approve the bill, saying yesterday that the bill is in “very good shape”.

The bill was overwhelmingly approved by the House, passing by 369-47, after being passed by the Senate on Tuesday.

If this Farm Bill gets President Trump’s final signature, the bill will renew crop insurance and expand the acreage of the Conservation Reserve Program. The bill will also allocate $225 million towards “Agriculture Trade Promotion and Facilitation”, which will help ease the financial impact on farmers during tariff wars. Overall, the Farm Bill is expected to cost $867 billion.

Land and Congress: Just The Facts

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It seems like the more news there is, the harder it is to find out the facts. Important news about land legislative issues, such as tariffs and WOTUS, can get lost in a sea of opinion pieces. Let’s take a look at the simple facts surrounding five of the most pressing issues in the land industry.

Waters of the United States (WOTUS) rule

WOTUS is one of the most controversial land legislative issues in the land industry. This law was written to clarify water resource management but sparked a debate about property rights.

“Many (wetlands) are already covered under the Clean Water Act,” said Russell Riggs, RLI’s Government Affairs Liaison for  the National Association Of REALTORS® (NAR) and Senior Regulatory Representative for NAR, in an interview with REALTOR® magazine. “This expands it beyond navigable waterways to little streams, ditches, and isolated wetlands that were never really intended to be covered by the Clean Water Act. WOTUS would sweep in thousands of smaller water bodies under the authority of the Environmental Protection Agency and now you’re talking about all kinds of different permitting, regulatory burdens, as well as infringements of property rights.”

Many land organizations, including RLI, opposed the rule and have been avid advocates for its repeal and reform. In response to the land industry, the Trump Administration put the rule under review. At time of publication, WOTUS has been revived in 26 states.

Russell Riggs will be speaking on key land legislative issues at the 2019 National Land Conference in Albuquerque, NM, giving an update on the latest legislation affecting the land real estate industry.

The 2018 Farm Bill

On September 30th, 2018, the 2014 Farm Bill expired. The Farm Bill expired because Congress couldn’t reach an agreement on the many influential land legislative issues that this bill governs, such as:

This bill covers dozens of incredibly important and complex land legislative issues. Changes made to this bill will impact every corner of the land industry. Landowners, investors, and consumers will all be impacted. It’s important that your representatives in D.C. hear what you have to say about the Farm Bill. RLI has a strong voice in D.C., thanks to our member-driven Government Affairs Committee and by keeping members informed on the latest land laws in blog posts, social media, and D.C. Updates.

Update: The Farm Bill Passed

Tariffs

Tariffs are a tax a country puts on a product made abroad. The intention is to motivate Americans to buy local products at a cheaper price. At the time of publication, there is a ten percent tariff adding up to $200 billion on Chinese imports. President Trump is expected to raise tariffs in the future.

In retaliation, China imposed tariffs on American products, including soybeans, pork, milk, fruit, and many other crops. Soybeans, in particular, have struggled. The Chinese tariffs have driven soybeans prices down and some soybean farmers are struggling to pay the bills.

“Farmers see that pain right now,” said American Soybean Association CEO Ryan Findlay in an interview on CNBC. “You have to have the prices to pay the bill — and the prices aren’t there right now.”

During a record production year, many farmers are storing soybeans in the hopes that the trade war will soon end.  The long-term impacts, good or bad, are unknown right now.

Bailout

To help ease the economic stress of the ongoing tariff war, the USDA authorized a $12 billion bailout plan for farmers.

Farmers who met the criteria would receive incremental payments from USDA programs. The first $6 billion was distributed in late August. Additionally, the USDA’s Agricultural Marketing Service (AMS) set up the Food Purchase and Distribution program to buy $1.2 billion in American goods that were impacted by the tariffs.

Endangered Species Act

In an 8-0 vote, the Supreme Court ruled to limit which habitats can be protected under the Endangered Species Act. The central point of the debate was if lands where endangered species weren’t currently living, but might one day, protected under the law.

“Only the ‘habitat’ of the endangered species is eligible for designation as critical habitat,” the chief justice said highlighting how the scope of the law as written now is limited. “Even if an area otherwise meets the statutory definition of unoccupied critical habitat because the secretary finds the area essential for the conservation of the species, [the law] does not authorize the secretary to designate the area as critical habitat unless it is also habitat for the species.”

Staying up to date on land news is tricky, especially when so many key land legislative issues are always being updated or debated. We hope this article offered a no-nonsense look at the current state of several pressing land laws. If you’d like to get more involved with the Advocacy side of RLI, consider applying for our Governmental Affairs Committee and make sure to check back regularly to our DC Updates page for the latest news about the latest legislative issues affecting the land industry. Remember – your voice deserves to be heard in Congress!

About the Author: Laura Barker is a freelance writer based out of California for the REALTORS® Land Institute. She has been with RLI since October 2017.

From Inside The Beltway

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With the biggest legislative achievement of this Congress behind us – tax reform and the preservation of 1031 like-kind exchanges – there are other issues that are circling the congressional runway, jockeying for position and waiting to land.  While not having a direct impact on the land professional, these broad issues could have far-reaching secondary impacts on land markets, real estate development and the economy.

Farm Bill Introduced But Passage Unlikely in 2018

A 2018 farm bill proposed by House Agriculture Committee Republicans passed by the Committee in April set the groundwork for tense debates on farmland conservation and forestry — and a much more partisan battle on nutrition assistance — as Congress tries to act before the current law expires at the end of September. However, this legislation is unlikely to pass in 2018 due to a decreasing window of opportunity to act on a very controversial proposal.

The bill strikes a good balance by holding the bill’s cost close to the total spending levels of the current version. Doing so allowed the Committee to protect crop insurance, tweak the safety net for cotton and dairy producers, and reform conservation and crop programs.

On the other hand, the committee wasn’t able to boost spending on farm programs that some groups say are more needed than ever, given the tough farm economy.

Significant changes in conservation programs reflected Chairman Conaway’s interest in seeing these programs work more effectively to preserve land that helps agriculture.  The legislation would eliminate the Conservation Stewardship Program — the biggest conservation program in the country, with about 72 million acres enrolled — and move some of its initiatives to an expanded Environmental Quality Incentives Program.

The bill would allow an additional 5 million acres, 29 million acres in total, into the Conservation Reserve Program, which takes land out of production for 10-year periods.

On forest policy, the proposal would allow for bigger and faster forest-thinning projects, through a 6,000-acre exclusion from certain reviews under the National Environmental Policy Act, to reduce wildfire risk. It would also remove a requirement for consultation under the Endangered Species Act if a forest management project does not harm a listed species.

Infrastructure: All Talk and No Action?

Infrastructure effects all parts of the American economy, from good roads and clean water to flood protection and mass transit. Both President Trump and Congress have floated proposals that would provide resources to fix aging infrastructure, such as roads and water treatment plants; and develop new and transformative projects, such as modernizing the electrical grid and high-speed rail.  All of these kinds of activities would have a positive impact on land markets.

President Trump’s plan would incentivize and stimulate at least $1.5 trillion in new investment over the next 10 years, shorten the process for approving projects to 2 years or less, address unmet rural infrastructure needs, empower State and local authorities, and provide for intensive workforce training. The plan addresses more than traditional infrastructure — like roads, bridges, and airports — but addresses other needs like drinking and wastewater systems, waterways, water resources, energy, rural infrastructure and public lands.

The proposal introduced by Democrats in the House would offer 5 times the amount of federal infrastructure funding over the President’s plan.  Their plan would boost local economies and generate billions of dollars in new economic activity without adding to the deficit.  Our infrastructure plan will invest in American iron and steel and new American-made green infrastructure materials to support good-paying jobs, and ensure opportunities for small business owners.  Our plan will ensure projects advance quickly, while maintaining key environmental protections and labor standards.

Both plans are similar – both seek to leverage federal resources to empower the private sector and state and local governments to develop these projects. Both promise to shorten and ease the permitting process and both promise extensive worker retraining.

Would you like to know another similarity between the two plans?  Nothing has happened to either of them since they were published.  Yes, the President has pushed federal agencies to ease permitting restrictions and some individual bill have been introduced, but at this time nothing substantive in this area has been accomplished.

If I were a betting man (which I am most decidedly not) I would not place my hard earned money on a massive infrastructure spending bill moving through Congress in 2018.  Just like with the Farm Bill, Congress is running out of time and lacks the focus to get something like this across the finish line – neither party wants to give their opponents something to brag about in the upcoming elections.

If you would like additional information on any of these issues, please contact me at 202-383-1259, rriggs@realtors.org.

This article originally appeared in the 2018 Summer Terra Firma Magazine, the official publication of the REALTORS® Land Institute.

 

About the author: In his position with the National Association of REALTORS®, Russell Riggs serves as the RLI’s Government Affairs Liaison in Washington, D.C., conducting advocacy on a variety of federal issues related to land.