An EU committee approved language to extend farm subsidies for hemp growers. The move could impact the industry significantly. EU hemp regulations. This is a result of the European CBD industry being subjected to tighter rules, and a reduction in the market value.
In a detailed report by the Regional Development Committee of the European Parliament (REGI), the proposed rule aims to expand subsidies for industrial hemp, including CBD-rich hemp flower under the Common Agricultural Policy(CAP) of the European Union. Histoically, payments under the CAP have been made for years for hemp fiber and grain crops.
Expanding Common Agricultural Policy Eligibility
Valentina Palisano of Italy’s Five Star Movement, who was a key figure behind the policy change and is also a European Parliament Member, said that this expanded rule will classify the entire hemp plant into agricultural products. It is hoped that this reclassification will provide more certainty to farmers, and also allow them to market hemp flowers without making undue distinctions.
According to the REGI report, scientific evidence shows that industrial hemp does not pose a risk to health. This report also cites the Court of Justice of the European Union’s 2020 decision, in which it was determined that CBD (cannabidiol) could not be classified as a drug and CBD products were to benefit from a free-trade agreement across the European Union.
Since the 1990s, the modern framework of the Common Agricultural Policy governs the EU’s treatment for hemp in terms of agricultural subsidies. These subsidies are only available to farmers who have certified low THC varieties. From 1976 until 1999, the THC threshold for eligibility to receive subsidies was set at 0.3%. This limit has since been reduced to 0.2% and reinstated back to 0.3% with the most recent CAP reform that took place in 2023. Payments per hectare under the EU Farm Subsidy Program are determined by CAP Strategic Plans of member states, which vary based upon land type, payment categories and environmental incentive programmes.
Market Dynamics and Regulatory Hurdles
Although the REGI plan is important for reorienting cannabis-like hemp towards agriculture, it will be unlikely that subsidies by themselves can revitalize Europe’s CBD industry. Sector continues to face significant challenges, notably those related novel foods regulations.
In order to sustain a recovery in the European CBD industry, there will need to be clearer long-term regulation, refinanced, and stable outlets developed for hemp flowers outside of the shrinking CBD “wellness market”. The hemp-cannabinoid industry in Europe is being reshaped by structural pressures.
The Legislative process and the Political Context
Voting in the REGI committee is a first step of the EU’s legislative process to amend existing CAP Regulations. Before entering into negotiations with the European Commission or the Council of the European Union, the proposal will have to go through further procedures in the European Parliament. According to interim negotiations and possible amendments, it could take up to a year for the proposal become EU final policy.
In Italy, the proposed changes to CAP are a sensitive issue. Valentina Palmisano’s Five Star Movement is opposed to Prime Minister Giorgia Melons ruling Fratelli d’Italia, who have taken a stance in opposition against cannabinoids and hemp flowers. Palmisano said that Fratelli d’Italia lawmakers tried to block the section of the report which dealt with hemp flowers and cannabinoids, but their efforts failed in committee. Federcanapa (the Italian hemp industry association) acknowledged REGI committee approval with no further comment.
Disclaimer: This article contains only general information and is not intended to be a medical recommendation. Hemp Gazette is not a medical provider and does not offer diagnoses or treatment plans. Before making decisions about your health, or any other medical conditions, always consult with a qualified healthcare provider. The Therapeutic Goods Administration in Australia (TGA) has not evaluated any statements regarding the therapeutic use of cannabis or hemp-derived products. TGA regulations allow Australians to access medical cannabis through prescription.