Namrata Hemp Company (NHempCo), a Bangalore-based start-up established in the year 2016, is promoting the cultivation of industrial hemp in the southern states of India. The eponymous company founded by Namrata Reddy Sirupa and Harshaavardhan Redi Sirupa is working with state governments to create a raw-material sourcing platform for companies manufacturing hemp-based products. The creation of such an ecosystem is expected to facilitate ease of doing business for companies using the raw material in the textile, auto-component, construction, food, and wellness sectors.
Industrial Hemp (hemp) is made up of varieties of the Cannabis Sativa plant that contain less than 0.3% Tetrahydrocannabinol (THC). The plant finds uses in more than 25,000 products, from fibers, textiles, paper and construction materials to beauty products, food and beverages.
Sativa-As-A-Service Under the aggregation ecosystem, NHempCo will supply low-THC industrial hemp seeds to the farmers for free, procure the harvested crop from the farmers, process it, and supply it to manufacturers. In this model, the downstream manufacturers will not have to worry about the quality, consistency, and availability of the industrial hemp raw material.
The founders expect the farmer to earn a profit 1.5–2 lakh (150,000–200,000) INR per acre of land by cultivating three crops a year.
The company is initially looking at cultivating the plant in arid and semi-arid regions of Andhra Pradesh and Telangana.
NHempCo proposes to set up hemp processing plants every 100 sq. km. It is in the initial stages of setting up a hemp farm in Alamuru, a small village in Andhra Pradesh. Fifteen acres of the 27-acre farm will be used exclusively for cultivating industrial hemp while the remaining twelve acres will accommodate warehouses, processing units, testing centers, and R&D facilities.
On the 16th of May this year, NHempCo released its Hemp Ecosystem White Paper in Telangana. It plans to set up a unit in either Nalgonda or Mahboobnagar district of Telangana, following approval by the state government.
“Within five years of approving the pilot project my target is to reach at least 10 percent of the total agricultural land and 30 percent of the drylands in the states,” said Harshaavardhan Redi Sirupa.
He envisions the creation of about 10 million jobs and 200 industries through this ecosystem by 2030. This is expected to address social issues like poverty of the farmers, scarcity of jobs for the youth, and widespread malnutrition.
Cotton versus Hemp
With an estimated precipitation requirement of 500–700mm per growing season [*], hemp could prove transformative in South India’s arid and semi-arid landscapes where the agrarian crisis is predominant.
Farmer suicides are a contentious issue in India. The southern states of Andhra Pradesh, Telangana, Karnataka, and Tamil Nadu are in the top ten in terms of a number of farmer suicides in India (as per provisional data by the Union Agriculture Ministry in 2016). India has not published data on farmer suicides for the last two years [*]
In recent years, farmer suicides have been attributed to cotton farming.
India’s farmer suicides: are deaths linked to GM cotton? (Source : The Guardian)
Why India’s cotton farmers are killing themselves (Source: CNN)
Cotton vs Hemp — Land, Water, and Pesticide
“In India, the yield is 500 Kg per hectare on average wheras in Australia the yield is 1.9 tonnes per hectare. This means that our soil is not suitable for cotton,” said Harshaavardhan Redi.
In 2016, Telangana was the first to discourage the cultivation of cotton. Andhra Pradesh followed suit in due to the pink bollworm developing resistance to Bollgard II technology causing 30 % drop in yield.[Source: The Hindu, Jul 12, 2017 *]
While some states react to the agrarian distress with costly debt waivers, the Telangana government has a scheme under which farmers in the state will be given Rs 4,000 per acre twice a year to cover the costs of major inputs such as fertilizers, seeds and pesticides.
India is the world’s second-largest exporter of cotton, but there are some big challenges: Modern conventional cotton cultivation relies on pesticides and herbicides which are improperly, excessively, and dangerously applied in underdeveloped countries, and might have contributed to the worldwide decline of insect populations. And then there is the suicide epidemic among poor cotton farmers. One study shows that small-scale cotton farmers who try to rain-feed their genetically modified cotton are more likely to be sucked into a cycle of debt and commit suicide.
Though India banned the production and supply of the cannabis plant in 1961 by signing a UN treaty under pressure from the USA [*], the Narcotic Drugs and Psychotropic Substances Act, 1985, actually allows the cultivation of hemp for horticulture and industrial purposes.
State governments have special powers to issue licenses for cannabis cultivation for industrial purposes. Cultivation of industrial hemp is presently restricted to Himachal Pradesh, Uttarakhand, Uttar Pradesh and Madhya Pradesh.
A 5% Goods & Services Tax (GST) rate is applicable on hemp in India. [True Hemp Raw Or Retted (HSN Code 53021000) and True Hemp Yarn (HSN Code 53082000)]
Internationally China is the largest producer of hemp products, followed by Europe, Canada and USA. [*] According to a report from the Brightfield Group, a Florida-based analytics firm, it is expected to become a billion-dollar industry by 2020 in the US alone.
The stalk of the hemp plant is used to make textiles, rope, apparel, shoes, upholstery, composites, packaging and hemp seed can be used to make oil, flour and animal feed.
NHempCo has already established a luxury brand of hemp-based beauty products — Satliva.
The oils, creams and soaps are made by the company only after they receive an order for it. This is done to ensure freshness, as natural ingredients are used which do not have a long shelf life.
Presently the company sources its raw materials from Uttarakhand, Himachal Pradesh and Madhya Pradesh. “I have tied up with the farmers who grow hemp there. This is legal in these states. The seeds are sold to the state governments, who in turn auction them,” he said.
The company is selling its products on Amazon and its own website. The orders are directly fulfilled by the company due the the process it follows. The founders also have more altruistic goals of ‘introducing a healthy, toxin-free and pollution-free consumer culture in India.’
Analysis from Persistence Market Research indicates that the global natural and organic personal care products market will be valued at $21,776.9 million by the end of 2024, with a CAGR of 8.8%. According to Euromonitor International, the beauty and personal care market in India is expected to reach INR 92,790 crores in 2021 from INR 85,170 crores in 2018. The herbal and ayurvedic segment is estimated to be 31 percent of it.
The Hemp Startups
Other companies working in the industrial hemp space in India include Bombay Hemp Company (BOHECO), B.E. Hemp, Hemp Cann, Hempster
Bombay Hemp Company has raised about $1m from a group of investors including Ratan Tata, Chairman Emeritus, Tata Sons and Rajan Anandan, Managing Director, Google India.
According to a CB Insights report [*], funding to cannabis-centered startups has ballooned in the past two years, up over 90% since 2014 despite a slight decrease in 2016’s investment levels. “While private investment to the industry remains siloed among a select group of cannabis-focused investors, institutional investors such as Founders Fund, Y Combinator, and 500 Startups are slowly taking notice,” states the report.
Disclaimer: This article is originally published on https://nhempco.com/