Industrial hemp in Southern Africa, a growing sector

Industrial hemp cultivation is booming worldwide, although limited to a small area (barely 200,000 hectares). In southern Africa, it is in its infancy, with promising development prospects pending the construction of a solid value chain.

A discreet but strategic production in France

If one production still remains discreet in France in the eyes of the general public, it is that of industrial hemp. [2] which nevertheless makes France the European leader in production with 38,% of European hemp areas in 2024 according to Interchanvre, the interprofessional organization of the sector. At the global level, France is positioned 3^th rank of producers after China and Canada. Hemp cultivation occupies only 24,000 ha in 2024 in France (compared to more than 8.5 million ha of cereals) but covers between 10 and 15 % of the agricultural rotation of hemp farmers.

Hemp is an interesting plant production in terms of sustainability. An excellent crop rotation head thanks to its deep roots, it does not require phytosanitary products. It consumes little water and captures CO₂ at a rate of 9 to 15t/ha/year according to Interchanvre. It is also a perfect profile for energy sobriety plans, particularly due to its insulating properties in construction. The outlets are also multiple, ranging from paper to construction, insulation, mulching or even cosmetics or biomaterials, plastics, food and textiles. However, hemp plants (factories of 1^era processing) cannot satisfy markets with growing demand, thus encouraging, year after year, new investments, including recently that of Planète Chanvre for €15 million, east of Paris, with the aim of tripling the hemp processing capacity in 5 years, going from 5,000 to 16,000 tonnes per year. We also note the start-up of new production areas with Berry Chanvre, for example, alongside the large operators Cavac and la Chanvrière or others, in the southwest, such as Virgo Coop. These companies have solid experience and expertise, which they could share with other players and countries where hemp is developing.

Hemp, a promising crop for southern Africa

In some countries on the African continent, particularly in South Africa, hemp is seen by government authorities as a plant to be developed for its significant market opportunities but also as an opportunity to involve small producers in dynamic sectors (see the interview with Davison Chikazunga at the end of the article).

Thanks to a FASEP [3] A group of French experts (specializing in agronomy, genetics, processing, and markets) provided support and expertise for the development of this emerging sector in South Africa. Following the diagnosis, these experts provided recommendations, whether in terms of production areas, genetics, processing, and especially the organization and construction of the different value chains (seed, fiber, or hemp shiv) to meet the demands of specific markets. The hemp sector has the particularity of being "industrial," in the sense that it requires not only suitable harvesting equipment, but also primary processing plants (a hemp farm) containing a decorticator, and finally technology for a secondary processing into the finished product. France, for example, has an efficient integration and organizational model with seven hemp farms spread across the country.

With hemp, there is no shortage of outlets and South Africa has been banking on this production for several years through a Master plan that the country wishes to fully deploy. Promising prospects are emerging in the construction sector in particular, since buildings made of hemp bricks already exist, for the moment built mainly with imported hemp. Other initiatives are starting in cosmetics and food. Other countries in the southern zone have also authorized the production of hemp, such as Botswana, Malawi and Zimbabwe.

Developments in South Africa, and elsewhere in the region, are constrained by the need to align the links in the value chain all the way to finished products. It is essential to consider the upstream process, including research, regulations, technical itineraries, production areas, the hulling tool, and, of course, delivery to end customers operating in a solvent market.

This raises the question of how to sustainably build all the pieces of a puzzle to create a sustainable sector. As indicated in the FASEP mission's recommendations, this is built in small steps to gain expertise and know-how over the long term. In Southern Africa, sharing experiences can clearly accelerate skills acquisition.

Building a technically and economically viable sector

There are numerous hemp-related initiatives and projects in South Africa, ranging from seed selection and producer training to small-scale processing and technical and technological trials across the country, particularly in three production areas: Gauteng, KZN, and Eastern Cape. The country has universities working on hemp-related topics and a fiber technology research and development center in the Eastern Cape capable of providing technological solutions to meet market needs. The next phase of building the value chain needs to be solidified to meet the demand of the market, which will trigger production and organization upstream. Public funding is a lever for implementing pilot projects that validate technical itineraries in the field, allowing for the calculation of production costs and, ultimately, the feasibility of investments. The latter are expected to develop projects in promising sectors such as cosmetics, food, construction and textiles, where investors must be reassured about the solidity of the sector.

Large farms are interested in incorporating hemp into their crop rotation, while small producers have already begun cultivating it on a small scale. Research and development organizations are exploring potential markets and working on varietal selection. The remaining challenge is to consolidate the value chain and verify its robustness and effectiveness in meeting market demands, which are essential conditions for the development of hemp industries. This represents a real opportunity for cooperation between the public and private sectors, particularly between France and South Africa.

Photos: Hotel built with industrial hemp in Cape Town, South Africa (Photos: Marie-José Neveu-Tafforeau, June 2024).

“Hemp, a crop dominated by small farmers with many prospects”

Interview with Davison Chikazunga, coordinator of the Center for Ecological Intelligence at the University of Johannesburg

What do you think are the prospects for the development of hemp and its industrial uses in South Africa?

There is a certain optimism surrounding the hemp industry in South Africa. This enthusiasm is due to three main reasons. First, regulatory policy is becoming more relaxed; the requirement to obtain a permit to grow hemp has been eased, and it is no longer necessary to obtain a police certificate or install fences. Second, the THC limit has been raised from 0.02% to 2%. Finally, there has been an increase in financing initiatives. The Land Bank is offering a product to support hemp cultivation, the DTIC is developing financial instruments to support commercialization, and local authorities are funding feasibility studies and pilot projects.

What are the main challenges for the hemp sector?

The main challenges concern training, regulation, markets, and financing. On the training side, there is a knowledge gap among farmers and support institutions regarding hemp cultivation and processing. There is also a lack of clear policy guidance on the commercialization of hemp products. There is also a regulatory gap regarding safe levels of cannabinoids in animal and human food. Hemp markets are not yet well developed, and hemp is perceived as a risky investment. Despite significant progress, banks and lenders lack the knowledge to develop suitable financial products.

What role do smallholder farmers and SMEs play in the development of the hemp industry in South Africa?

Currently, hemp cultivation is dominated by small farmers. Large farms show little interest in this crop. Most farmers grow IKS cannabis (using traditional methods), which is not industrial hemp, and only a few produce industrial hemp.

The majority of SMEs play a significant role in cosmetic and wellness products. An inclusive agricultural development model is needed to promote and expand hemp cultivation. This model must be based on the following pillars: training/skills/incubation, inputs with suitable seeds and mechanization, as well as technical support and market access for primary and secondary processing products.

Can you describe any successful partnerships or collaborations between small hemp producers or SMEs and larger companies or organizations in South Africa?

There are a few case studies (Medigrow, Afrimat, Eastern Cape Rural Development Agency), but they face challenges. Many initiatives are funded at the provincial level, but project design does not incorporate sustainability, and funding relies primarily on grants.

The University of Johannesburg is establishing an incubator to support farmers and SMEs in agricultural value chains. GROW Hemp, an agricultural incubator, is planning a 1,000-hectare pilot project, structured around four provincial agro-industrial hubs.

What future trends do you anticipate for the South African hemp industry?

The outlook is positive. The government, through the DTIC, is developing a commercialization framework, and local governments are funding pilot projects and feasibility studies. Some hemp by-products are being tested for commercialization (animal feed, CBD products, cosmetics, biofuel, and biochar). There is also growing demand for the use of hemp in phytoremediation and the development of carbon credit markets, making hemp attractive. In addition, the fuel blending requirement will increase demand for hemp, which could account for up to 20% of biofuel needs.

[1] COBASA – Based in South Africa since 2001, COBASA is a consulting and investment company in Southern Africa, particularly in agribusiness. For the past three years, COBASA has been investing in the development of industrial hemp in Southern Africa, notably through obtaining the FASEP hemp South Africa in 2024.

[2] Industrial hemp is a licensed crop, the seeds are certified and ensure production with less than 0.3 % of THC.

[3] FASEP: Private Sector Study and Assistance Fund, is a facility of the General Directorate of the Treasury at the French Ministry of Finance. The Fasep Hemp South Africa was concluded between Chanvrière, ARC, Cobasa and the DG Trésor and overseen by a monitoring committee composed of associations, foundations, including the FARM Foundation and French hemp stakeholders.