Hemp Industry Bill 2008

Debate resumed from 7 May 2008.

Mr ANDREW FRASER (Coffs Harbour—Deputy Leader of The Nationals) [10.10 a.m.]: The Coalition will not oppose the Hemp Industry Bill but has some concerns about the way it will be administered. We want guarantees from the Government that the inspection, regulation and licensing of growers will be through a regimented process. As members are aware, the north coast has had problems for many years with the cultivation of Indian hemp for drug use. Within the electorate are concerns, and I must reflect those concerns, that people will seek licences for an opportunity at some stage of mixing the crop. But I note that since its introduction in Queensland about six years ago, where 60 licences were issued, only two breaches occurred, and both breaches were referred to the police and prosecutions ensued.

We must remember that varieties of hemp such as skunk are derivatives of industrial hemp. Industrial hemp has been used for many years in commercial areas across the world, including clothing, fuels, plastic, cements, stationery and rope. From the limited research that I have been able to do in the past few days, industrial hemp has advantages. It requires very little in the way of pesticides, which I suggest is a positive factor across the agricultural community, improving soil and other conditions, and the indication is that it may be more water-efficient than other crops. I was somewhat concerned some time ago when the now Federal Labor Government in Opposition were promoting the utilisation of hemp as a crop in the Riverina area and suggested that crops such as rice would have water allocations taken from them and applied to hemp production.

If hemp is going to be utilised as a crop that can be grown in Australia for commercial purposes, we must not divide the farming sector. We must not turn around and say that crops such as rice and cotton, which are great income earners for regional and rural New South Wales, are going to be disadvantaged by the growth of hemp. We do not want to see the Government encouraging people to move away from industries where farmers have made a huge investment, for example, in rice, especially in the Riverina area, and in cotton, in Narrabri and the north-west. We do not want to see farmers being given favourable treatment in relation to water because they will be planting hemp crops. The science is not yet evident on how water-efficient hemp is and one sometimes wonders whether the lobby groups that want the hemp crop are pushing that line without having the science to support it. We caution the Government in relation to that. We do not want to see a licensing regime where water allocations are taken from other producers in New South Wales. The commercialisation of hemp has long been pushed, probably more so by the extreme Green element or those from Nimbin—

Mr Steve Whan: A completely different type.

Mr ANDREW FRASER: As the member for Monaro says, a different sort of hemp. The unfortunate reality is that those who have been most vocal in promoting the commercial use of hemp are those who smoke the variety that is illegal in New South Wales. That is a grey area and raises a question mark and suspicion across society generally. It is the thin edge of the wedge. The Coalition is only supporting the industrial use of hemp that has a tetrahydrocannabinol [THC] level of less than 1 per cent. Seed producers in Queensland have a level of .05 per cent THC. We want varieties that do not have flower heads that can be utilised by others or, for that matter, can be hived off. As I said, skunk is a derivative of the original hemp plant and it is one of far greater strength.

A number of years ago, at Grafton jail they could not work out why prisoners were so interested in the garden. They had a nice little crop of skunk in the jail garden. Because of its strange look by comparison to ordinary hemp plants, no-one really picked it up until the crop was well and truly underway and the so-called benefits of it were being utilised within the prison system. That was quickly scuttled and a large number of those doing the gardening suddenly lost interest. We want assurances that sufficient levels of Department of Primary Industries staff are available to police it. We want assurances that the scrutiny process, as outlined in the bill, is upheld. Clause 16 of the bill states:

(1) A licence may be revoked by the Director-General

I would like the Parliamentary Secretary to indicate that the director general will revoke a licence if the licensee contravenes any provision of the Act or the regulations, whether or not the licensee has been convicted of an offence for the contravention. If licensees contravene the conditions of their licence, the wording should not be "may be revoked", it should be "must be revoked". The bill continues in other sections as follows:

(2) The Director-General must revoke a licence

I believe it should be "must" in clause 16 (1). We cannot have people saying, "We accidentally contravened our licence conditions". When the licence is granted, the conditions must be made very clear to the person wanting it. The indication from this Parliament should be that the licence "must be revoked", not "may be revoked" should any conditions within the licence be contravened. This also gives an opportunity for the farming of fibre products in the marketplace, which have long been sought. Only a couple of weeks ago I was speaking to a farmer of long standing in the Dorrigo region who was looking to plant industrial hemp. He has great belief in it in a number of areas.

I assured him that the Coalition would look favourably on the legislation when it came through, and coincidentally the legislation has come through not long since I spoke to him. It gives an opportunity to growers who want to expand their operations and make their profitability more versatile across the farming sector. As long as it is well maintained, well managed and well overseen, we should not have too many problems with it. The Coalition does not oppose the legislation on the basis of guarantees that it will have the proper oversight.

Mr PAUL PEARCE (Coogee) [10.19 a.m.]: I speak in support of the Hemp Industry Bill 2008. This bill will allow New South Wales farmers an exciting opportunity to develop a different, versatile and very useful commercial crop. The bill provides a licensing scheme to allow the commercial-scale production of industrial hemp in New South Wales for the first time in many years. Historically, hemp was grown in New South Wales from the early 1800s. By 1938 it was wrongly considered a drug crop and was banned in many countries including Australia. A reasonable assumption is that the driving force behind banning industrial hemp was a response to events in the United States of America.

For the purposes of this bill, "industrial hemp" is defined as cannabis that has a concentration of tetrahydrocannabinol [THC] of up to 1 per cent. This means that industrial hemp has no psychoactive effect. Industrial hemp not only has significant economic potential but it also has a number of environmental advantages over other fibre crops. Hemp has a long history—it has been grown for more than 12,000 years for its fibre and seed. Until the late nineteenth century, industrial hemp was one of the world's largest agricultural crops and a highly traded commodity. Because of its fibre strength, hemp was the main source of fibre for sailcloth, rope, fabric and paper. In fact, I understand Thomas Jefferson drafted the Declaration of Independence on hemp paper.

However, the mechanisation of cotton processing and the decline of sailing ships reduced the demand for hemp fibre. One suggestion as to why the use of the product declined in paper production was the influence and control that the chemical companies, in particular, Du Pont, had over the process of wood-pulp paper manufacture for which their products were essential. It could also be suggested that the growing size of such corporations meant that they held considerable influence over United States industrial policy at that time. In any event, this decline continued into the 1930s and 1940s with the introduction of synthetic fibres such as nylon, which is a product patented by the chemical companies.

In the United States the industry was effectively doomed by the passage in 1937 of the Marijuana Tax Act, which placed an extremely high tax on industrial hemp and, effectively, made it impossible to grow. In addition, the Federal Bureau of Narcotics and the successor organisation, the United States Drug Enforcement Administration, lumped industrial hemp with its psychoactive cousin. I referred earlier to the suspected role of industrial capital in the decline and legislative response to the hemp industry in the United States. The view of some commentators is that the influence of two fledgling industries at the time—oil and timber—drove the campaign against hemp.

Anything made of petroleum can be made from hemp. The oil industry wanted cars to burn gasoline, not alcohol fuel derived from plants. Randolph Hearst, the newspaper magnate, owned forests across the country and he wanted trees cut for paper, rather than hemp used for paper. Hearst began publishing horror stories in his newspapers across the country about marijuana. He made up the word based on lyrics in a Mexican drinking song. He fabricated stories of murderous Mexicans high on dope—but that was a word for narcotics, not hemp. The stories frightened and inflamed the public and the United States Congress took action.

In the last decade interest in hemp as a commercial agricultural crop has resurged. This has been very much the case in Europe, and is increasingly so in Australia. Industrial hemp is becoming big business again. There are very sound economic and environmental reasons for the growth of interest in industrial hemp. This versatile product has a wide range of applications, and I will mention some of them. Hemp produces a strong, natural fibre that is particularly suited to paper products and textiles. Unlike cotton, which requires significant amounts of chemicals to assist its growing, hemp is environmentally benign. Hemp fibre is a stronger fibre than cotton, with better absorption qualities. It is a fact that the original Levi Strauss jeans were made of hemp not cotton denim. Properly treated, hemp can perform very similarly to high quality linen.

Hemp is used increasingly in building construction. Medium-density fibreboard and even beams, studs and posts can be made out of hemp. Further, it is considered stronger and lighter than concrete and can be used in its place. A generic term, hempcrete, has developed to describe hemp-based commercial building materials. Hemp can also be used as building insulation and as an alternative to fibreglass. As well, hemp seed oil has a number of commercial uses: it can be used as a base for skin care products and paint, or as a food additive. It should be noted, however, that in 2002 the Food Regulation Ministerial Council rejected hemp as a food in Australia. Notwithstanding that decision, overseas studies have identified that hemp oil is a very rich source of polyunsaturated essential fatty acids. Interestingly, hemp oil is quite high in some essential amino acids, including gamma linoleic acid, a rare nutrient that is also found in mother's milk. Hemp may also have potential as a bio-fuel.

Hemp has agricultural benefits. As the member for Coffs Harbour pointed out, it may be useful as a rotation crop in farming systems: as a fast-growing summer crop it can be used in rotation with winter grain crops. Hemp grows well in a variety of climates and soil types and is naturally resistant to most pests, hence the reduced requirement for herbicides. I mentioned earlier that hemp has environmental advantages compared with other fibre crops. In Australia, these benefits are significant. Hemp is potentially more water efficient and requires fewer agricultural chemicals than other fibre plants. These advantages will increase as new varieties of hemp are developed that are even more suited to New South Wales conditions.

Hemp can also be used to replace many products that involve potentially harmful production processes; for example, it can be used to produce environmentally friendly paper. Because of its low lignin content, hemp can be pulped using less energy and fewer chemicals than are needed to pulp wood. This results in less pollution and lower energy consumption. In addition, hemp's natural whiteness means there is no need to use chlorine bleach in the paper production process, which can be extremely toxic. Rather, where needed, whiteness can be achieved by the use of hydrogen peroxide. It also means that hemp paper is acid free and lasts significantly longer than wood paper, without yellowing. Indeed, it has been estimated that wood-based papers have a shelf life of between 25 years and 100 years, depending on the quality, whereas hemp, being acid free, may last up to 1,500 years.

A number of Australian States have already removed prohibitions on the commercial production of industrial hemp. Commercial-scale production is currently taking place in Queensland, Western Australia and Tasmania. In Queensland, commercial production has been possible since 2002, and the Queensland Department of Agriculture has a very detailed website on that. In 2007, 46 growers were licensed under the legislation to produce industrial hemp plants. Currently, two large companies with contract growers operate the Queensland industry. Those two companies each have about 300 hectares under production annually in non-drought years.

They harvest, on average, around 8 tonnes to 12 tonnes of hemp per hectare from irrigated land, and 6 tonnes to 10 tonnes per hectare from dry land production. This yield is competitive with commercial yields around the world. Hemp is an agricultural crop with significant economic potential and a range of applications; it demonstrates significant environmental advantages over other fibre crops. This bill sets out a clear, effective licensing scheme that will allow commercial-scale production of industrial hemp in New South Wales. This is a very exciting opportunity for rural communities and I commend the bill to the House.

Mr DARYL MAGUIRE (Wagga Wagga) [10.27 a.m.]: I note that the object of the Hemp Industry Bill 2008 is to enable low-THC hemp to be cultivated and supplied for commercial production and other legitimate purposes in accordance with a licensing scheme to be administered by the Director General of the Department of Primary Industries. The proposed Act defines low-THC hemp as cannabis that has a concentration of tetrahydrocannabinol of no more than 1 per cent. The bill provides that the possession, cultivation or supply of low-THC hemp in accordance with a licence under the proposed Act will not constitute an offence under the Drug Misuse and Trafficking Act 1985.

The shadow Minister has precised this bill and has indicated that we do not oppose it, but I will make a few points about the trials. First, when researching for this debate I came across articles by a rural reporter, Paul Maguire—no relation. I congratulate him on raising in the Newcastle Herald on several occasions the prospects of trials and on following the issue intently. If we are to make progress in developing other opportunities for the agricultural sector we need diligent journalists who will follow through on a particular issue—in this case, the development of hemp crops. The article in the Newcastle Herald states:

Secret trials have found the Hunter Valley to be one of the best places in the State to grow hemp.

The region has one of Australia's best supplies of hemp seed.

The Department of Agriculture has been co-ordinating trial plantings since late 1995 at nine secret locations in the State to assess the commercial potential of hemp.

An Upper Hunter planting has produced yields of about five tonnes of dry stems a hectare.

This is the State's equal best result to date, along with a plot beside the Murray River.

The article goes on to state:

The trial involved plants with a low drug content, specifically known as low-tetrahydrocannabinol [THC] hemp.

Low-THC hemp stem fibre and seed can be used for textiles, paper rope, food and a variety of oils and other products.

Dr Spurway said the trial location would remain secret to prevent theft.

Low-THC plants looked the same as hemp with a high drug content.

Dr Spurway said that all hemp varieties tested so far had performed "well below expectations".

"For anything to be commercially viable we need to get 10 or more tonnes to the hectare," he said.

"Trials done in Tasmania had yields of between 10 and 15 tonnes to the hectare."

Dr Spurway said he was "deadly serious" about hemp's commercial potential.

"If we can get an industry going, farmers could earn an alternative income by diversifying."

I will elaborate on that point. Rural and coastal communities want to diversify, which is why these trials are important. The canola industry has been conducting trials under regulation or legislation to establish alternative ways of producing crops with better outcomes. Several articles in the Daily Telegraph refer to the dismal failure of industrial hemp trials. One article dated 26 March 1999 refers to the fact that many of the crops that were grown yielded poorly, and states:

Dr Spurway, NSW Agriculture program manager for fibres, oilseeds and specialty crops, said 20 hemp trials had been permitted across the State under the supervision of NSW Agriculture and NSW Health between 1995 and 1998 ...

He said it was a case of continuing to experiment in a bid to find varieties suitable to be grown in NSW.

Most of the illicit-type crops that are suitable to be grown in New South Wales are irrigated. When major drug busts occur we tend to find that the crops have been cultivated using drip irrigation methods and technologies. If we conducted some of those trials the new techniques and underground systems that reduce evaporation could be used to increase crop yields. I am alarmed by the comments made by Bill Shorten in an article dated 1 March 2007, which states:

Union leader and Labor recruit Bill Shorten called yesterday for cotton and rice growers to be forced out of business and their water-intensive crops replaced with a less thirsty option such as hemp.

I regard those comments as outrageous, reckless and alarmist as they will impact on communities that grow rice and cotton in the north and the south that have invested many millions of dollars in infrastructure and that make a contribution economically across this State. In the article in the Australian Mr Shorten attacked the then Federal Government. The article states:

Mr Shorten's comments go further than those of Labor's water spokesman Anthony Albanese, who will not commit to a policy of compulsory acquisitions but has called on John Howard not to rule them out ...

Mr Shorten said at the Australian Water Summit in Melbourne yesterday:

"The world wouldn't end if instead of growing cotton, we started growing hemp," he said. "Hemp needs half the amount of water to produce the same amount of cotton, has huge potential by mitigating dry-land salinity, and can also be used to replace native trees from paper pulp."

Mr Shorten is badly misguided if he is suggesting that hemp uses half the amount of water that is needed by rice and cotton. His comments would have been more believable if Mr Shorten had said that hemp should be grown using drip irrigation methods and water-saving techniques. The article continues:

Mr Shorten's comments were questioned by growers, scientists and green groups, who said annual crops such as rice and cotton were an important part of the irrigated agricultural industry.

I agree with that sentiment. The article then states:

Cotton Australia CEO Adam Kaye said there was no market for hemp, and the crop used the same amount of water as cotton.

And the executive director of the Ricegrowers Association of Australia, Victoria Taylor, said, "In my view, Mr Shorten has as much credibility on water as I do on industrial relations."

Ms Taylor said ricegrowers played by the rules. "That is why, because of the drought, we have the smallest crop in the ground for 50 years."

Ms Taylor forgot to mention that rice growers have increased their water-use efficiency by some 60 per cent. That industry has risen to the challenge caused by the lack of water allocations and it has performed exceedingly well. This article reveals that communities should be concerned now that Labor is in power federally. I am alarmed by the statements being made by Mr Shorten and others that farmers should be forced from their land or lose their water entitlements. Mr Shorten said that hemp used half the water that is needed to irrigate rice and cotton. However, he did not explain how he arrived at that equation, which demonstrates that he does not understand the technicalities involved in growing rice, cotton and hemp.

Rural communities are challenged by the continuing drought. Yesterday I gave notice of a motion that calls on State and Federal governments to prepare for a potential agricultural disaster if rain is not imminent. Initiatives such as hemp trials are important but the Government should also encourage the growing of other products. I encourage this Government to examine alternative value-adding crops that tolerate low rainfall and that do not require too much of our precious resource—water. I thank the shadow Minister, the member for Coffs Harbour, for leading the debate on this issue on behalf of the Opposition. However, I am extremely concerned that the new Federal Labor Government has expressed alarmist sentiments and suggested that farmers should have their entitlements removed. The Federal Labor Government must clarify what the future holds for people who depend on water allocations. They have invested a great deal in an industry that adds to our gross domestic product.

Mr PHIL KOPERBERG (Blue Mountains) [10.38 a.m.]: I support the Hemp Industry Bill 2008 and, in doing so, acknowledge the various comments that have been made by Opposition members. The bill will set up a licensing scheme that will enable the production of industrial hemp in New South Wales. Under the bill a licence may be granted to cultivate or supply industrial hemp for commercial production or use in manufacturing processes. Hemp can also be cultivated for scientific research, instruction, analysis or study. I will refer in more detail to those types of licences. Field trials of low-tetrahydrocannabinol [THC] hemp have been carried out in New South Wales since 1995. The first trial crop was sown in October 1995 and since then there have been trials each spring and summer.

The purpose of this trial program was to assess the yield potential of low-THC hemp crops in a range of environments across New South Wales. Where possible, the stem, fibre or seed was also evaluated for use in paper, textiles, dog food and other products. The trials were permitted under the Drug Misuse and Trafficking Act 1985 under authorities obtained from the director general of the Department of Health. Applications to conduct trials were assessed by an interagency committee. The committee included representatives of the Department of Health, the Attorney General's Department, the New South Wales Police Force and the Department of Primary Industries. Trials were permitted for the purpose of scientific research, instruction, analysis and/or study. Therefore, planting was limited to small areas and trials were approved for only one year.

Early trials were not very successful. Yields were less than half that obtained in trials in Tasmania and in commercial production in Europe. As trials progressed it became more evident that European varieties of hemp are not well suited to the climate and soil types in New South Wales. Later trials used varieties from China that have been developed for Australian conditions. These trials produced yields that were comparable to commercial production around the world. The drought conditions over most of the State for the past three seasons have impacted on the success of recent trials. However, indications are promising for commercial yields, particularly with the varieties that have been developed in Queensland, again for Australian conditions. Although this bill seeks to make commercial production possible, significant research and development work will be undertaken to establish the industry in New South Wales. For example, the development of varieties suited to the environmental conditions in New South Wales will be ongoing.

In addition, further research is required into optimum planting and irrigation processes to ensure maximum yields and minimum susceptibility to pests and diseases. Hemp is unlikely to be attacked by pests and diseases, hence the reduced need for agricultural chemicals. Industrial hemp has been promoted as a potential rotational crop and for use as a mop crop for effluent management, and there is scope to explore these applications even further. Finally, there are likely to be many new applications for hemp fibre and hempseed oil that will be developed only through appropriate research programs. In Queensland, research is mainly carried out by the companies involved in the commercial cultivation of hemp, often in partnership with government researchers. This involves continuous development of varieties of plants better suited to local conditions and continuous improvement of harvesting and processing systems. The bill will facilitate valuable research into developing this emerging industry in New South Wales. I believe it to be timely and responsible legislation. Thus I commend the bill to the House.

Mr PETER DRAPER (Tamworth) [10.43 a.m.]: I am pleased to make a brief contribution in support of the Hemp Industry Bill 2008. As other members have pointed out, this fibre offers hope to farming communities that are under increasing pressure to reduce their reliance on water. Industrial hemp has been used throughout history, and it is timely for New South Wales farmers to be able to access an alternative income source from a crop that can be manufactured into a wide range of products. Hemp fibre can be used to manufacture clothing, building blocks, skincare products, paper, paint and a multitude of other products. The Parliamentary Secretary in his agreement in principle speech also identified load-bearing masonry for building—which I had not heard about—insulation and the opportunity to use the fibre as an alternative to fibreglass.

I am pleased that the Government has indicated an intention to allow farmers to plant industrial hemp for the 2008-09 summer season. While the release of industrial hemp will probably attract some level of criticism from community members who will confuse this product with the illegal hemp that has high levels of THC, marijuana will remain an illegal product and its use or production will continue to be prosecuted under the Crimes Act. People looking to get high on industrial hemp are in for a great disappointment because it has almost negligible levels of THC. Should this bill be passed by Parliament, it is the Government's intention to release draft regulations for public comment in August. I have had a number of conversations with farmers who live in some of the harsher areas of our State to whom an alternative crop that requires little water and minimal application of agricultural herbicides or pesticides seems very attractive. Farmers in other States have had an advantage over those in New South Wales in being able to access the hemp market. This bill will give our farmers an opportunity to compete.

I am pleased to see that the bill has been developed following extensive consultation between the Department of Primary Industries, the Attorney General's Department, the New South Wales Police Force and the Department of Health. This follows trials of industrial hemp that have proven that the crop can be commercially viable—even though there are question marks over current returns—and does not present a threat to public wellbeing. The bill will remove industrial hemp's classification as a prohibited plant under the Drug Misuse and Trafficking Act 1985. However, its illegal cousin with high THC levels will remain on that list.

I am also pleased that opening up access to industrial hemp for farmers will not compromise the integrity of drug law enforcement in New South Wales. Marijuana plants are virtually indistinguishable from industrial hemp plants: introducing a quantity of the illegal plant into a commercial industrial hemp crop is a potential problem. It is critical that the farmers licensed to grow hemp are of good character, and are willing to have their crop tested regularly and monitored to prevent problems arising. The bill will establish a licensing scheme to facilitate the commercial production of industrial hemp. The director general of the Department of Primary Industries will administer the scheme to issues licences to grow industrial hemp. The bill provides that the licences will be granted for various purposes, including commercial production, manufacturing, scientific research, instruction, analysis or study, or any other purpose prescribed by the regulations. It is important to stress that the licences will not be granted to everybody who applies, because the bill provides for a rigorous application process.

I was pleased to hear the Parliamentary Secretary point out that every application must be made directly to the director general of the Department of Primary Industries, and that a person must prove himself or herself to be of good character to qualify. The applicant's character, honesty and integrity will be considered as part of the process to determine whether a licence application is successful. The director general can also refuse to grant a licence to an applicant should a close business associate of the applicant fail the character test. This is designed to ensure that people of unsavoury character do not infiltrate the industry. No licences will be granted to applicants who have been found guilty of serious drug-related offences, or even if a close business associate of an applicant has been found guilty of a drug-related offence.

The director general will have very broad powers to investigate applicants when considering licence applications. The bill provides that the director general can undertake all appropriate investigations before deciding whether an application is successful. The bill also provides that all applicants and their close associates will be the subject of a criminal record check, and applicants can be compelled to produce any information or records as directed to assist the director general in determining the outcome of their application. The director general's decision is final. Licences will be granted for five years and it will be an offence to breach any condition of the licence. It will also be an offence to cultivate or supply low-THC hemp other than in accordance with a licence.

Successful applicants will be subject to regular inspections, with inspectors having substantial powers to enter and search premises, to seize property and to question people in relation to the crop. The director general can suspend or cancel a licence should there be reason to do so. The commercial production of industrial hemp in New South Wales will offer significant hope to farming communities struggling under the burden of reduced access to water. My investigations suggest that it uses comparatively little water when compared with other broadacre crops. I own a hemp shirt and I have written on hemp paper. Industrial hemp is a yearly crop that has the potential to be of great benefit to our State. I commend the bill to the House.

Mr FRANK TERENZINI (Maitland) [10.48 a.m.]: I am pleased to support the Hemp Industry Bill 2008. It is a timely and opportune bill. All members would agree that it offers exciting opportunities for the farming sector and the community in general. Members have mentioned the commercial crop's benefits, including the fact that it is resistant to pests, requires less water and fewer chemicals than other crops, and can be used to produce biofuels, oils and so on. Those characteristics make it a very attractive crop. However, we must ensure that the clauses dealing with licensing, enforcement and investigation are good, sound and balanced and are drafted in the public interest. The principles behind, and the integrity of, the bill must be upheld. I fully support the balanced regime that has been put in place; it will ensure that the integrity and policy of the Act are upheld while at the same time allowing not only the cultivation, supply and selling of industrial hemp, but also the opportunity for further research and development.

In the past 12 years I have witnessed many court cases involving the illegal cultivation of hemp and seen people convicted under the Drug Misuse and Trafficking Act. The places the plant may be grown are limited only by one's imagination. Typically it is grown in the bush, on a farm or in other large areas, as mentioned. I remember one particular case involving a medical practitioner from the Hunter Valley who decided to grow a few acres of low-THC industrial hemp but who did not have a licence or permit to do so. He was prosecuted and convicted. I do not know what this offender will think now because what he did, with the best of intentions, will be permitted under the bill. That case was well known in the Hunter region and proves that people from many different backgrounds want to take advantage of the benefits of this product.

The two main provisions of the bill are the licensing clause in part 2, and the investigation and enforcement clause in part 3. It is important to note that the licensing scheme will be strict. The director general of the Department of Primary Industries will be allowed to call for all information and make all investigations necessary to determine whether an applicant is eligible for a licence. Of course, associates of an applicant also will undergo strict scrutiny to ensure the bona fides of the applicant. The THC level of the plant will be set at 0.5 per cent to a maximum of 1 per cent. Climatic conditions such as heat and water may change the level of THC in industrial hemp. For this reason the bill contains that tolerance level to take into account changes in climatic conditions.

It is important to note also that the licence conditions will be strict regarding the size of the crop, expected tonnage, type of crop and exactly for what it will be marketed. All these conditions, which will contain the finest details concerning the production and sale of this product, will be noted on the licence. The monitoring and investigation regime will be checked thoroughly—nothing will be left to chance. The authority will make sure that the licence conditions accord precisely with what the applicant says he or she intends to do with the crop. I am happy with the investigation and enforcement regime in the bill. The bill enables police officers to be defined as "an inspector". Clause 27 (2) of the bill empowers an inspector, who must produce identification, to enter premises for the purpose of investigating and carrying out surveillance to do any or all of the following:

(a) carry out surveillance activities,

(b) examine and inspect any part of the premises or any article or thing on the premises,

(c) make such examinations and inquiries as the inspector considers necessary,

(d) require records to be produced for inspection,

(e) examine and inspect any records,

(f) take copies of any records,

(g) take and remove samples of any plant or thing for analysis—

and other like powers. Not only will we have a licensing scheme that sets out particular conditions, but also we will have power to make checks and take samples to ensure that THC levels are within the specifications. Furthermore, concerns can be allayed about the rights of the individual under this part of the bill. As I mentioned earlier, hemp crops are usually grown in wide areas, such as bushland or farms. However, it is important to remember that, whilst inspectors or the police will have the power to enter premises—which are usually defined as a dwelling and the surrounding curtilage area—they will need a warrant, which must be obtained in the normal manner from an authorised officer.

An inspector or the police will not be able simply to enter premises. This enforceable regime will maintain the integrity of the Act, which seeks to license someone to grow industrial hemp under strict conditions. The bill creates a regime to inspect, investigate and enforce the proper operation of the Act without allowing police or inspectors to enter someone's house without a warrant. I am aware of many cases when hemp has been grown inside residential premises using intricate methods and technologies. The bill is about creating a regime for the farming sector for the production of hemp for industrial purposes. It achieves that purpose whilst balancing the rights of individuals by requiring warrants to enter premises, for example.

It is important to note that because hemp is an illegal drug under the Drug Misuse and Trafficking Act and is, unfortunately, grown in large quantities in many areas—the member for Coffs Harbour said it was a problem in his electorate, and it is an issue in the Hunter Valley because it grows so well there—these tight enforcement procedures are needed. The bill is about balance, and it will enable great things. Industrial hemp with no psychotic active component will be no good for selling on the illegal market. Anyone wishing to achieve psychotic satisfaction from this drug will be disappointed because it will not produce the desired effects.

Stringent enforcement rules will be in place. I am advised that one benefit of growing industrial hemp is that it will be a deterrent to would-be growers of illegal plants. Once industrial hemp is established in an area or district, inspectors will visit the applicant or licence holder. Consultation with other States reveals that regular inspections prove to be a deterrent to those wishing to grow illegal marijuana. The bill presents an exciting opportunity for New South Wales farmers to combat climate change and to make better use of resources, chemicals and water. I have no hesitation in commending the bill to the House.

Mr ANDREW STONER (Oxley—Leader of The Nationals) [10.57 a.m.]: Some people might find it unusual that The Nationals would support the growing of marijuana. However, we are happy to lend our support to the Hemp Industry Bill 2008. In so doing, The Nationals note that industrial hemp has been grown in Tasmania since 1991, Victoria since 1997, Queensland since 2002 and Western Australia since 2004. Industrial hemp has a wide range of uses. Our paper banknotes were made from industrial hemp, which is used to produce strong paper. That is why those notes lasted so long. Modern uses of industrial hemp include clothing, plastics, cement, rope, other forms of stationery and fuels. The product has a wide range of uses and potentially offers a great commercial bonus to those areas able to grow it. Industrial hemp is essentially a weed that requires very little maintenance in the form of chemicals or irrigation. The plant does not require large amounts of water and it can help control the erosion of topsoil and replenish the soil with oxygen and other nutrients.

The chief concern of anyone would be the danger of growing large quantities of any form of marijuana anywhere in the State, given that marijuana is a problem drug. I would go so far as to say—and this is supported by a number of studies—that marijuana use contributes significantly to the mental health problems of many people in New South Wales. The number of young children smoking marijuana is increasing, and the psychiatric effects of its long-term use are evident. Mental health wards in country hospitals are crammed with young people suffering from mental illnesses such as psychosis, schizophrenia, depression and anxiety. We must have a strong regime to control the availability of marijuana in the context of its being grown for industrial purposes. I note that the industrial variety of cannabis or hemp contains very little tetrahydrocannabinol—

Mr Brad Hazzard: Say that again?

Mr ANDREW STONER: Tetrahydrocannabinol.

Mr Brad Hazzard: Very good.

Mr ANDREW STONER: It is one of 64 cannabinoids in marijuana.

Mr Brad Hazzard: What is the—

Mr ANDREW STONER: I am not going to enter into a debate with the member for Wakehurst.

The DEPUTY-SPEAKER: Order! The member for Wakehurst will not engage in dialogue across the Chamber. The Leader of The Nationals has the call.

Mr ANDREW STONER: The THC is what gives users a high. The industrial hemp plant has about 1 per cent of THC whereas the illegal variety, which is increasingly grown hydroponically with an increasing percentage of THC, has up to 25 per cent. They are two different beasts. I dare say a drug user would have to smoke the industrial variety all day to get any effect, by which time the user probably would die of lung cancer. There is very little incentive for drug users to raid industrial hemp crops. The different varieties of hemp plant can be discerned by the naked eye. A farmer would be able to tell if somebody had planted the non-industrial variety with the higher THC variety in his or her crop. I note that the Government proposes a range of safeguards, including police background checks of farmers and their hemp industry business associates, and that licence holders will be subject to regular random police inspections.

The Government is also of the view that, as the experience in Tasmania and Queensland suggests, growing industrial hemp crops may lead to a reduction in growing and harvesting the illegal variety because of the increased police involvement in the area. That would be welcome, certainly on the mid-North Coast where, as the member for Coffs Harbour indicated, we have a problem with illegal crops of marijuana. I congratulate Superintendent Paul Fehon and his police officers in the Mid North Coast Local Area Command who, just a couple of weeks ago, made a major drug bust, seizing over 100 kilograms of high-quality marijuana and other drugs, and making some 15 arrests in and around Laurieton.

The crime syndicate, which involved a particular family and associates from the Laurieton-Camden Haven area, had spread its wings far and wide over the State. The syndicate was growing marijuana as far away as Yarrowitch and was distributing it throughout the State. The efforts of our police on the mid North Coast are much appreciated by the wider community. Minimal breaches of the regulations in terms of biosecurity issues in the States where industrial hemp has been grown have been dealt with and referred to the police. The Nationals are happy to support the Hemp Industry Bill 2008, which will provide support for the New South Wales farming industry by giving it an alternative crop which is relatively easy to grow and has a ready market.

Mr BRAD HAZZARD (Wakehurst) [11.05 a.m.]: As a number of members of the Opposition have already said, the Opposition does not oppose the Hemp Industry Bill. Some would say it is long overdue, bearing in mind the trial of the growth of industrial hemp in other States, particularly Tasmania and Queensland, and the fact that they had had a legislative framework for the growth of industrial hemp, having accepted that it is a worthwhile agricultural product. Some members have canvassed the relationship between industrial hemp and marijuana, which is commonly used for illegal purposes. Cannabis sativa is the taxonomic classification for plants known as industrial hemp. The marijuana plants that cause so much concern, particularly among young people, are taxonomically in the same category. The big difference is the level of delta-9-tetrahydrocannabinol, which is a psychoactive drug.

Any one of us who grew up in the 1960s and 1970s will know it was commonly available on the campuses of Australia. It is a dangerous substance that we should all have major concerns about and it is commonly referred to as THC. The impact of THC on people's mental state can be extremely devastating, but that is not part of this debate. This debate is about the industrial plant that has THC concentrations of less than 1 per cent in its leaves and flowering heads. Hemp has an ancient and revered history, and mankind has long used it. The more recent negativity surrounding hemp focuses on the use of marijuana with the higher levels of THC. In the few moments that I have been in the Chamber it has been drawn to our attention that hemp is a useful product. I acknowledge that in the past years a couple of members in the upper House mentioned the use of industrial hemp, but the Government has been reluctant to introduce a legislative framework in New South Wales to allow its appropriate use.

Industrial hemp has had a chequered history in Australia because the trials that were first implemented relied on seeds from Europe. Like any vegetable or any product that comes from another climate, it may not have had the appropriate genetic make-up for our climate. It has taken a lot of work to produce appropriate seed material to cultivate industrial hemp that is most suitable to Australia's various environmental conditions. In Europe it was noted that hemp fibre becomes much more coarse with any change in climate—such as water supply and temperature—which makes it quite unsuitable for textile spinning. These days members of the public tend to think of hemp as a textile-type product, but that is only one of the possible uses for industrial hemp.

Australia and New Zealand have done a great deal of research into the various uses of industrial hemp. These days, companies are using industrial hemp as replacements for fibreglass, and I understand that it provides an exceptional structural material for use in building. Indeed, it is even being considered for use in constructing bridges. Other companies have considered the use of hemp fibre as a biodegradable mop-up material impregnated with oil-eating bacteria. Industrial hemp generally provides all sorts of opportunities as a crop for farmers, and would particularly benefit those in New South Wales who are having difficulty in the current environmental circumstances. Earlier I heard a suggestion that the growing of industrial hemp uses less water than does the growing of cotton, albeit only marginally: It may be that hemp crops use almost as much water as cotton crops.

However, used as a rotational crop with cotton it can provide a break in the insect cycle that might otherwise impact on the primary cotton crop. Also, research indicates that it is a good rotational crop with wheat that can provide substantial improvement to soil conditions between wheat crops. Farmers adapted easily to the growing of industrial hemp because agriculturally it has the same production requirements as sorghum. All in all, it makes sense that New South Wales should finally get on the bandwagon to provide a regulatory framework, as this bill does, for the licensing of natural people and for companies to produce industrial hemp. I am sure that my colleague the member for Pittwater will highlight who can apply for licences. I note that if it is a company, individual directors can be liable, but, sensibly, only if they knowingly breach the conditions of their licence. All in all, it makes sense that New South Wales is finally catching up with Queensland and Tasmania. It is unfortunate that we have had a State Labor Government for 13 years.

Mr Steve Whan: It is not unfortunate at all.

Mr BRAD HAZZARD: The member for Monaro says it is not unfortunate. If he were to listen to the broad views of the community, he would know what people are saying: It is unfortunate that we still have this Government. With a bit of luck we will not have the same Government in three years time. We are unfortunate to have this Government on a whole range of fronts, whether it is the Government's miserable failure to provide infrastructure, which was acknowledged last night in the Federal Budget through the setting up of an infrastructure fund; whether it is education and health; or whether it is in this area. It took someone to sit up and take note of what was happening north of the border and down in Tasmania to finally introduce the legislative framework. The regulatory framework will follow. This bill is timely and provides great opportunities for our farmers to develop alternative agricultural products.

Mr ROB STOKES (Pittwater) [11.14 a.m.]: With the rest of the Coalition I do not oppose the Hemp Industry Bill 2008. Hemp was first harvested by the Chinese about 8,500 years ago and for most of its history, hemp was most valued as a fibre source, and considerably less so as an intoxicant. It also has had some limited use as an oilseed crop. Until the beginning of the nineteenth century hemp was the leading cordage fibre. Indeed, until the middle of the nineteenth, hemp rivalled flax as the chief textile fibre of vegetable origin and had many uses as a fibre. However, as the member for Coogee pointed out, the growing use of hemp as an intoxicant led to the suppression of hemp cultivation in most Western countries from the late 1930s, principally in the United States from about 1938.

As members in this place have already alluded to, hemp is a multipurpose crop and I will outline some of its uses. Different parts of the plant have different uses. Hemp seed can be used in confectionery, baked goods, salad oil, body care products, cosmetics, animal feed, birdfeed and press cake for livestock. Indeed, hemp seed is so useful as birdseed that the big problem in some areas where hemp is grown is that birds eat the seeds of the crop before it is harvested. Hemp seed is also used for dietary supplements and specialty industrial oils. Hemp fibre is particularly useful for plastic-moulded products, specialty papers, construction fibreboard, biodegradable landscape matting and plant culture products, coarse textile such as carpets and upholstery, and fine textiles.

Members will have seen the Hon. Ian Cohen of the upper House wearing his hemp jacket. The woody stem core of hemp is used for animal bedding, thermal insulation, fibreboard and plasterboard. The whole plant has potential use as a fuel source. Much has been said about the environmental and biodiversity benefits of hemp cultivation. It is true that hemp is suitable for agriculture and is remarkably less toxic than many other crops. For example, hemp can be grown with little or no fungicides, herbicides and pesticides, and little fertiliser, making it far less environmentally damaging to grow than many other crops. One of the biodiversity benefits of hemp is that it can be cultivated in a wide variety of climatic and soil conditions.

However, a 1999 United States study by Montford and Small published in the Journal of the International Hemp Association noted that the environmental benefits of growing hemp have been greatly exaggerated in the popular press. Of course, hemp has some disadvantages, the main one being that it is illegal and that the psychoactive ingredient of THC leads to its use as an illegal drug. The intoxicant potential is measured by the presence of THC. There has been some debate about the level at which the psychoactive ingredient of THC creates problems. In a 1976 study, Small and Cronquist suggested a split between cultivars with less than 0.3 per cent of THC in the upper or reproductive part of the plant and those with more than 0.3 per cent of THC. That suggestion was adopted by the European Union and Canada as a dividing line between the cultivars that can be legally cultivated under licence and those that are considered to have too high an intoxicant potential. However, the legislation accepts a level of about 1 per cent THC as the threshold for cannabis to have an intoxicating potential so that the cultivation of cultivars with no more than 1 per cent will have no potential to increase the intoxicating effect of THC.

Part 2 of the bill deals with the scheme set up to licence people who want to grow industrial hemp. I note that the suitability of the applicant for a licence to grow industrial hemp and his or her close associates will be assessed. The definition of "close associate" in part 1, clause 4 is a little bit hazy. It states that a close associate is a person who holds or will hold any relevant financial interest in the business of cultivating hemp or hold any relevant position in the business of the licence applicant or licence holder. The definition does not include a spouse or child of an applicant, which means that a spouse or child of a person with a conviction for drug importation could hold a licence to grow industrial hemp. I seek clarification on that matter. The definition in the bill does not say that a close associate will include family members. Part 2 clause 9 (4) states:

The Director-General must not grant a licence to a person if the person, or a close associate of the person, has been found guilty of a drug related offence.

Once again, the definition of "close associate" does not include a family member, which could lead to a potential problem. Part 4 clause 38 provides for a person to make an application to the Administrative Decisions Tribunal for a review of a decision by the director-general to refuse or revoke a licence granted to a person who makes an application or who holds a licence. Conceivably, if the director-general became aware that a spouse, child or parent of a licence holder was convicted of a drug-related offence, the director-general could revoke the licence, but, again, because a family member is not included in the definition of "close associate" an appeal could be made to the Administrative Decisions Tribunal. I seek clarification from the Minister on those matters. With that caveat I do not oppose the bill.

Mr DONALD PAGE (Ballina) [11.22 a.m.]: I declare an interest at the outset: I have been a wearer of hemp clothing for many years. I support the Hemp Industry Bill 2008, which will establish a licensing scheme for the commercial cultivation or supply of low-tetrahydrocannabinol [THC] industrial hemp and amend the Drug Misuse and Trafficking Act 1985 to legislate that it will no longer be an offence to possess, cultivate, manufacture, produce or supply low-THC industrial hemp. I note that the Department of Primary Industries, the Attorney General's Department, the New South Wales Police Force and New South Wales Health were consulted on the provisions in the bill.

The bill proposes a licensing scheme that will enable the commercial growing of low-THC industrial hemp for use in manufacturing or scientific research. The definition of low-THC industrial hemp includes the leaves, flowering heads, seeds and seed products such as oil and fibre, all of which contain less than 1 per cent THC. Licences will be granted only to applicants who meet the strict qualifying criteria. Applicants will be required to undergo a criminal record check, and the bill empowers the director general to carry out extensive investigations and inquiries during the application process. Once granted, licensees will be subject to strong enforcement powers provided under the bill. The licences will be valid for four or five years.

For several years The Nationals have supported the commercial hemp industry at its annual conferences. We see the potential of this industry in New South Wales as an addition to the suite of opportunities available to farmers. Hemp products are becoming very popular. Hemp clothing, for instance, is extremely durable and keeps one cool when it is hot and warm when it is cool. Hemp clothing is widely worn in my electorate—I have been wearing hemp products for years, and I thoroughly recommend them. Commercial hemp is grown as a fibre crop and has a broad range of uses, including as paper products and building materials, not to mention its time-honoured use as rope.

The benefit to agricultural producers of growing industrial hemp is that it gives them access to the commercial hemp industry, which is likely to grow rapidly due to the increasing interest in hemp as a commercial crop. This environmentally friendly crop, which requires small amounts of water and little or no pesticides, is suited to broadacre farming. Already industrial hemp can be grown in Victoria, Queensland, Western Australia, and the Australian Capital Territory under licence or permit. Anecdotal information from Queensland indicates that growing industrial hemp leads to marijuana-free zones. This legislation will bring New South Wales into line with other States. The commercial hemp industry will provide opportunities to, and benefits for, the agricultural industry. If properly supervised—and I believe the legislation contains significant safeguards—it does not constitute a threat in terms of the growing of illegal marijuana. I commend the bill to the House.

Mr THOMAS GEORGE (Lismore) [11.26 a.m.]: The purpose of the Hemp Industry Bill 2008 is to establish a licensing scheme for the commercial cultivation or supply of low-tetrahydrocannabinol [THC]—1 per cent—industrial hemp and to amend the Drug Misuse and Trafficking Act 1985 to legislate that it will no longer be an offence to possess, cultivate, manufacture, produce or supply low-THC industrial hemp. The Hemp Industry Bill 2008 does not represent significant deviations from current policies—industrial hemp has been grown in trials in New South Wales since 1995. The bill has been prepared in consultation with the New South Wales Police Force, the Attorney General's Department and New South Wales Health. Industrial hemp is currently grown in Tasmania, Victoria, Queensland and Western Australia, and has a variety of commercial uses, including clothing, fuels, plastics, cement, stationery and cordage, that is, rope.

Growing hemp requires little or no pesticides and may be more water efficient than other broadacre crops. It also helps to control erosion of topsoil, and replenishes the soil with nutrients and oxygen. Hemp contains THC which is the psychoactive ingredient found in marijuana. While THC is present to some extent in all cannabis varieties, industrial hemp does not contain high enough amounts to produce intoxicating effects. For industrial hemp, male and female plants are grown closely together, creating a higher biomass content that results in low-THC levels of approximately 1 per cent. For marijuana, male varieties are removed and female varieties are spaced far apart, creating higher THC levels—from 4 to 24 per cent—in the unfertilised female plants.

The bill also provides that five-year licences will be granted to eligible parties following police background checks of the applicant and his or her hemp industry business associates. Licence holders will be subject to regular, random police inspections. As the member for Lismore, I trust that those licences will be subject to strict control. The bill provides that if a licence holder seeks to transfer the licence that the person to whom it is to be transferred reapplies for it. I want the Parliamentary Secretary to assure me that if a person who is licensed to sell industrial hemp decides to sell the property in two years, the licence is not automatically transferred with the sale of the property.

Getting departments to speak to each other concerns me. I would hope there would be an indication to the Director General of the Department of Primary Industries from the Department of Lands when properties that have had a licence granted to them are sold. I am advised that in six years there have been only two breaches of the 60 licences issued in Queensland—that provides me with a little comfort—and Biosecurity referred both matters to the police. All departments should work together to maintain security. I know this matter has been worked our between the Attorney General's Department, the New South Wales Police Force and NSW Health, but in cases of transfer it should also include the Department of Lands. As the member for Coffs Harbour indicated, the Opposition will not oppose the Hemp Industry Bill 2008.

Mr KEVIN HUMPHRIES (Barwon) [11.31 a.m.]: I support the Hemp Industry Bill 2008. The object of the bill is to enable low- tetrahydrocannabinol [THC] hemp to be cultivated and supplied for commercial production and other legitimate purposes in accordance with a licensing scheme to be administered by the Director General of the Department of Primary Industries. The proposed Act defines "low-THC hemp" as that having no higher a concentration of tetrahydrocannabinol than 1 per cent. The bill also provides that the possession, cultivation or supply of low-THC hemp in accordance with a licence under the proposed Act will not constitute an offence under the Drug Misuse and Trafficking Act 1985. I spent 5½ years in Tasmania in the late 1980s, where hemp trials began. I now live near the Queensland border. Hemp has been grown just north of the border in the Darling Downs and Wide Bay area for some years.

I believe the hemp industry has significant growth potential not only in Queensland but also around New South Wales. Industrial hemp is a significant player as a fibre crop. It is a future world crop and Australia has the capacity to meet growing demand. My Federal colleague Bruce Scott has been active in calling on the Queensland and Federal governments for the extension and growth of the industry in and around the Darling Downs. Australia is short of a fibre-processing mill, which would create jobs in regional areas not only for domestic consumption but also for export. Currently most of the hemp that is produced in places such as Queensland—where 200 hectares is currently under production—sadly is exported to France because we cannot get a mill to establish this value-adding process.

Australia has the growers, the varieties and the technologies but we do not have the processing infrastructure. The challenge for New South Wales, and other States, is to fulfil the capital requirements and look at seed funding industrial hemp fibre processing mills. Places such as Barwon—because of the nature of the soil, the climate and water availability—have the capacity to ramp up hemp production quite quickly. I will be talking to the Government about this matter in the not too distant future. In the area around the Darling Downs in Queensland there have been a significant number of hemp trials. For example, 10-hectare crops have been planted in and around Dalby. As I said earlier, well over 200 hectares of hemp is being grown at the moment and most of that crop will go to France for processing. That is a shame.

Hemp fibre is processed into products such as superior paper pulp—which will alleviate some of our need for deforestation for paper supply—biodegradable plastics, automotive and aerospace components, animal bedding, absorbent materials, textiles, building products and insulation. It is also a potential source for renewable fuel in the biofuel industry. In recent years the Federal Government has incorporated hemp production in Australia's Free Trade Agreement with the United States. This will potentially give Australia, New South Wales and some of our electorates exporting capacity into countries such as the United States, which is currently undersupplied, Europe and Canada. It demonstrates a developing vision for the hemp industry in Australia. We have the capacity, with our sustainable agricultural practices and our environmentally friendly techniques for fibre production, to build a new industry. I support the bill to give the hemp industry all the resources and backing that it needs over the next few years.

An acquaintance of mine from Moree, Mr Ross Munro, was involved in one of the pilot plants conducted in Dalby by a company called Ecofibre Industries Limited. Ecofibre installed a pilot processing plant, in conjunction with local partners, as a "proof of concept" mill to test the Australian design and processing capability of the fibre produced by this country but particularly on the Darling Downs. The pilot mill was built to look at overcoming the hurdles of processing in Australia instead of exporting most of the product. Hemp is a bast fibre plant—"bast" is the German word for "bark". The pilot mill has been in place for some time and was designed to help fill the missing gap within the supply chain in an emerging industry. We know that large-scale processing will follow once the supply chain has the ability to meet the three levels: grow, process, and on-sell.

There are things happening in the hemp industry in north-western New South Wales, particularly in the electorate of Barwon, around Moree. I inform the House that a number of growers will be applying for a licence to grow hemp in that area based on the agricultural capability of places such as the Gwydir and Namoi valleys. Ecofibre Industries, in conjunction with local partners, will be moving what are called mobile hemp processing plants. As we speak it is instigating the design and construction process in Moree. I would expect in the not-too-distant future—hopefully as soon as the bill is passed—on the completion of the first plant in Moree, modules of hemp will be heading down the Newell Highway from the Darling Downs. The idea is that the processing plant will be built on the pilot plant that was constructed in Dalby—I expect that plant will be deconstructed. There will be trial modules—such as cotton modules—of hemp in Moree in the not-too-distant future.

The idea is for the mobile plants to be moved around. My understanding is that once trials have been undertaken in my area they will be relocated to Tasmania to help with the processing of the hemp crop. That plant then will be moved back to places such as Queensland and Moree. Over the next couple of years we will see the design and construction of a number of hemp processing plants, which will service the east coast of Australia. The bill not only supports trials, it also recognises that there are people who are ready to take the next step and invest in growing and processing the crop. Australian agriculture faces the difficulty of competing with many of our European cousins who are heavily subsidised. The only way we will meet global pricing structures and enter the hemp market on a serious scale is through efficiency gains and smart logistics.

The fact that people already are taking the hemp industry to the next level—and I say that based on the initiatives of our neighbours across the border to the north—will hold us in good stead. We know that our agricultural industry can compete in the global market because our farmers are the most efficient and the most environmentally friendly farmers in the world and they are always looking at ways to do things better. Hemp that is grown in north-western New South Wales, perhaps the Murray Irrigation Area, will compete with other crops, such as cotton, for water use. During the trials, the use of water and water efficiency will be looked at. But the processing is a critical factor. To make savings, particularly with the cost of transport these days, a flexible approach must be taken to processing. As I said, we know our farmers can compete in the global market. The trial system has been proved in other parts of Australia. The fact that the Government has supported the trials and regulated them in a commonsense way will assist the growth of this industry. I am fully supportive of the bill.

Mr STEVE WHAN (Monaro—Parliamentary Secretary) [11.41 a.m.], in reply: I thank the members representing the electorates of Lismore, Barwon, Tamworth, Oxley, Wakehurst, Pittwater, Coogee, the Blue Mountains and Maitland for their contributions to the debate on the Hemp Industry Bill.

Mr Andrew Fraser: And Coffs Harbour.

Mr STEVE WHAN: The member for Coffs Harbour is next on the list, as I want to respond to some of the points he raised. The bill establishes a licensing scheme for the commercial production of industrial hemp in New South Wales. Farmers who establish that they are of good repute will be allowed to grow low- tetrahydrocannabinol [THC] hemp under licences granted by the Department of Primary Industries. Licence applicants and their close business associates will be subject to a criminal record check. I will refer to that issue in my response to a comment from the member for Pittwater. Licences will not be granted to people who have been found guilty of a serious drug offence.

A key priority for the Government in developing this legislation has been to ensure that drug law enforcement in this State is not compromised. For this reason, the bill will put in place strong investigation and enforcement powers. I welcome the comments of the member for Maitland, as a former lawyer, about the adequacy of those provisions. The bill is the result of extensive consultation between the Department of Primary Industries, the Attorney General's Department, the New South Wales Police Force and NSW Health. During debate the member for Coffs Harbour raised a number of issues, including the potential for hemp to be grown as a cover crop for marihuana. I can assure the member that the Department of Primary Industries will work closely with the New South Wales Police Force to ensure compliance with the licensing scheme. The bill includes broad and effective powers to ensure that drug law enforcement is not compromised.

In practice, industrial hemp is unlikely to be an effective cover crop for marijuana, for several reasons. Firstly, the cultivation practices used in the production of marijuana and industrial hemp are different. As the member for Lismore said, the hemp plants are harvested for their fibre, and they need to be tall and grown closely together. Typically, hemp plants are allowed to pollinate and they are harvested before their seed is set. In contrast, marijuana plants are manipulated to increase the amount of leaf and seed-head production. They are given more space to grow and need to be harvested at a different time.

Mr Andrew Fraser: He is speaking from personal experience!

Mr STEVE WHAN: The member for Coffs Harbour talks about personal experience. When he talked about the other sort of hemp, the one with the higher THC level, he did not tell us whether he inhaled. Members have done reasonably well not to get into a debate about the other uses of hemp. Secondly, hemp would not be used as a cover crop because pollen from a hemp plant can pollinate marijuana plants within a 12-kilometre radius. This suggests that people in the illicit drug trade will not want to have marihuana crops in the vicinity of industrial hemp. As I understand it, and I am not an expert or a scientist, cross-pollination would result in the marijuana crop having a lower THC level. It may be interesting to see the types of people who do not want hemp grown in their area.

The member for Wagga Wagga and the member for Coffs Harbour raised the issue of water use. It is not the Government's intention for the production of industrial hemp to bump off, say, the production of rice or to promote its production so that farmers produce less of another crop. It is another choice for farmers to grow to diversify their crops. It is entirely up to the farmers to decide which crops they grow. The member for Wagga Wagga talked about new Federal Labor members, which was interesting. I can assure the member that from my consultations with the Federal Minister for Agriculture, Tony Burke, the Federal Minister for Regional Development, Anthony Albanese, and the Federal Minister for Climate Change and Water, Penny Wong, I know they have a strong interest in country New South Wales They are taking steps to ensure the long-term viability of our farming community and to put in place irrigation and water arrangements that are fair for New South Wales irrigators.

The member for Pittwater asked whether family members came within the definition of "close associate". The definition of "close associate" is broad enough to capture a family member in appropriate circumstances. The definition of "close associate" in clause 4 captures anyone who is or will be entitled to exercise any relevant power. This could include a spouse or a child. As the member for Maitland observed, the definition is broad in relation to the people who can be investigated. The member for Lismore asked when a property was transferred whether the licence also was transferred. The licence will not automatically transfer with the sale of a property. The licence is granted to a person or company for a property. Individuals are investigated when they enter the process.

I note the comments of the member for Barwon about the lack of processing infrastructure in New South Wales. I also note his comments on Ecofibre Industries and the development of a pilot plant. A key to the development of sustainable processing infrastructure in the long term is the development of a predictable industry, so people have a basis for long-term planning of crops. The bill will provide a fundamental first step in that process. The member for Wakehurst said that the bill was long overdue, but timely. I once again thank all members who contributed to the debate and the Opposition and Independents for their support. Industrial hemp, with its many applications, is an exciting potential alternative crop for agriculture in New South Wales. I commend the bill to the House.

Question—That this bill be now agreed to in principle—put and resolved in the affirmative.

Motion agreed to.

Bill agreed to in principle.


Bill declared passed and transmitted to the Legislative Council with a message seeking its concurrence in the bill.