Health concerns and rising retail tobacco costs have led to a decline in American per capita cigarette consumption from 7 pounds of tobacco in the 1970's to 4.5 pounds in the 1990's. In spite of a long term decline in real tobacco prices, US tobacco production, which is controlled by a quota system, produces a very high return per acre compared to other crops. Although tobacco farms are relatively small in states like Kentucky and Tennessee, they are very important to the agricultural economy. In Kentucky, for example, while tobacco accounts for only 6 percent of farm acreage, it accounts for over 50 percent of crop receipts and almost 25 percent of all farm cash receipts from livestock and crops. Although few alternative crops can be expected to yield high returns comparable to tobacco, industrial hemp fiber for paper and textile production has been suggested as a possibility.
Industrial hemp is a bast fiber similar to flax, jute and kenaf.
Bast fibers tend to have high production costs because they are only a small portion of the plant stem and must be separated from the rest of the stem before they can be used in textile or paper production. The executive summary of the Kentucky report is attached as an appendix. That report highlights the uncertainty about the economics of industrial hemp. In recent years, European countries including the Netherlands, have conducted research on industrial hemp as a possible fiber for textile and paper production. There are small specialty pulp mills in Britain, Spain and Eastern Europe which process flax, hemp and other specialty fibers.