WNC Tobacco Farming Faces Troubling Trend: Growers Getting Out

Source from:  by John Boyle, JBOYLE@CITIZEN-TIMES.COM published June 6, 2006 12:15 am  06/07/2006

Those who work in the burley tobacco industry knew an exodus of growers was coming in the wake of the 2004 buyout that ended a 66-year-old federal price support program. But no one expected this: About half of the mountains' 4,000 growers have quit. Farmers began receiving buyout payments last fall, so this is the first full growing season to gauge just how many have gotten out. "I figured the first year the growers would take a wait-and-see approach and then it would stabilize," said Aaron Martin, the U.S. Farm Service Agency's district director for Western North Carolina. "I thought eventually we'd see about the same number of growers, but it's been a more significant loss than I anticipated." For decades, burley tobacco has been a mainstay cash crop - and a way of life - for mountain farmers. But with fuel and fertilizer costs soaring and the price for burley falling, many farmers are getting out of the business even though demand remains strong. "Basically, I quit," said Harold Davis, a 47-year-old Yancey County farmer who had produced a tobacco crop every year but one since he was 18. "I just expanded my produce operation. I didn't see any future in it." Demand strong, but farmers wary Davis' story is a common one since the federal tobacco buyout legislation went into effect last year. The buyout ended a price support program in place since 1938 and provided a lump payout to tobacco growers spread over 10 years, with the first payment going out last fall. Demand remains high for burley, which grows particularly well in the mountains because of the soil and climate. It's prized for its flavor and absorptive qualities and makes up about one-third of a typical cigarette. Because of strong demand, the price for burley is expected to rise by 8 cents to 15 cents a pound this year, experts say. It averaged $1.58 a pound last year, compared with $1.98 in 2004. Generally speaking, farmers could always count on tobacco generating about $2,000 an acre in profit, but that number has dropped with the lower price. The idea with the buyout is that farmers no longer would be restricted on how much they could grow or have to pay high lease rates to quota holders to grow on their land, thereby reducing expenses. But labor, fertilizer and fuel costs have gone up so much the savings have essentially evaporated. Charles Zink, executive director of the Farm Service Agency office in Madison County, says the small growers - who ironically grow some of the best tobacco - got hit particularly hard after the buyout. To secure a contract, tobacco companies usually want growers to put in at least five acres, which eliminates smaller growers unless they want to sell at auction in Asheville. "It's just basically wiped out the small farmer who was growing less than five acres of tobacco," Zink said. "Most are taking the (buyout) money and investing it or using it to replace the income from tobacco, which it doesn't come close to doing. Some are trying to make it up with livestock - beef cattle - because the prices are up and the cattle income was pretty good over the past year." Zink estimated Madison County, the largest burley-growing county in North Carolina, probably had 200 to 300 growers last year, compared with 698 in 2004, the last year the tobacco program was still in place. In Yancey County, Stanley Holloway, the regional burley coordinator with the county's N.C. Cooperative Extension Service office, says Yancey has about 80 growers left, down from 150 before the buyout. Some were "aging out" anyway and ready for retirement, some grew only small plots of tobacco and others just couldn't justify the expense and reduced profits. "Growers in Western North Carolina generally tend to be an independent sort, and there's a reluctance there as far as contracting with the tobacco companies," Holloway said. "It's probably going to take two or three years for things to shake down and some normalcy to come into the system." Farms may disappear Bill Boone, a Madison County farmer, grew his first tobacco crop at age 14. At 51, he'd like to keep growing, but he doubts he will after he harvests his 15-acre crop this year. "I've got my cattle, and I'm going into a pretty good-sized goat operation," he said. "It's right lucrative now, if I can ever get it all set up. The price on fencing has doubled." Boone says he's getting out because labor is hard to find and profit margins have dwindled. That was part of the buyout deal - the big companies agreed to foot the bill, but they wanted tobacco's price to go on the open market and to drop. He wonders what other farmers will do as more producers in the eastern part of the state get into burley production, as well as farmers in other countries. "What are they going to do with this old mountain land?" Boone asked. "Madison County is going to become a gated community. Everybody is going to have to sell off their old farms because they can't afford to pay taxes on them." Buster Norton, who will tend about a dozen acres of burley in the Grapevine community of Madison County this year, says he'll stay in tobacco production because he's got all the equipment, a greenhouse for producing young plants and because "it's what I like to do." But he worries about what will happen to the county his family has called home for generations. "A lot of people are selling their property for development," said Norton, 56. "When I was young, you hardly ever saw a 'for sale' sign.' Now those signs are all over." Enditem