State Spends Millions to Get Farmers Into Different Crops

Source from:  By CLAY CAREY Staff Writer 04/19/2007

Tennessee tobacco acreage falls For generations, a large metal arch over the main highway into this town boasted that it was home to the "World's Finest Dark Fired Tobacco." Tobacco warehouses dotted the landscape around Springfield's public square, symbols of the big business that tobacco was. Today, the metal arch is gone. With auctions a thing of the past, most of the old warehouses have been boarded up or converted into other businesses. Robertson County, like other counties in Tennessee, is experiencing a decline in the production of tobacco, a crop that once fueled the economies of farming communities across the state. Tennessee may soon drop out of the club of the biggest tobacco producers altogether, state Agriculture Commissioner Ken Givens said. The end of federal price supports for tobacco farmers and the demise of Tennessee's smaller-scale family farms are part of the story. The state wants to more than double agricultural enhancement grants, to $11 million this year, in part to help farmers get out of tobacco and into more profitable agricultural ventures. "Tobacco is not what it once was," Givens said. "In my opinion, it's never going to go back to what it once was." According to a recently released USDA report, 750 fewer acres of tobacco will be planted in the Volunteer State this year than were set out last year. If the forecast is correct, 2007 will be the eighth straight year that tobacco planting has fallen in Tennessee. The state's downward turn goes against the national trend - prices crashed in 2005, driving many away from the crop, but tobacco farmers across the country planted more acres in 2006 than they did in 2005, and are expected to plant more this year than last. Small producers retiring Traditionally, Tennessee has been the nation's third-biggest producer, behind North Carolina and Kentucky. Farmers in Virginia and South Carolina will plant more tobacco than Tennessseans this year, and Georgia will only be 50 acres behind, if the USDA is right. Federal price supports for tobacco ended in 2005. Tobacco farmers had lobbied for the $10 billion buyout, which ended the decades-old quota system and created a free market for the crop. Many farmers who owned tobacco quotas used their part of the buyout to retire. Those who stayed in the business found that the small growing operations encouraged by the quota system weren't as profitable without it. "Without the (quota) program in place, prices dropped dramatically in 2005," said Kelly Tiller, an agricultural economist with the University of Tennessee's Agricultural Policy Analysis Center. Many of Tennessee's traditional tobacco farmers were small producers - "they may have had a job in town and just grown tobacco on the side," Tiller said - and simply could not afford to take the hit. "These very small growers are not interested in scaling up, so they are growing less or getting out," Tiller said. After a half century in the business, Robertson County tobacco farmer Robert Williams can't afford to produce more - he raises about 20 acres now. So he'll probably get out. "Just about everybody I've talked to says the same thing. There's just not much left." Tobacco and cattle were Bill Corbin's primary business 10 years ago, and tobacco remains promising to him, because he was willing to go big. Corbin will set out about 52 acres of tobacco this year. He'll also grow about 4.5 million seed lings to sell to other farmers. Three or four years ago, Corbin said, a "huge percentage" of growers in the area harvested five or 10 acres. Today, he said, those small farmers make up less than a tenth of his plug customers. "The number of growers is diminishing substantially," said Corbin, whose Springfield family has branched out into other agricultural endeavors, including flowers and fresh-water shrimp. Terry King is thinking tomatoes. King has raised tobacco plugs - sprouts that farmers plant in their fields - on his Cedar Hill farm for years. "We were doing 5 million (plugs in the late 1990s). Now we are down to 1 million." He's going to abandon plugs in one of his three greenhouses in favor of tomatoes, and, with luck, be out of the tobacco business altogether in three years. Other states plant more In other states, the number of tobacco farmers is sliding as well - but bigger farms are picking up the difference. Though production of tobacco nationally has fallen since 2004, Kentucky tobacco farmers are expected to plant 88,500 acres this year, a 7 percent increase over last year. Acreage is also expected to climb in Georgia, Pennsylvania, Virginia and several other tobacco-producing states. According to the USDA, only Tennessee and South Carolina are expected to plant significantly fewer acres this year. In North Carolina, the state is offering cash incentives to farmers who will try to grow burley - the type of tobacco used in cigarettes - in areas where there is no tobacco. Tennessee offers agricultural enhancement grants that do just the opposite - help farmers get out of tobacco and into more profitable agricultural ventures. Last year, the first year ag-enhancement grants were offered, the state budgeted $5 million. For the upcoming fiscal year, the governor has proposed hiking that to $11 million. As it stands now, agriculture commissioner Givens said, tobacco is a "very marginally profitable" crop here. "Farmers usually gravitate toward where they can make the most money," he said. The market for smokeless tobacco is growing at a faster rate, as is local interest in growing the dark fired tobacco used to make snuff and other smokeless products. According to the USDA, 550 acres of dark air-cured tobacco will be planted in Tennessee in 2007, 10 percent more than last year. Forecasts of lower tobacco production in Tennessee don't concern Harmon Jones. Jones has about 25 acres of tobacco this year. Thanks to the demise of the quota system, he was able to grow more. "You can make money in tobacco if it's handled right. … If you try to work in a factory and do it (as a second income), it won't work," Jones said. "It's been rumored that tobacco is going out ever since I was a little boy," the 70-year-old farmer said. "It's still here." Enditem