Canada's Growers Take Big Hit in Crop Deal for '08

Source from:  tobaccojournal.com Oct 9, 2008 10/17/2008

The Ontario Tobacco Board has accepted a deal with cigarette makers for the 2008 crop, but no one is pleased with it. The agreement, takes as a "take-it-or-leave-it" arrangement according a story in the Bantford (Ontario) Expositor, sets a crop size of just 23.15 million pounds at a target price of $1.92 a pound. That is 35 cents a pound lower than the 2007 target price and 27 percent smaller than the 32 million pounds sold at auction last season. Ontario Flue-Cured Tobacco Board chairwoman Linda Vandendriessche called the agreement "dreadful" and said the deal was made "under duress." But she said that "we have a responsibility to provide a legal avenue for the sale of this year's crop." Agents for cigarette companies Imperial Tobacco, JTI Macdonald and Rothman's Benson and Hedges, along with export buyers, were firmly entrenched on price and crop size and left little room to negotiate. Some 1,500 growers in tobacco growing counties in Ontario are now facing selling a good crop - a crop they raised without an agreement in place - under conditions that clearly will not pay them enough to break even, let alone turn a profit. Enditem