Tobacco Producers Eye A New Marketing Organization

Source from:  Daily Times 03/02/2009

U.S. tobacco producers are a step closer to creating a new organization focused on increasing the amount of tobacco exported to other countries. The organization, which would be producer-funded, must be approved by the U.S. secretary of agriculture before tobacco farmers can vote on it. Larry Wooten, president of the N.C. Farm Bureau, updated members of Tobacco Associates Inc. of Raleigh on the project during the organization's 62nd annual meeting held in Wilson Friday. Tobacco Associates, which is also producer-funded, promotes U.S. flue-cured tobacco in the world market. The difference with this proposed organization is it would focus on promoting U.S. produced tobacco in general, not just flue-cured or burley. Wooten said a steering committee met in April and August of 2008. Initial support for the new organization was gained from agriculture officials with the former Bush administration. However, no meetings have been held yet with the Obama administration. The organization will have a board of directors appointed by the secretary of agriculture and will have equal representation from flue-cured and burley interests. The proposed assessment is 20 to 25 cents per hundred weight of tobacco sold. Wooten said it would generate a small amount of money, several million dollars per year, but it is a way to get the organization started. If the plan is approved by federal officials, education and outreach efforts to let farmers know about the organization will be done in every state where tobacco is produced. Wooten pointed to the successful marketing efforts of the sweet potato commission as an example of how sales of a commodity can be increased through promotion. Plans to more aggressively market U.S. produced tobacco come at a time when local tobacco farmers are facing uncertain times. Rick Smith of Independent Leaf Tobacco Company in Wilson said this week growers learned contracts they negotiated in January are being cut in terms of the number of pounds of tobacco the companies are willing to buy. Tobacco growers contract with different companies to purchase the tobacco they produce. Driving the reduction in purchases is the idea more people will stop smoking because the cost of cigarettes is going up come April 1. On April 1, the per-pack federal excise tax will rise to $1. It is currently 39 cents. Add in state taxes on tobacco products, and consumers will pay more to light up. The tax increase is supposed to help fund the state child health plan program. Smith said he doesn't think one industry should have to pay for it. Smith said any farmer with "a good history" can get a contract to sell tobacco. But Smith said the companies are contracting for what they want and "not a pound more" this year. Smith said he expects more tobacco than ever before will be grown off contract meaning growers will go ahead and grow more tobacco than they have a contract to sell. Smith told the group they can't afford to not promote U.S. produced tobacco to the fullest extent. Smith said it is time for everybody to do everything possible to grow the export trade. Enditem