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Tobacco Farming''s Uncertain Future Source from: Citizen-times.com 01/29/2014 
For more than a century, burley tobacco was a lifeline in the mountains. It put food on the table for a lot of mountain families and helped pay for college for their children. But that tradition has drastically declined over the past 10 years, after a 2004 federal buyout ended a price support and quota program. It likely will change even more late this year after growers receive the final payments from that buyout. "Everybody's talking about it," said Warren Anders, a Madison County grower who also operated a sales operation in Asheville for years. "People are really worried about it. This has kept us in something to eat for a lot of years." Unlike a lot of mountain growers who simply got out of the tobacco game altogether after the buyout, Anders and his four sons have continued growing burley. This year they grew about 20 acres, but Anders also will receive about $12,000 in buyout money. "I hope we can get something back in here where we're putting money back in this county," Anders said. "There ain't none here now." A $10 billion buyout plan Passed by Congress in late 2004, the buyout was designed to put $10.1 billion into farmers' hands. Payouts were based on a calculation that averaged growers' crops for the 2002, 2003 and 2004 seasons. Nationwide, the buyout of the allotment program went to about 380,000 quota holders, those people who had federal permission to grow a specific pound amount of tobacco, and 181,000 producers, who are the actual tobacco growers. North Carolina has about 76,000 quota holders, with most of those in eastern counties that grow flue-cured tobacco. Tobacco companies and importers footed the bill for the buyout, which eliminated price supports and allowed companies to buy tobacco cheaper. The allotment program ran 1938-2004 and included a price support provision. When it ended, farmers no longer had the price support system, but they also didn't have the expense of leasing someone else's allotment so they could grow more tobacco. The U.S. Department of Agriculture paid the administrative costs of operating offices that administered the program. But the price support system was paid for by the farmers and the tobacco companies. Essentially, farmers paid into the program for years and were due a payment when it shut down. Here in the mountains during tobacco's heyday, an estimated 4,000 growers cultivated burley, selling their crop in two Asheville auction warehouses, typically generating $8 million-$10 million in revenue. Neal Woody, a Leicester farmer who's been growing tobacco for nearly 50 years, said he took his buyout money in a lump sum rather than counting on the government to pay it over 10 years. He knows the future is unclear for tobacco in the mountains, Woody said. A lot of older growers got out, while some younger folks have been giving it a shot. But asked if it will continue to be a mountain tradition, Woody hedged his bets. "Not really, unless everything comes down as far as your costs go," he said, citing fertilizer prices that have spiked from $200 a ton a few years ago to $700 this year. Woody, like other growers, knows demand will remain for burley, though. A variety prized for its ability to absorb flavorings, burley usually comprises about a third of a cigarette's tobacco. It grows well in mountain soil and holds moisture from cool mountain nights and foggy fall mornings. Tobacco was king in Madison "It's still a significant crop in our county, but it's probably 10 percent of what it was in terms of economic impact," said Ross Young, director of the Madison County Cooperative Extension Service Office. "At the height of it, we had well over 2,000 growers in the county. Right now it's probably in the neighborhood of 30." Growers now essentially operate on a free market system, although some do contract with tobacco companies to secure a baseline price. While some mountain growers grew 15 or 20 acres, most tended an acre or two, which sounds like a small operation until you consider the bang for the buck. "In the heyday, you probably had some growers who could produce 3,000 pounds an acre," Young said. "At close to $2 a pound, you could grow $6,000 on an acre." In the mid-1980s, tobacco routinely generated about $14 million in annual sales for Madison County alone. Growers planting other crops can generate significant dollars, but Young said it's hard to imagine a crop that so many people could grow and make that much money. Many former tobacco growers went back to tending cattle for extra money, some switched to vegetables and others simply retired, Young said. For some growers the buyout money might've been several hundred dollars. For others, like Anders, it surpassed $10,000 annually. Young said many mountain growers often use some or all of the buyout funds to pay property taxes. "It might have an impact on whether property taxes get paid next year," he said. In a way, Anders says, "Tobacco ruined us." Farmer got used to an essentially guaranteed high-dollar return on investment. Floating on the market Between international competition and the ups and downs of the industry, growing tobacco remains a tough way to make a living. Last year's rainy weather did not help Woody, a Leicester farmer who put in 30 acres of tobacco last year. "I didn't have nothing," he said. "Everything got drowned out. Total disaster." Woody had some insurance on a small portion of his crop, but overall he's out a lot of money. Under the quota system, tobacco growers had a base price for their crop, but they could get wiped out if their crop was hit by bad weather or disease. If their crop didn't bring the support price, it went to one of nine farmer-owned cooperatives in the country, which sold it later. Now, the industry has a lot more uncertainty. Asked if the tradition will continue on with a new generation, Young paused. "That's the million dollar question," he said. "And it's not easy to answer that." Enditem Related Updates |
