Tobacco talks urgent as planting season looms

Source from:  HANK DANISZEWSKI, Free Press Business Reporter 05/13/2004

Time is running out for anxious tobacco farmers waiting to see how big a crop they can grow this year. Negotiations for cigarette manufacturers and the Tillsonburg-based Ontario Flue-Cured Tobacco Growers Marketing board were back at the bargaining table yesterday trying again to hammer out an agreement on the size and pricing for the crop about to go in the ground. "It's been very frustrating. There's been little progress. We have fundamentally opposing views over pounds, price and imports," said Fred Neukamm, chairperson of the marketing board. The talks stalled after Imperial Tobacco, Canada's dominant manufacturer, demanded gradual elimination of a premium "top-up" payment for tobacco used in the domestic market. Imperial representative Christina Dona said there has been "some movement" in the crop negotiations, noting it has been typical in recent years for the talks to go down to the wire. Dona said the domestic tobacco market has been steadily shrinking and Imperial's share of that market eroded last year. She said the top-up payments are a subsidy Imperial can no longer afford. Neukamm said the loss of the top-up payment will devastate the Ontario industry. But Neukamm said time is also running out for tobacco farmers who need to get the planting process started before the end of the month. "It is critical for us to give an indication to our growers within days." Last year, the size of the tobacco crop dropped to 42.7 million kilograms, the smallest since the board was established in 1957. Tobacco growers got some good news last week when federal Agriculture Minister Bob Speller announced a $71-million package to compensate and retrain growers getting out of the industry and to monitor tobacco imports into Canada. But that was followed by bad news at the Ontario Tobacco Control Conference, where Ontario Health Minister George Smitherman slammed the tobacco industry for leaving a "trail of death and destruction." Representatives from the industry were refused permission to attend the conference. Hundreds of tobacco growers have left the industry in recent years and there are only about 770 left in the province. Enditem