Local Tobacco Growers Use Buyout to Diversify Farms

Source from:  Asheville (NC) Citizen-Times By John Boyle, Senior Writer 11/08/2004

For thousands of mountain farmers, tobacco has been the cash crop of choice for decades. But all that's changing these days. For years their quota - the amount the government allows them to grow - has been cut drastically. And last month Congress passed a $10.1 billion tobacco buyout bill that will give them a payout but remove a price support system in place since the Depression. [img border=0 hspace="4" vspace="4" align="left" src=http://www.tobaccochina.com/english/picture/9368.jpg] In short, tobacco farmers see the writing on the wall: It's time to diversify or consider getting out of leaf production altogether. "I've grown tobacco all my life, as much as 22 acres at one time. But I've only got five acres this year," Yancey County farmer Harold Buchanan said. "I don't think there's any future in it. I think it's just going to be the big companies controlling it." With that in mind, Buchanan and partner David Bodford are going into the ornamental shrubbery business, thanks to a new grant program administered through the N.C. Cooperative Extension Service that's designed to help farmers in tobacco- growing regions diversify. Last year, the service, in partnership with the N.C. Department of Agriculture and HandMade in America, secured a $198,210 grant from the N.C. Tobacco Trust Fund Commission and has disbursed 51 grants of $2,500 each this year to help farmers explore new options. Exploring new options At Bodford's place near Burnsville in Yancey County, he and his partner built a new greenhouse where they've seeded hundreds of rhododendron Catawbiense, the same variety that made Roan Mountain famous. "I'm going to make it work," said Bodford, 39. "Any future at all in this will be better than the future in tobacco. Tobacco is just about over, I'm afraid, so we're just trying to get something started before everybody else does." The extension service got 104 grant applications, awarding 54 percent of them to tobacco growers. The grants, which are geared toward "agricultural tourism and crop diversification," are not designed to finance the complete transition to a new product but rather provide seed money - sometimes quite literally. "What we're doing is reducing the risk," said Erin Jasin, the western district project coordinator for agricultural tourism and crop diversification for the extension service. "We're helping them take the economic risk. The people I work for aren't asking to get rich." Jasin is based in the Buncombe office but works with farmers in 15 western counties, including seven in Yancey County. The tobacco price support program worked well for decades, Jasin says, but it hurt growers in one crucial area. "The tobacco program has handicapped people from going out and marketing their products," she said. "The overall grant is to provide some incentive money for farmers to try agri- tourism or alternative crops or some other enterprises." Yancey County has about 350 tobacco growers, most producing a few acres of burley. It typically generates from $2.5 million to $4 million a year. Appalachian region will be hardest hit Tobacco is big business in the mountains - every year about 4,000 mountain farmers sell their crop in two Asheville auction warehouses, typically generating $8 million to $10 million in revenue. Other growers contract directly with tobacco companies. In all, local growers tend about 7,000 acres of burley tobacco, which has been an economic mainstay since the late 1800s. But mountain production doesn't come close to Kentucky and Tennessee, which have abundant flat land and larger farms. "With the tobacco buyout, it's going to be very difficult for our producers in Western North Carolina to compete with growers in other areas," said Stanley Holloway, an extension agent in Yancey who helped write the grant. Blake Brown, an agricultural economist with N.C. State University, agrees. "When tobacco production is deregulated, the Appalachian region will see the greatest decline in tobacco production," he said. "Fortunately, farmers will have the buyout to help with the transition, but I think programs like (the agricultural tourism and crop diversification program) are very important to provide some seed money to look at other markets. I think these kinds of programs are great. The reality is, and what a lot of people don't realize, is that even if we didn't have the buyout, many of these farmers would've been facing this transition anyway." That's because in recent years tobacco growers have seen their quotas cut in half. Bodford and Buchanan, who has 10 greenhouses for starting tobacco plants, say their sales of burley seedlings dropped from 650,000 plants two years ago to 350,000 last year. At $40 per thousand plants, that's a $12,000 drop-off. They're looking forward to the ornamental business generating more cash flow than tobacco. Buchanan plans to use those 10 greenhouses for ornamentals production. "I believe we're going to make more out of it - if we get into the market," Bodford said. "And the market's there." Starting over Farmers like Buchanan, Bodford and Carl Patterson, a Graham County tobacco farmer, know in some ways they're starting over. "You got to learn a lot," said Patterson, who's grown tobacco every year but one out of the past 35. "When I really got started with this was this past spring. I had a few goats before then, but that was just something for my grandkids to show." He's raised some cattle in the past, but goats are a different ballgame, and he's got to find that all-important market. But Patterson, who's subscribed to a magazine geared toward goat farmers, says the market is strong in North Carolina and America overall. "We're way down (in production) - they're importing goat meat right now, so I think that's a good thing to get into," Patterson said. Patterson, who also grows sweet corn, beans and potatoes, used his $2,500 grant for fencing and seeding a pasture. He bought his herd of 50 goats with his own money and says he never expected a big windfall from the grant. "If they was going to give you a living, I'd take the money and forget the goats," Patterson said with a laugh. For Paula Miller, one of the grant recipients who's not a tobacco grower (the grants are available to farmers in tobacco-growing regions), the money allowed her and her husband to get started on producing biodiesel, a fuel made from vegetable oil. "It allowed us to do something either we never would've tried to do on our own or certainly not on this scale," Miller said. They collect waste vegetable oil from local restaurants and combine it with a catalyst (methanol) to produce a fuel that any diesel vehicle can run on. Working out of their garage, they've produced 200 gallons so far. The materials cost about 75 cents a gallon, and with labor they estimate their cost at $2.50 a gallon. But if biodiesel catches on (methanol comes from another renewable resource - corn), they expect the price to drop. "It's the bigger picture," Miller said, noting that the product could help America kick its dependence on foreign oil. "It's 100 percent biodegradable, and farmers can grow all the ingredients." Plenty to learn Bodford and Buchanan, who used their grant to build a climate-controlled greenhouse, don't have any political concerns about their product. But they do have plenty to learn about growing ornamentals. "It's just unfamiliar to you," Buchanan said. "We didn't know how to do it until we got going. Growing tobacco was no problem for us, but it took three times to get these going. But we got them going." They know it may take a couple of years to get the ornamentals large enough to sell to wholesalers. "This product is a lot different," Bodford said, standing next to plastic trays filled with tiny rhododendron just beginning to pop through the soil mix. "It's harder to grow - a lot more delicate, it takes longer and you've got to have more equipment to do it." Bodford, who's worked in industrial maintenance at the Hickory Springs plant in Micaville, isn't afraid of a little hard work, though. And neither is Buchanan, whose weathered, lined face bears testament to a lifetime of hard farm work. "I'm going to grow something," Buchanan said. "I'm not going to quit." Contact Boyle at 232-5847 or JBoyle@CITIZEN- TIMES.com. Grants continuing The N.C. Cooperative Extension Service in 2005 will be awarding 30 more $2,500 grants through its agricultural tourism and crop diversification program. Applications are available beginning Dec. 1. Contact your countys cooperative extension service for information. To learn more about the program, visit. Enditem