Tobacco Farmers Look to Grapes, Other Alternatives as They Diversify

Source from:  By LISA CORNWELL Associated Press Writer 05/18/2005

Seth Meranda was the fourth generation in his family to grow tobacco on his 50-acre farm in southwestern Ohio and always thought his sons would continue the tradition. Now he hopes they will become a second generation of grape growers. Meranda, who has planted four acres of grapes on his farm near Ripley in Brown County about 40 miles southeast of Cincinnati, is getting out of tobacco _ and he's not alone. Faced with the loss of the government program that set price and production control on U.S. tobacco for decades, some farmers are turning to grapes. Others are diversifying with beef cattle and grain, meat goats, vegetables, other fruits and even flowers and herbs. "My kids would have been the fifth generation in tobacco, but I'm really excited about our vineyards, and I hope one day they will be too," said Meranda, 33, who plans to add a winery. "I'm not out to rule the world. I just want to be able to farm and make a living." A $10.1 billion buyout by tobacco companies will pay farmers to give up their production quotas and move into a free market that many say will no longer be profitable for them. Even before the buyout, a lot of tobacco farmers had already seen reductions in the amount they were allowed to produce, leading to decreased profits. Declining cigarette production and reduced exports worldwide also have cut into tobacco producers' profits. Meranda received a 50-50 matching grant in 2003 through the Southern Ohio Agricultural & Community Development Foundation set up by the state to help tobacco farmers make the transition to other commodities. The foundation funnels Ohio's share of the 1998 agreement between 46 states and U.S. tobacco companies to farmers for diversification projects. "I've still got about 10 acres of tobacco, but we've cut back and we'll be out of it in a year," said Meranda. He admits that grapes aren't for every tobacco farmer trying to diversify. "Site selection is critical, and a lot more decisions have to be made before you even start," said Meranda. "Some farmers are skeptical because it takes longer to get a return on your investment than tobacco and other crops." After three years, Meranda hopes to have his first grapes in September. "Even though there is not an instant turnaround, grapes are a good investment in the long run," said Mike Widner, program manager for the Ohio Grape Industries Program. Tobacco farmers have the advantage of already having the land and the settlement and buyout money to help them get started, she said. "Ohio had the largest grape-growing industry in the country up until around 1890, and any new grapes we can get _ specifically wine grapes _ will be well received and make a good impact on our industry," she said. Large numbers of tobacco growers are expected to exit production this year, according to those in the industry. A survey of 235 produce growers by the University of Kentucky indicated that about one in three of those who grew tobacco in 2004 would not grow it in 2005. "Producers are looking at alternatives and venturing into new areas to insure they will have the income they need to stay on the farm," said Kara Keeton, spokeswoman for the Governor's Office of Agricultural Policy in Kentucky. Greg Raines, whose family owns a 780-acre farm in Adams County about 50 miles east of Cincinnati, had several greenhouses for tobacco cuttings he sells to other farmers. He has turned most of his six greenhouses over to flowers and uses the remaining greenhouse space for tobacco transplants. Raines, 33, still farms about 50 to 60 acres of tobacco with his father and brother. They also have beef cattle and grain. "If everything works out, we'll continue to grow tobacco, but the diversification money has been a big asset for everyone. A lot of farmers around here have used it for building fence and buying cattle trailers," he said. Enditem