FARM SCENE: Tobacco Farmers Diversifying

Source from:  asia.news.yahoo.com By LISA CORNWELL, Associated Press Writer  05/20/2005

Seth Meranda was the fourth generation in his family to grow tobacco on 50 acres 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 is getting out of tobacco - and he's not alone. Faced with the loss of the government program that set tobacco price and production controls for decades, farmers are turning to not only grapes but also beef cattle, grains, vegetables, and even flowers and herbs. "I've still got about 10 acres of tobacco, but we've cut back and we'll be out of it in a year," Meranda said. A survey of 235 produce growers by the University of Kentucky showed 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 ensure 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. ADVERTISEMENT About a 30 percent decrease in production is expected this year across the burley belt of Ohio, Kentucky, Missouri, Indiana, Tennessee, Virginia and North Carolina. But tobacco farmers are resilient, said Donna Graves, marketing director for the Lexington, Ky.-based Commodity Growers Cooperative that serves Ohio, Indiana, Kentucky and Missouri. "Those who can will continue to work tobacco, and those who can't will go to other commodities to keep their farms going," Graves said. 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, tobacco farmers already had 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. In Ohio, Meranda, whose Brown County farm is about 40 miles southeast of Cincinnati, received a 50-50 matching grant in 2003 through the Southern Ohio Agricultural & Community Development Foundation. The foundation was set up by the state to help tobacco farmers make the transition to other commodities and funnels Ohio's share of the 1998 agreement between 46 states and U.S. tobacco companies to farmers for diversification projects. 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 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," he said. "A lot of farmers around here have used it for building fence and buying cattle trailers." Enditem