Farmers at the End of Tobacco Road

Source from:  By Jim Warren HERALD-LEADER STAFF WRITER NICHOLASVILLE 05/26/2005

Many don't trust contract system Normally, Terry Lunsford would be setting burley tobacco about now on his Jessamine County farm, laying down perfectly spaced rows of young, green plants ready to grow into gold. But without the backing of the federal tobacco support program, which ended after last growing season, Lunsford, 50, has decided not to raise tobacco. Not this year, and maybe never again. "I guess it's the first time in 85 years that there won't be any tobacco raised on this farm," Lunsford said. "We've got the greenhouses to raise the tobacco plants, and the barns to house the tobacco, but they're all empty. It feels a little funny." It's feeling a little funny, too, at Evan McCord's Madison County farm. He isn't raising tobacco this year either. "I'm 57 years old, and I live on the farm where I was born," McCord said last week. "From the time I was a child, everything we did revolved around tobacco. It was our main deal. You can't take away something that's been a part of your whole life and not feel different." McCord and Lunsford are far from being alone. Across Kentucky, many farmers are bailing out of tobacco this year, reluctantly abandoning a crop that for generations has been the economic mainstay for the state's farm families. It's unclear exactly how many are getting out. But agriculture officials say that in many counties, nearly half of the farmers who raised tobacco last year won't raise it this year. Most are deserting tobacco because they fear that raising the traditional crop will be too risky without the price supports and other guarantees that the old federal program provided. All hope to make up the lost tobacco income by raising more cattle, switching to other crops such as vegetables or cut flowers, or finding jobs off the farm. But they aren't sure what the future might hold, and agriculture officials fear that some farmers could find themselves in a financial pinch at year's end. Things could be equally uncertain, at least in the short term, for Kentucky farmers electing to keep raising tobacco and selling it directly to tobacco companies under contract agreements. According to University of Kentucky projections, contract prices this year are expected to average around 25 percent lower than the average paid at warehouses in 2004, the last year under the old federal auction system. Also, farmers will have no guarantees now. Indeed, a farmer's entire tobacco crop presumably could be rejected if it failed to meet company standards. Agriculture officials say it will take a few years to see how the new system shakes out. In many ways, it's the dawning of a new and confusing world for Kentucky farmers. "Most people are kind of in a daze; they don't know which way to go or what to do," said Fayette County's Harold Prather, 78, who has been raising tobacco since 1944. It all stems from Congress's decision last year to abolish the 1930s-era support program and buy out farmers' production quotas over the next decade. To be sure, tobacco is not the king it once was. Cash receipts from tobacco in Kentucky peaked at $924 million in 1998 and then fell, with cutbacks in quotas, to the $400 million range just before the buyout. But for 70 years, the federal program's combination of production limits and price supports assured Kentucky tobacco farmers that there would be a market for their leaf at a guaranteed minimum price. It enabled even small farmers to build a way of life around a crop that demanded back-breaking labor but offered a handsome payoff at year's end. Farm life followed the rhythm of tobacco -- seed-planting in early spring; setting in late spring; nurturing the growing plants through early summer; housing the crop in late-summer heat; stripping it in the fall; selling it in the cold of winter. But the federal program became increasingly controversial over the past 30 years, attacked by government cost-cutters even as scientists uncovered increasing evidence of tobacco's devastating health effects. Now it's gone, taking much of the old way of life with it. "You could be talking about the death of a culture," Franklin County Agriculture Agent Keenan Bishop said. Terry Lunsford said he decided to opt out of tobacco this year because he fears tobacco companies will impose new grading or quality standards that will be tough to meet, and that tobacco prices will be down significantly. He says he can do better by running more cattle and expanding other areas of his farm operation. "I don't know whether I'm doing the right thing or not," Lunsford said. "It might be that I'll have to come back to tobacco in a year or two if things don't work out from a financial standpoint. But you have to change." Evan McCord also says it will be harder for farmers to make money selling directly to the tobacco companies. "If the companies don't buy your tobacco," he said, "there's absolutely nothing you could do with it." Scott County's Mark Wells agrees. He's producing tobacco plants to sell to other farmers this year, but he is raising no tobacco crop of his own. "With no price support, you're taking on a whole lot of risk, and there's no guarantee you can even get the tobacco sold," Wells noted. "If something happened to it, if it cured up yellow or whatever, the companies don't have to buy it. You have to invest too much money in a crop to take that kind of risk." Wells should be well-prepared for life without tobacco. He began raising flowers four years ago -- using the same greenhouses he originally built for tobacco plants -- and he now sells them from spring through Christmas. He also has boosted cattle and hay production. But some farmers getting out of tobacco might not be as well prepared, warns Mac Stone, director of value-added plant production for the Kentucky Department of Agriculture. "From what I see and hear, it hasn't hit home with everybody yet," Stone said. "We're concerned about how many people are going to get to the end of the year without that tobacco check, but haven't transitioned into diversified operations. Having a few thousand dollars less at the end of the year could be a lot for some people. And some smaller rural communities are going to see less income coming into the community itself." Stone says that from the estimates he's seen, half or a little less than half of farmers aren't growing tobacco this year. Most of those getting out are older farmers, he said, or small farmers who raised only a little tobacco to supplement their incomes and are reluctant to try the new contract system. On the other hand, Stone said, some larger operators apparently are growing more tobacco than ever this year, since they're no longer constrained by the quota limits set by the old support program. As a result, Stone and some others say that overall production in pounds might be down only about 25 percent from last year. Some officials also say that tobacco production increasingly will shift to Western Kentucky, where larger acreage could allow improved economies of scale. "There will still be a lot of tobacco produced, you'll just have fewer people producing it," Evan McCord says. Still, farmers who keep producing tobacco could face some challenges, the experts say. "The tobacco companies are going to be more strict with their quality standards, and farmers could be at the mercy of the weather as far as achieving some of those standards," Mac Stone said. "Before, there weren't a lot of unknowns. Farmers pretty well knew how much labor they'd need, how much equipment, and when they would have to do what. Now, there will be a lot of unknowns." Many of the farmers who are giving up tobacco insist they have no sentimental regrets about leaving a crop that took so much hard work and worry. And yet some are finding it isn't easy to say goodbye. Joe McFarland Jr., who farms in Scott County, decided over the winter not to raise tobacco this year. But when the days turned warm, McFarland heard the fields calling. For a few weeks he wavered, leaning toward raising a crop one day, leaning away from it the next. Ultimately, he decided to stay out of tobacco, but it was a struggle. "We haven't been making a whole lot of money from tobacco the past few years, but farmers have always taken a lot of pride in raising it," McFarland said. "It was always enjoyable early in the spring, when everything would be nice and green, and it felt good to be out in the morning cultivating the fields. "It's just kind of hard to quit." Enditem