Tobacco Growers Told More Exit Funds Needed

Source from:  HANK DANISZEWSKI, Free Press Business Reporter 07/11/2005

After a tough year that saw hundreds of producers bail out, the head of Ontario's tobacco board says it's time to retrench. At the annual meeting of the Ontario Flue-Cured Tobacco Growers' Marketing Board yesterday, chairperson Fred Neukamm said $100 million in federal and provincial money to compensate growers getting out of the industry was only a start and a long-term program is needed. "Our message to government is that we have bought ourselves some time. Nothing else," said Neukamm, who farms near Aylmer. Former federal agriculture minister Bob Speller and former provincial agriculture minister Steve Peters, who represented tobacco belt ridings, helped engineer the deal. Speller was defeated in the last federal election and Peters was recently shuffled to the labour portfolio. About 232 farmers took advantage of a government program to buy out their quota. That leaves less than 650 tobacco growers in the industry, down from about 3,700 at its peak. The crop target will shrink again next year to about 85 million pounds. Neukamm and other board directors came under criticism in the last year for not negotiating a better bailout deal. In January, angry producers blocked the doors of the board office in Tillsonburg with tractors, forcing Neukamm to hear their demands in the parking lot. The mood at yesterday's meeting was subdued, with only a few questions from producers. "I think more people understand what it's like to negotiate with government," Neukamm said after the meeting. "We did the best we could with the card we were dealt." But he said the industry still faces serious threats with Canadian processors buying more cheaper foreign tobacco. Imports reached 15 million pounds last year. Neukamm said the board is asking Ottawa to launch a trade action to cut off or limit the flow of imports. He said there is hope for Ontario producers in developing export markets in China, which bought 10 million pounds of Canadian tobacco last year. With a huge population, China is one of the few nations where tobacco consumption is growing. "It is the target market for tobacco producing markets around the world," Neukamm said. He said the tobacco board plans to meet with federal and provincial officials to discuss another long-term buyout program and high taxes they say encourage black-market activity. Neukamm conceded the government's anti-smoking campaigns will continue. "We recognize we are not going to win the health argument. We have no issue with that." Enditem