Tobacco in Race Against Clock

Source from:  Daniel Pearce - SIMCOE REFORMER Friday October 28, 2005 Simcoe Reformer 10/31/2005

'TIME FRAME IS WEEKS,' SAYS BANNISTER Canada's tobacco farmers face extinction unless they can stop the country's biggest cigarette company from switching to imports within the next few weeks, a growers' lobby group has warned. "If we lose half this crop, we're done," said Mark Bannister, vice-chair of Tobacco Farmers in Crisis. "If something is not done and done quickly, the time frame is weeks." Imperial Tobacco announced Oct. 20 it will close its processing and manufacturing plants in Aylmer and Guelph and move operations to Mexico. The fear is that Imperial, which in the past has bought up to three-quarters of Ontario's crop, will now rely entirely on cheaper leaf grown abroad for the cigarettes it sells in Canada. If that happens, the country's growing industry - centred mainly in southwestern Ontario - will unravel overnight, warned Bannister, who grows near Vanessa. Banks will refuse the loans farmers need every spring in order to plant and will call in existing debts, he predicted. "There's not a bank in the world that will touch us," Bannister said. His group, which represents roughly three-quarters of the country's tobacco growers, has stepped up its campaign to convince Ottawa to set limits on imports. It is calling for a cap on foreign-grown tobacco in Canadian cigarettes of 10 per cent. Right now, about 35 per cent of tobacco smoked in Canada is from other countries, Bannister estimated. At one time, that number was less than 10 per cent, but has crept up over the past eight years, he said. What's grown in Ontario's fields has followed downward, from 151 million pounds in 1997 to a 85 million this year. Fred Neukamm, chair of the Ontario Flue-Cured Tobacco Growers' Marketing Board, said it is unclear what Imperial will do after it moves its manufacturing to Mexico. "They've given us assurances they will honour this year's contract and continue to purchase Ontario tobacco," Neukamm told the Reformer Thursday after being elected chair for another one-year term. "The question remains how much and at what price. "Our fear is that the other manufacturers (JTI-Macdonald and Rothmans, Benson & Hedges) may follow suit." Neukamm called the situation "critical" and reiterated the board's call for negotiations on the future shape of the industry with government, farmers, and manufacturers and for another round of buyouts for growers. The industry, he said, is on "a slippery slope that is getting steeper." An agreement is needed before negotiations for the size and price of the 2006 crop are completed in the spring, Neukamm said. Imperial is moving its last two Canadian manufacturing facilities to Mexico in order to save on production costs and will have to follow NAFTA content rules which automatically limit the amount of foreign tobacco used, said company spokesperson Christina Dona. However, she added that the "issues" over price between the board and the company remain. "We believe we can find a solution to that and have our issues addressed and the long-term tobacco growing industry in Canada made sustainable," she said. She estimated that the foreign content in Imperial's cigarettes are five to 15 per cent, and probably "closer to 15 per cent." Bannister said MPs and MPPs from tobacco-growing ridings are working with his group to convince Ottawa to limit tobacco imports. "If we don't secure Canadian content, we're done," he said. The argument being put forward is centred on the health of consumers. Canadian officials will have no control over the pesticides and chemicals used in growing tobacco overseas, Bannister warned. Under international trade rules, Canada can block imports based on "health reasons," he said. Enditem