Labor is Top Post-Buyout Concern for N.C. Tobacco Growers

Source from:  EMERY P. DALESIOAssociated PressRALEIGH, N.C. 02/05/2006

The increasing cost for immigrant field workers was the top concern of tobacco growers attending an otherwise upbeat annual meeting of the state's tobacco growers Friday. "The death of tobacco in North Carolina has been greatly exaggerated," state Agriculture Commissioner Steve Troxler, himself a Guilford County tobacco grower, told a few hundred people attending the Tobacco Growers Association of North Carolina. The topic of the trade group's annual meeting was survival in a post-buyout tobacco market, but the prevailing attitude was that the worst had come and better days were ahead. Banks and financial planners pitched their services to growers flush with new income streams, while tobacco seed salesmen said their sales suggested a big jump in production this year. Some growers have taken payments from cigarette makers and a federal buyout, paid off debts, and retired. Others have seen opportunity and expanded. "Fewer growers will be around, but they will grow more pounds on more acreage," said Sam Crews, the group's outgoing president, who farms about 150 acres of tobacco near Oxford in Granville County. North Carolina tobacco farmers last fall divided nearly $400 million in the first of 10 annual installments from the federal government's $9.6 billion buyout ending the Depression-era system of tobacco price supports and quotas. Starting last year, farmers were allowed to sell as much of the leaf as they could grow at whatever price they could fetch to whomever would buy it. The average price for flue-cured tobacco - the type which makes North Carolina the country's largest producer - was a better-than-expected $1.55 to $1.60 a pound under contracts with cigarette makers, North Carolina State University agricultural economist Blake Brown said. Production is expected to increase by about a third this year, he said. Also easing the economic turbulence of the year was a North Carolina court decision requiring cigarette companies to pay farmers $152 million. The payments were part of a deal stemming from the 1998 settlement between the four major U.S. tobacco companies and 46 states over smoking-related health claims. Since 1999, North Carolina farmers and quota holders have received more than $837 million from the Phase II fund, according to Gov. Mike Easley. But the cost of legally employing immigrant guest workers, mostly Mexican, is climbing, growers said. The fee to process visas and transport workers is nearly doubling to $900 for each worker, and the hourly wage is kicking up 30 cents to $8.58, said Faylene Whitaker, whose family grows about 140 acres of tobacco near Climax in Guilford County. The association's top resolutions included asking Congress to revise the H2-A guest worker program to make temporary visas for laborers easier and cheaper. Tobacco farmers should be paying closer to $6.50 an hour for hard labor, Crews said. "The cost of workers on the farm is too high," Crews said. "We must stick together and make key improvements to the guest worker program or it will put us out of business faster than any hail storm or hurricane." Growers said labor is their greatest cost in producing tobacco, nearly twice as costly as machinery or fuel for curing the leaf. But they know that work in tobacco fields is so hot, dirty and long that they couldn't produce a crop without immigrant labor. The main fear for the future is that immigration limits sought by some political conservatives would choke off the industry's labor supply. "If they limit that labor source, there's nobody to replace them," said David Hinnant, who is expanding his Wilson County acreage in tobacco by 50 percent over last year to 180 acres. Enditem