Future of Maryland Tobacco Farmers Uncertain after State Buyout

Source from:  Friday, March 17, 2006 by Jennifer Fu Maryland Newsline 03/20/2006

In a three-day auction starting Tuesday, Maryland farmers are expected to sell 300,000 pounds of tobacco, compared with 1.4 million pounds last year, and 12.7 million pounds in 1992, said David Conrad, a tobacco specialist with the Maryland Cooperative Extension. ''With that little bit of tobacco, I don't see there'll be more than three buyers" this year, said. Ray Hutchins, executive secretary of the Maryland Tobacco Authority. A few years ago, as many as six buyers attended, he said. Warehouse owners make a commission from the tobacco sold at auction, but because profits have been decreasing, ''the commission isn't enough to pay the property tax, fire insurance, labor," Conrad said. Maryland's tobacco crop buyout program, which gives tobacco farmers money to voluntarily stop growing the crop and grow an alternative crop in its place, has been effective. The program, funded by the state's Cigarette Restitution Fund, was designed to end tobacco production and decrease sales of the cancer-causing product. Farmers who stop producing tobacco to take the 10-year buyout receive $1 for every pound of tobacco they otherwise would have produced. As of February, 854 Maryland tobacco farmers, representing nearly 7.65 million pounds of tobacco, had signed up for the buyout, according to the Maryland Tobacco Authority. About 150 tobacco farmers remain in the state; about 90 percent of them are Amish or Mennonite, Conrad said. If they continue to grow the crop after the Maryland auctions, they could sell directly to Philip Morris, the nation's largest cigarette company, he said. Not all farmers sell tobacco every year and some grow as little as 7 acres, Conrad said. Many farmers grow tobacco in addition to other crops. Most of the tobacco being grown in Maryland is now found in St. Mary's, Charles and Cecil counties, Conrad said. He said he does not anticipate the decline in tobacco production to have a drastic effect on the state's economy. ''Over the years the position of tobacco from the standpoint of contributing to total agriculture has become less and less important," Conrad said. ''As [the tobacco] economy has weakened, others have strengthened." Maryland sold a total of $19.9 million worth of tobacco in 1997 — about 1.5 percent of all agricultural sales in the state. By 2002, that figure had dropped to $2.7 million, making tobacco sales account for only 0.2 percent of the total for Maryland agriculture, according to data from the U.S. Department of Agriculture. Meanwhile, nursery and greenhouse products increased in importance, moving from 9 percent to 14.6 percent of the total agricultural sales in Maryland in those five years. Conrad said some farmers have also turned their land into tourist spots, featuring hayrides and corn mazes. Poultry and eggs were the top-grossing agricultural products in the state in 2002, making up 45 percent of agricultural sales. Enditem