Tobacco Crop Size Facing 30 Per Cent Cut

Source from:  Daniel Pearce SIMCOE REFORMER Wednesday April 05, 2006 04/06/2006

Tobacco farmers face a "catastrophic" cut in crop size this year that will push more of them out of business, the chair of their marketing board has warned. "Preliminary indicators show we'll have a 30 per cent decline from '05 to '06," said Fred Neukamm, chair of the Ontario Flue-Cured Tobacco Growers' Marketing Board. "We've never seen that steep of a decline from one year to the next. "It's catastrophic." Most growers report they are now losing or barely breaking even following 20 years of steadily declining prices and crop sizes. Further cuts will create "a difficult market" that some won't survive, Neukamm told the Reformer. "Financial institutions have told us that some growers did not cover last year's capital (borrowed money). They say they'll be using more scrutiny. Some won't get financing." Right now, the board is in talks with the federal and provincial governments to come up with a second round of buyouts for farmers in the past two years. The hope is to get enough people to leave the industry to keep remaining growers profitable. With spring planting only a month away, "we need a big comprehensive plan and we need it quickly," Neukamm said. If the 30 per cent cut comes true, the 2006 crop will be roughly 60 million pounds. That's one-third of what it was a decade ago, and less than a quarter of its historic peak. Growers blame the anti-smoking movement and an increase in imported leaf being used by cigarette companies. The board is in talks with the federal government over the buyout -- talks that were delayed by January's election -- in conjunction with the yearly negotiation of crop size and price. Neukamm said that government officials who have been in touch with the companies gave him the 30 per cent figure. "That number could vary upward or downward," he said. In interviews with the Reformer, board officials reiterated they are ultimately seeking a total buyout for all farmers and a complete wind-up of the growing industry in Canada. Board general manager Jason Lietaer said there is little point in growing tobacco when government documents clearly show it wants to "eradicate smoking in Canada. They're saying 'We're going to put tobacco consumption out of business.' We say 'Fine. Let's put something in place to deal with it.'" Neukamm said there is "no appetite" in Canada for a U.S.-style buyout in which growers are compensated and then allowed to grow in a wide-open market system without a board to represent them. "We're suggesting a long-term exit strategy that, when it's completed, will see the elimination of tobacco production in Canada completely," Neukamm said. However, local MP and minister of human resources and social development Diane Finley has said in the past that there are farmers who want to try to grow without market supports. Enditem