Auction Under Threat as Crop Declines in Canada

Source from:  tr.itsmyiq.com Oct 17, 2007 10/18/2007

This could be the last season that Canadian tobacco farmers sell their leaf at the Delhi Auction Exchange, according to a report by Monte Sonnenberg for the Times-Reformer. The country's crop has fallen from an historic low of 55.6 million lb last year to an estimated 32 million lb this year; so while almost 140 people worked at the auction exchange last year, this year that number is down to 67. The report quoted Chuck Emre, the manager of the exchange, as saying that the writing was on the wall. "It looks that way because of the crop size," he added. "We just can't do this at the fee farmers are charged anymore to market their crop." In recent times, the industry has been trying to negotiate an exit strategy for tobacco farmers, many of whose operations have shrunk to the point where they are no longer economically viable. Since last fall, the Ontario Flue-Cured Tobacco Growers' Marketing Board has been seeking a buyout of 271 million lb of quota. The board is asking $2.62 a pound for 1,559 quota holders, a package that would be worth $710 million. One farmer, Jon Lechowicz, whose family has been growing tobacco since 1930, made the point that federal and provincial governments had a duty to compensate farmers. Lechowicz, whose family has grown as much as 150 acres of tobacco in the past but this season planted only 30 acres, said that everyone felt they were entitled to compensation for what the province and federal governments had done to their families. "Governments are the biggest stakeholders in this business yet they have the least amount of investment," he said. "They haven't been forthright with us." Enditem