My last commentary "Tobacco Leadership Questioned" really hit a hot button for many Southeast Farm Press readers. I've never received so many calls, e-mails and letters on one topic.
Most of you who responded are looking for guidance (leadership) on a whole raft of tobacco issues. Do you retrofit bulk barns with heat exchangers now or wait until later? Do you seek contracts for tobacco sales next season or depend on the auction system? Should you bale tobacco for domestic purchasers or listen to export buyers and put your leaf in sheets? Should you vote for or against the tobacco program when the referendum comes up in January? Should you put your name on the growers' suit against domestic cigarette manufacturers? Should you ask the federal government to buy up all the tobacco quota at $8 per pound for owners and $4 per pound for growers.
One tobacco leader who is working toward helping you make the right decisions on these and other crucial tobacco policy issues, Larry Wooten, president of the North Carolina Farm Bureau Federation, called shortly after he read my last commentary. He did not hesitate to offer straightforward advice on several of the key issues, along with insightful observations on others.
"We need to take these issues one piece at a time and try to find positive solutions," Wooten says.
On barn conversions, he says, "It doesn't matter what else happens, contracts or auctions or some of both, continuing the tobacco program or not, if a farmer grows flue-cured tobacco in 2001, I think there will be a program in place to certify that any tobacco eligible for price support has been cured in a barn that does not allow combustion gases to come into contact with the tobacco. Farmers need to make plans now and get as many of their barns retrofitted with heat exchangers as they can. They need to take advantage of the reimbursement program through Stabilization to retrofit their barns now. Don't wait."
The issue of contracting directly with cigarette manufacturers rather than selling through the auction system is almost as clear in Wooten's eyes. He is convinced that contracting is here to stay and that it presents a serious challenge to the production control and price support program as well as to the livelihoods of tobacco warehousemen.
"I think contracting can co-exist with an auction marketing system, or a marketing system that is revamped and revitalized from what we have today," he says. "We must have an alternative marketing system in place along with contracting. Currently all contracts are for domestic usage. We've got to protect our export markets and give export buyers an opportunity to buy U.S. tobacco through an auction system or some kind of alternative marketing system."
Wooten insists that the Tobacco Industry Leadership Committee as well as other tobacco leaders are diligently studying ways to improve the current tobacco program, including the current marketing system. He encourages individual growers, warehousemen and others to stay involved in those discussions.
On the tobacco farmer and quota owner lawsuit against cigarette manufacturers, Wooten says, "Whether or not to participate is an individual's choice. Farm Bureau does not endorse the suit. To sue the purchaser of your product may not be in your long-term best interest if you are a tobacco producer who wants to continue to be in the tobacco business."
Is it time for the tobacco program with its quotas and price supports to go? Wooten's answer to that question is clear.
"If you don't like the tobacco program, try Freedom to Farm," he says. "Before you consider throwing the tobacco program away and saying it has outlived its usefulness, consider what has happened to non-program crops under Freedom to Farm."
Some tobacco growers and quota owners continue to hold out hope that the federal government will buy up their quotas if an agreement is reached to eliminate the program. Some still cling to hopes of receiving $8 and $4 for their quota. Wooten and his associate Peter Daniel point out that the legislators who seemed to offer such payments a couple of years ago likely had no intention of paying out that kind of money for every pound of tobacco quota.
"Before they made any comments about buying up the quota, they determined that 90 percent of the quota owners could receive 100 percent of the value of their quota with an $80,000 per owner cap in payments," Daniel says. "Under their plan, a large farmer with half a million pounds of quota, who was expecting a total payment of $4 million, would receive a maximum of $80,000. A 100-acre grower with 200,000 pounds of quota, expecting $160,000 would receive only $80,000. The big payments were never going to happen."
That's important to know when growers begin to negotiate with legislators.
On a bright note, Wooten points out that Stabilization will have access to $81 million of disaster relief funds, as a result of last year's hurricanes and floods. That money can be used to reduce the cost of tobacco currently in Stabilization's warehouses. Moving that tobacco into the trade, at a significantly reduced price per pound, reduces the threat of another severe quota cut in 2001.
It's good that the North Carolina Farm Bureau is willing to clearly state their position on these critical tobacco policy issues. With sincere and non-partisan input from other tobacco leaders and legislators, the current tobacco policy quagmire can be overcome. There is still much to be done.