Quota cuts and declining markets have made growing tobacco as uncertain as a roulette wheel. Growers are hoping, however, that their number comes up later this year in the form of a quota buyout.
“Uncertainty,” says Larry Riggs, from his kitchen table, while the rain pounds the roof of his home in Maysville, N.C. “There's no certainty in it. It's just a year-to-year thing.”
Like other flue-cured growers, Riggs has lived through the uncertain times of a crop he used to be able to count on financially. Through retrofitting of curing barns; through quota cuts; through contracting; and now through another quota cut, he's compensated for the uncertainty by growing other crops and trucking. He'd like to say he made it through to a quota buyout. The Onslow County, N.C., producer unabashedly points you to the practices that put him at the top of tobacco producers in the state. In a post-buyout tobacco world, he would be one of the ones who remain — however, he even sees uncertainty in that statement.
He was brought up on the farm and he's stayed on the farm for 30 years. He and his wife, Freda, of 25 years have built a successful operation from the ground up with hard work amid a tobacco landscape as shaky as a walkway through a swamp.
“It looks like they're going to keep on cutting quota and put us out of business,” Riggs says.
Things were looking up in 1994 when he began purchasing tobacco quota. Over a three-year period, he bought 275,000 pounds of quota, financing it over 10 years.
“I went back and wrote this down,” Riggs says, removing his reading glasses from the pocket of his jacket, and then recounting the percentage cuts in quota levels from 1998.
In 1998: A 16.5 percent cut; in 1999, an 18 percent cut; in 2000, an 18.5 percent cut; in 2001, a 1.5 percent increase; in 2002, a 6 percent increase; and in 2003, a 9.5 percent cut.
“Over a six-year period, that's a 55 percent cut,” Riggs says. “That bites and it bit me pretty good.”
On a personal level, Riggs is now paying for 275,000 pounds of quota, while owning 125,000 pounds. Phase II payments have helped.
“We started this operation from the bottom,” Riggs says. “But we have some wonderful help and support from both sets of our parents, Franklin Riggs, Belle Riggs, and Kenneth Bell and Amy Bell.”
He'll raise 175 acres of flue-cured tobacco this year amid the uncertainty. “The biggest thing is that I'm set up for 250 acres equipment-wise. The biggest loss has come from buying tobacco land and pounds.”
While pointing out that tobacco exports are down, the 55 percent cut is “still being raised. We can't compete with foreign markets. They can raise the quality and the flavor.”
“I'm 100 percent for the buyout,” Riggs says. “They've taken away 55 percent of the quota from us. What's to say they won't take away the rest of it?
“For quota owners and growers, a buyout is the only thing that will keep us from losing everything,” Riggs believes. “It will give us dignity.
“Some people say quota was given to people, but I haven't had any given to me,” he says.
He supports the idea that both growers and quota owners be compensated for the value of the quota. Above all else, a quota buyout should give growers the dignity they deserve — an opportunity to exit if they want, the chance to continue to produce tobacco if they choose. After a buyout, however, he's uncertain about whether he'll grow tobacco. He sees foreign markets increasing in importance after a buyout, a huge reason for the decline in quota.
In the meantime, he continues to grow quality tobacco. The phrase almost seems like a cliché, except at a time when contracts dictate certain qualities and characteristics.
“I'm just lucky I have a contract,” Riggs says. He contracts with Dimon International. “I've been tickled with the whole contracting situation. It's a whole lot better than the auction market.”
While the quota cuts were taking place over the past six years, he and other tobacco growers have had to retrofit their barns, and convert to using balers.
Riggs replaced worn-out rack barns with bulk barns when manufacturers required a change to reduce nitrasamine levels in tobacco.
Tobacco remains a labor-intensive operation, despite the advances in harvesting and curing technology. Delivery of specific qualities of tobacco, as mandated in marketing contracts, requires a hands-on approach. He now harvests four times.
Labor now costs Riggs about $7.75 per hour. It's an intensive process to produce “clean” tobacco. Riggs requires workers to button up shirt pockets and remove papers out of the pockets of their pants before they put tobacco into the baler.
It costs about $1.25 per pound to raise a pound of tobacco. “There's no profit in tobacco anymore,” Riggs says. Of the tobacco he grows, Riggs owns about 55 acres.