RJR Slashes Tobacco Orders By Nearly 50 Percent
Posted March 15, 2004
RALEIGH, N.C. — Tobacco giant R.J. Reynolds is slicing tobacco orders by nearly 50 percent and most farmers are scrambling to find new buyers.
Tobacco farmer Keith Parish said the R.J. Reynolds decision to cut its contracts by nearly half will have a ripple effect on all farmers, even those like himself who do not contract with big tobacco companies.
"Any time any manufacturer opts not to buy as much tobacco, it's a lot worse on the growers especially because they don't have anywhere to sell," he said.
Many farmers must now either find another buyer to contract with or take their crop to auction. If they cannot sell it there, it will be dumped into reserves, which means next year's federal quota -- the amount farmers are allowed to grow -- will likely be cut.
State agriculture commissioner Britt Cobb said R.J. Reynolds gave no apparent reason for the cutbacks, but he has his own theory.
"I think it's a number of things -- the pending merger with RJR and Brown & Williamson. That may be a factor," he said.
Whatever the reason, Parrish said the decision is an unsettling sign for farmers.
"It does send a strong indication to farmers that this is how you are going to have to deal from now on out," he said.
No one from R.J. Reynolds would comment on the story. Officials said the cutback could not come at a worse time. Thousands of farmers are suing R.J. Reynolds, alleging unfair trade practices.