Tobacco Money for Growers in Jeopardy
Posted December 2, 1998
RALEIGH — Decreased demand for cigarettes because of the tobacco settlement will cost our state billions of dollars, according to anN.C. Stateeconomist.
And the damage to one of our state's top industries could get even worse.
The country's second largest tobacco company says it will not contribute to the $5 billion fund to compensate tobacco growers; instead,R.J. Reynoldshas its own plan. Farmers are skeptical.
The deal was supposed to help growers recover from the tobacco settlement, which will lower demand for cigarettes.
Farmers at Tobacco Day usually hear advice about how to get a better yield; at this year's annual event it was unclear how important it would be to maximize yield.
Next year's tobacco quota could be lowered anywhere from 7 to 35 percent. Higher yield may not matter much.
In addition, the aid package designed to help growers recover from the recent settlement may offer less relief than planned.
Thursday, R.J. Reynolds pledged to buy more tobacco from farmers and maintain that level for a decade, rather than contributing to the aid package.
The farmers are frustrated.
"I think RJR might be helping us by making, maybe forcing Phillip Morris to buy more, because Phillip Morris is the Big Wheel on the block. If they don't buy more, we're going to be in serious trouble, because what RJR has been buying will not carry us out of this problem," said grower Anthony Smith.
"What really tears us up is the jerking us around from year to year with great swings in the amount of quota that we have," grower Scottie Whitford says.
Whitford would like to see the quota stabilize. He says a stable quota means "we can have the right amount of equipment. We don't have to be making large investments for one year then having it cut out from underneath us the next year."
The tobacco crop makes up about 7 percent of the state's economy.