Tobacco farmers fret over recession, proposed taxes

Nashville, N.C. — As tobacco farmers prepare their fields for this year's crop, they already worry about the one-two punch of a down economy and calls for higher cigarette taxes.

A federal cigarette tax of 62 cents per pack that went into effect this month triggered an increase in prices, and manufacturers are buying less tobacco in anticipation that sales will slump.

WATCH VIDEO
Bleak outlook for tobacco farmers

"We got an immediate 15 percent cut in what we could grow this year on contract," Nash County farmer Greg Bunn said. "It's a 15 percent pay cut really, because I would say 90 percent of my income is dependent on tobacco."

Farmers throughout Nash County are in the same position. Many already paid for supplies and even planted some greenhouse seeds based on higher expected yields.

Charlie Tyson, Nash County's extension director, said a handful of local tobacco farmers have decided not to grow a crop this year, and he fears the situation could get worse for those who plant tobacco.

Gov. Beverly Perdue's proposed budget includes a $1-per-pack increase in the state cigarette tax, and a bill to ban smoking in restaurants is working its way through the General Assembly.

"These farm families, they shoulder the burden of this tax revenue," Tyson said. "It's been an anti-stimulus effect."

Supporters of the cigarette tax increase say it could make a dent in the state's projected $3 billion budget deficit for the 2009-10 fiscal year. Bunn and other farmers say it would make their family budgets worse, however.

"We're willing to do our share, but we just feel like it's unfair to put it all on tobacco," Bunn said. "After a while, when do you kill the golden goose?"