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Federal Officials Reduce Flue-Cured Quota for 1998

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RALEIGH (AP) — The bad news for tobacco farmers is that thefederal flue-cured quota for 1998 will be sharply less than thisyear's quota.

The good news is that it could have been worse.

The U.S. Department of Agriculture on Monday reduced the federalflue-cured tobacco quota for 1998 to 807.6 million pounds, downabout 17 percent from this year's quota of 973.8 million pounds.

Despite the expected jolt to North Carolina's economy, stateofficials expressed gratitude to U.S. Agriculture Secretary DanGlickman for softening what could have been a 20 percent decrease.

``Tobacco farmers will have a tough year in 1998, ... but it issatisfying to see the secretary of agriculture place faith in ourtobacco program and work to minimize the cuts in the amount oftobacco grown,'' state Agriculture Commissioner Jim Graham said ina prepared statement.

Next year's quota is based partly on the purchase intentions ofdomestic cigarette makers, who announced earlier this month thatthey expect to buy about 454 million pounds of tobacco next year.

Agriculture officials combined that figure with a three-yearaverage of about 372 million pounds in unmanufactured exports, thensubtracted 42.4 millions pounds to compensate for this year'sunusually large amount of surplus leaf.

Glickman then used his discretion to add 23.5 million pounds tothe quota, resulting in a final figure of 807.6 million pounds.

``While we're disappointed that our tobacco farmers are going tohave a tough year through this quota reduction, I'm pleasedSecretary Glickman heard our call to use the full 3 percent of hisdiscretion to soften the blow to our growers,'' said Gov. Jim Hunt.``We are going to continue to do whatever it takes to protect ourfarmers, their families, and their livelihood.''

The quota reduction was not a surprise, given an expecteddecrease in demand because of the proposed national tobaccosettlement and large amounts of surplus leaf that remains unsold inwarehouses.

Still, officials in North Carolina, the nation's top producer offlue-cured tobacco, expressed dismay at the announcement.

``It's very disappointing to see the numbers as low as theyare,'' said Charlie Finch, administrative operations manager forthe Flue-Cured Tobacco Stabilization Corp. ``It's going to be toughfor everyone.... It's not only going to impact the farmers, but theservice industry that services these farmers.''

North Carolina agricultural officials had estimated that a 20percent reduction in the quota could cost the state's economy $200million to $300 million.

``Even though the quota's been greatly reduced, we're just veryglad the secretary used his discretionary authority to raise thequota back up,'' said William Upchurch, tobacco programadministrator for the state Department of Agriculture. ``Comparedto what we're up against, we're satisfied.''

The announcement of the quota reduction came late Mondayafternoon, and USDA officials said a breakdown of state figureswould not be available until today.

``We really didn't know what the numbers were going to be untilabout 15 minutes ago,'' Verner Grise, director of the tobacco andpeanut analysis staff for the USDA's Farm Service Agency, saidMonday evening.

Federal officials also announced Monday that the nationalacreage allotment for 1998 is 386,782 acres, down from 466,379acres this year. The national average yield goal remains unchangedat 2,088 pounds per acre.

The price support level for the 1998 crop is $1.628 per pound,up .7 cent from 1997.

By RANDALL CHASE,Associated Press WriterCopyright ©1997 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or distributed.

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