Farmers Face Fork in Tobacco Road
Left out of the $368 billion national tobacco settlement, some growers seek a share of the deal. Some are looking to new crops.
Hudson Reese hoists a bright-yellow Juan Canary melon and pats it, almost lovingly, as if it were one of his grandchildren.Skip to next paragraph
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Mr. Reese, a farmer much of his life, loves his melons - the cantaloupes, the honeydews, the succulent Santa Claus melons that last all the way to Christmas if you store them right.
To look around Reese's farm stand, a bountiful fruits-and-vegetables enterprise along Route 360 in Virginia's southern Piedmont region, you'd hardly know that the family's financial mainstay lies elsewhere. The only clue is a plaque on the wall: "This Farm Has Pride in Tobacco."
Reese Farms is a model of economic diversification. This year, half the profits will come from tobacco fields, half from produce. That's no small comfort to the Reeses - Hudson Sr., wife Pat, their two sons, and their families - who all make their living off their 155 acres.
Many tobacco farmers gave up on alternative crops, "but we've kept them as a hedge," says the elder Reese, sons Jay and Don nodding in agreement. "We kind of enjoy growing melons."
Throughout the rural South, the future of tobacco growing is in question. The immediate cause of alarm for tobacco communities is the proposed $368 billion national tobacco deal, which includes no money for tobacco farmers, who face a decline in demand for their leaf.
Under the settlement, cigarettemakers would pay the states, lawyers, and tobacco-sponsored sporting events that will lose revenue.
Tobacco-community politicians are screaming for fairness. If the final settlement ignores farmers, "you're going to have grass growing in a lot of streets and towns" across the South, says Virginia state Rep. Virgil Goode (D).
But long-term, the issue goes beyond the national tobacco deal, which may not even happen, as individual states cut separate deals with the tobacco companies.
The tobacco industry is globalizing; the big manufacturers are setting up production overseas, from farms to factories. Settlement or not, the American farmers' 60-year-old tobacco program - a quota system that limits growth of tobacco and keeps its price high and stable - is being undermined by the rise in cheaper foreign tobacco. But many farmers are counting on American tobacco's reputation for high quality to maintain a certain demand.
Still, say rural economists, it's time for American tobacco farmers to face the future. Many growers, particularly younger ones, understand that.
"But the younger farmers also see more barriers to supplementing their income with other commodities, because they've tried," says David Altman, a public health researcher at Wake Forest University in Winston-Salem, N.C., who has studied tobacco farmers' attitudes.
The answer isn't simply to switch to strawberries or broccoli. At $1,000 an acre in profit for flue-cured tobacco, nothing else comes close as a cash crop. And even though Hudson Reese has carved out a niche in his local economy growing produce, there just isn't enough demand in Virginia's Southside region for many other farmers to duplicate his model.
"The real issue is broad-based rural economic development," says Ferrel Guillory, director of the program on southern politics, media, and public life at the University of North Carolina in Chapel Hill.
That's where tobacco settlement money could come in. If just a small percentage of that money - in the range of $7 billion to $17 billion spread out over many years - were earmarked for growers, farm communities could be protected from the devastation of a collapse in the tobacco-growing business, farmers and tobacco-state politicians suggest.
But how to orient that money is a big question. Some farm advocates see the money as a way to ease the nation's Southeast from its economic dependence on tobacco. Some funds, for example, could be used to buy out farmers' quotas. Some could also be used for a reinvestment fund for farmers to use for diversification on the farm and other off-farm activities.
Other advocates, and many farmers themselves, want the tobacco companies to put aside money in a fund that would guarantee farmers a minimum price for their crop, regardless of the market rate, much the way milk and cheese products are protected.
Throughout the region, universities and nonprofit groups have begun work on redevelopment models for the South. North Carolina, the nation's top tobacco producer, has already made strides in diversification, greatly expanding its hog-farming industry, for example. Kentucky - the nation's second-largest producer - has made less progress. The typical tobacco farm there is just four or five acres. Seventeen of the 20 most tobacco-dependent counties in the South are in Kentucky.