Farmers Face Fork in Tobacco Road

Hudson Reese hoists a bright-yellow Juan Canary melon and pats it, almost lovingly, as if it were one of his grandchildren.

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.

"The challenge is how to do a plan that's flexible enough to meet the different needs and economies of the tobacco-growing states," says Mr. Guillory.

In North Carolina, the Rural Advancement Foundation International has launched a pilot project in seven counties to help tobacco communities plan for the future. Churches are being enlisted to help members think through solutions. A $200,000 reinvestment fund has been established that will give loans and grants to tobacco farmers who want to diversify.

At the University of Virginia in Charlottesville, the Southern Tobacco Communities Project is pulling together stakeholders from the six top tobacco states to develop options for rural communities.

"The answer may not be evident right now," says the project's Rebecca Reeve. "But I know there has to be a solution out there. Maybe they all can't switch to strawberries, but if one or two can make it growing strawberries, then that's something. We need more thinking 'outside the box.' "

View from the farm

Ask the farmers themselves about life after tobacco, and you're likely get a long pause and a furrowed brow.

Otey Martin, who grows mainly tobacco on his 118-acre farm, says if he couldn't grow tobacco tomorrow, "I'd have to sit and think for a couple of weeks."

Allen Boyd, one of Halifax County's many African-American tobacco farmers, says there's just plain nothing else he can do to support his family. "I've been doin' this my whole life," he says, as family members and Mexican migrant workers rack tobacco leaves nearby and hang them in curing barns. "I grow wheat, too, but only as a cover crop. There's no money in wheat."

Lucy Conner, whose involvement in the family tobacco farm includes growing the plants from seeds in homemade greenhouses, is defiant about the future. "There will always be demand for tobacco," Mrs. Conner asserts, while standing on a picnic-table bench, to a group of antismoking advocates. "And don't think teens will stop smoking - it's a coming-of-age thing, like sex and alcohol."

In a way, Hudson Reese and his sons are better equipped for the future than many growers. Hudson and son Don have degrees from Virginia Tech in animal husbandry; Jay has completed some college. But among older farmers in particular, many are poorly educated, some with no schooling beyond the seventh grade.

Still, if the Reeses got out of tobacco, they'd have about $100,000 worth of useless equipment - specific only to growing tobacco - on their hands. And if they left farming altogether, they'd be giving up a way of life that is growing rare across America: up with the sun, working outside, being with family all day, home every day for lunch, with three or four generations at the table.

"I don't make a lot of money, but I work in an atmosphere I love," says Don Reese, his young son Will curled up on his lap for a midafternoon snooze.

The politics of the future

Bill Confroy has spent more than 25 years thinking about how to diversify the economy of Halifax County, first as a banker, now as head of the county's Industrial Development Authority.

It's not an easy problem. First, he says, the county needs an interstate highway. It also needs a community college. Halifax has a classic rural-South economic base -- lots of manufacturing, textiles, agriculture. Timber farming is getting big.

But as successful as the county has been in luring businesses to locate there, it continues to lose others. Craddock Terry shoe manufacturers closed last month for good. Daystrom Furniture builders is gone. Unemployment in the county sits at 13 percent. Free trade isn't too popular here.

On a recent campaign swing through the county, Democratic gubernatorial candidate Don Beyer offered a future of office parks, high-tech centers, and better schools.

"Knowledge jobs are dominating this economy and will be for the next 100 years," the lieutenant governor told residents. He proposes $40 million in state money for incentive grants and tax credits for businesses that retrain workers.

Mr. Beyer, a businessman from northern Virginia and a supporter of the national tobacco settlement, got a cool response.