It’s been more than a decade since the 2004 tobacco buyout, but the Virginia commodity is still growing strong.
“A lot of people thought tobacco was doomed and that the industry was over, but they are shocked that’s not been the case,” said Bill Scruggs, regional marketing development representative for the Virginia Department of Agriculture and Consumer Services. In fact, some Virginia tobacco operations are flourishing.
Robert Spiers, a flue-cured tobacco grower in Dinwiddie and Sussex counties, has doubled his tobacco acreage since 2004. Jim Jennings, a flue-cured grower in Mecklenburg County, has quadrupled his acreage.
After the buyout, farmers typically did one of three things, Scruggs said. Some started producing other commodities or increased their non-tobacco crops or livestock herds. Others expanded their tobacco acreage as contract volume picked up. Some chose to retire.
“Many of those who quit growing tobacco were elderly or had no one to transition the farm to,” said Tony Banks, Virginia Farm Bureau Federation assistant director of commodity marketing.
Today, there are fewer Virginia farmers growing tobacco, but the acreage has increased. Some of that increase is driven by exports. Some is due to the fact that, without quota-system restrictions, farmers can grow as much tobacco as they can sell.
“Exports are the upside for American tobacco,” Banks remarked. “In the United States, cigarette use is on the decline, but foreign markets love U.S. tobacco.”
Jennings was growing 25 acres of tobacco in 1976. Last year he planted 230 acres. “There’s lots more incentive for growth since the buyout,” he said.
The buyout resulted from a glut of U.S. tobacco that wasn’t competitive in the world market. In 2004, the U.S. government passed the Fair and Equitable Tobacco Reform Act, which ended the federal tobacco marketing quota program and the tobacco support price program. As a result, the U.S. Department of Agriculture agreed to provide compensation to eligible tobacco quota holders and growers for the lost value of the quotas and related price supports.
“Some of our growers wanted the buyout, and some didn’t,” Banks said.
Jennings used his payments to buy more land, put money in savings and pay for his children’s college educations.
“When the buyout happened, there were concerns, but it turned out a lot better than anybody would’ve predicted,” he said.
Tobacco continues to play a significant role in Virginia’s economy, with farmers producing 50.95 million pounds in 2015. Tobacco is grown in 34 counties in the southern Piedmont and Southwest regions of Virginia. Pittsylvania County grows the most tobacco, Mecklenburg County is the second-largest tobacco county and Halifax County is third, followed by Brunswick and Lunenburg counties.
Virginia is the third-largest tobacco producing state behind North Carolina and Kentucky.
Support AFP
Share
Contributors
