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Tobacco growers bracing for future after the buyout


By DOUG GRAVES
Ohio Correspondent

RIPLEY, Ohio — There are roughly 4,000 tobacco growers in 22 Ohio counties. Starting in October these growers, as well as those across the country, will be on their own to find profits in a highly competitive global market.
The reason? The very last buyout checks (totaling $916.5 million) go out in October to 425,000 tobacco farmers and landowners. They’re the last holdovers from a price-support system that had guaranteed minimum prices for most of the 20th century, sustaining a way of life that began 400 years in Jamestown, Va.
Marv Stanton (friends call him Ciggy) of Adams County tends to about 500 plants on his 35-acre farm annually, downsizing drastically after his own father got out of the tobacco growing business just 15 years ago. His father saw the “writing on the wall.”
“A lot of growers, even around the Ripley (Ohio) area, took the buyout money and fled, got out of the business,” Stanton said. “Things aren’t what they used to be. Now, growers will be on their own, and it’s a different and difficult playing field.”
Cigarette makers will have paid $10 billion to compensate growers for surrendering their quotas. Growers got another $5 billion from the companies as part of their 1998 settlement of state lawsuits over smoking-related health care costs.
The Tobacco Transition Payment Program (TTPP), or tobacco buyout, was designed to help tobacco quota holders and producers transition to the free market.
The Fair and Equitable Tobacco Reform Act of 2004 was signed by President George W. Bush and ended the Depression-era tobacco quota program and established the TTPP. The program provided annually transitional payments for 10 years to eligible tobacco quota holders and producers.
The payments are funded through assessments of approximately $10 billion on tobacco product manufacturers and importers.
Growers agree it is a dying industry. The number of tobacco farms in the U.S. dropped from 124,270 in 1992 to 16,234 during the last federal crop census in 2007.
Most growers have fled from this shaky occupation, but growers like Stanton know the U.S. tobacco crop is still worth about $1.5 billion, the same as it was a decade ago.
“There will still be a lot of people hanging on to hope, hope that they can still manage a profit from a dying industry,” Stanton said. “Most of us will be on our own; it will be up to us to find a market for our product.”
Tobacco in Ohio isn’t likely to go away anytime soon. Brown County leads tobacco production in the state with 3.2 million pounds of the crop on 1,840 acres.
Adams County is second with 2.4 million pounds on 1,440 acres. Rounding out the top five tobacco-producing counties are Gallia (650 acres), Clermont (430) and Highland (365).
10/2/2014