An agri-business with grave ills goes on the critical list
by Barry Henderson
East Tennessee's burley tobacco production faces a drastic decline in 2001. So steep is the anticipated downward curve that knowledgeable tobacco experts describe it in such terms as "the brink of disaster" and "set for catastrophe."
Those hyperbolic expressions apply not only to the prospects for tobacco farmers' income losses but also to the well-being of all residents of those counties in which burley receipts form a substantial part of the total local economy.
Hugh Wells, the director of agricultural activities at Greene County Bank in Greeneville, looks at the figures for the predicted decline in tobacco revenue in his county, which leads the state in burley production, and says grimly, "It's going to be bad, bad, bad."
Greene County growers contributed about $25 million to the area economy last year and will probably meet or exceed that total this season when the tobacco auctions crank up in a week or so. But the best guess, according to such authorities as the UT Agricultural Extension Service, is that the 2001 receipts could drop by about 40 percent.
Factors that go into the dire predictions include:
* Declining domestic cigarette consumption as more Americans quit smoking for health reasons.
* Increased use of less expensive, foreign-grown burley stocks by U.S. cigarette makers as cigarette companies move manufacturing facilities out of the United States.
* Declining cigarette exports, partly because of unfavorable economic conditions in some major cigarette markets, including Asian countries and Russia.
* Extensive world-wide and domestic burley stocks in storage.
The negatives seem to go on and on and continue to worsen for the tobacco farmer and the farm economies of burley-growing areas. East Tennessee farms produce about 20 percent of domestic burley, with Eastern Kentucky bringing in a whopping 75 percent and lesser shares coming from Western North Carolina and extreme Southwestern Virginia. Burley tobacco, unlike the dark leaf grown in Middle Tennessee and many other regions of the country, makes up a small percentage of the nation's total tobacco crop. But it is the tobacco that lends American cigarettes their distinctive flavor, and it is the dominant tobacco grown in East Tennessee. Nearly every leaf cured in Greene County is burley. So the burley market is watched with great interest in Greeneville. When it is down, everyone in town feels low.
What makes bankers like Hugh Wells cringe all the more is the knowledge that nearly all of the $25 million in Greene County burley revenue, for example, stays inside the county and churns the whole economy. UT economists suggest that each of those dollars circulates up to five times, meaning the economic effect could be well over $100 million this year, perhaps slipping by nearly $50 million next year. Even a county with Greene's approximately 60,000 citizens and a fair number of industrial jobs cannot absorb a $50 million hit without reeling from it, Wells says.
Neither, of course, can individual burley growers sustain the kinds of income losses that the burley dive represents without consequences in their own households.
Divided They Fall
At 71, Wells has been personally involved in tobacco farming since childhood. His family still farms. He knows as much about the agricultural sector of the county's economy as anybody, and he keeps repeating things like, "The picture is bleak."
The burley tobacco quota system, in which land-holders have a specific number of pounds of burley production allocated to them, is in an unprecedented squeeze, Wells says. The system, which dates back to 1938 and was created by vote of burley growers, derives a quota for each participating land-holder, or quota-holder, from a complex formula representing tobacco demand and involving intended purchases by cigarette manufacturers, a three-year average of burley exports and the amount of production needed to maintain a burley stock in reserve. All of those bases are bottoming out this year, when farmers have used up their carry-over quota from past years to keep current acreage in production.
Wells says if there is not a substantial increase in burley quota allocated to farmers in the 2001 growing season, "people are going to be selling their land to pay taxes."
His is not an idle perspective. Wells has seen past crop disasters from natural causes, such as drought, cause waves of refinancing for burley growers. But this quota crunch appears to be more than just an isolated, one-year occurrence.
Wells sees a peephole, if not a window, of opportunity for burley growers if they could get together to form a solid front in selling their product.
"I'm told," Wells says, "that the conditions here in East Tennessee, climatic and so forth, exist in a narrow band encompassing small parts of three or four states where the burley is unique in all the world. It has a flavor that no other area can reproduce. And that flavor is important, indeed vital, to U.S. cigarette makers."
He says that feature of regionally produced burley could be exploited by the growers as leverage to keep their quotas up and their incomes stable, but only if they could pull together.
Wells says, however, that such a union of aims and wills would be difficult, if not impossible. "They 're too independent-minded, too individualistic" for their own good, Wells says.
Compounding the entire problem as Wells sees it is the new practice by cigarette companies of circumventing the auction procedure by contracting directly with individual growers on an annual basis at a fixed price for graded burley poundage. The companies are thus taking advantage of each grower's independent streak.
"They want to end the competition and corner the burley market without having to bid on it every year. When they get enough of a crop contracted that they don't need anymore, everyone else can go dump their burley in a lake," Wells says.
Greeneville is home to five tobacco warehouses, each with a burley auction slated every fall. As the contract percentage—now estimated at 15 to 20 percent of the total crop—grows, the warehouses will be put out of business except as they can convert to long-term storage facilities, Wells says, further eroding the local economy.
Wells is joined by Stephen Hale, the Greene County agent for UT's Agricultural Extension Service, and Phil Kunkel, agricultural economics professor for the Extension Service, in saying that agricultural alternatives for the burley farmers are severely limited by the fact that their farmland is simply unsuited to most farming pursuits.
Such ideas as truck-farming, grape-tending or the aquacultural raising of fish or freshwater shrimp might be appropriate in a few instances, but the sheer numbers of tobacco farmers—there are about 15,000 in Tennessee alone—means that there is no farm product or list of products in sufficient demand to give them all a shot at converting from tobacco, even if they had a suitable soil base, the experts believe.
Should the tobacco market fall away completely, with the average age of a tobacco farmer now at 54 and with limited employability for those beyond that average, there will be a lot of people out of work and a quarter of the state's total farm crop receipts scrubbed off the books, according to tables supplied by the UT Extension Service.
Disregarding issues of tobacco use and health, which Wells says have demoralized, demonized and intimidated many tobacco farmers, how do some burley growers themselves perceive the issue?
A Big Producer
Wayne Brown's "Braunhurst" farm lays beautifully in the low, rolling hills of Greene County south of Chuckey. Braunhurst would be a showplace wherever farmers till soil. The outbuildings are well-kept and the fields and fencing well-tended. The maple-shaded home place is a sprawling Victorian, smartly painted yellow, with gray trim and bright green roof tiles. It looks at once homey and elegant.
Brown, 53, is at ease on the front stoop, drawing deeply on a cigarette. Over his head, beside the front door, hangs an ornate sign, lettered large: "This farm has pride in tobacco."
It pretty obviously does, and so does Wayne Brown. But the ease on his face and form is crosshatched with tension lines. The glow of a perfect autumn afternoon doesn't make the shrinking tobacco market a year hence look a bit better than it did a year ago to a man who has been watching it scientifically all his adult life.
Brown took his bachelor's degree in animal science and his master's in biology. He took them home to apply on the land where he grew up. "You've got to love it," Brown says of farming in general and tobacco farming in particular. On his own land he raises some corn, some beans; he cuts some hay. But it is the 90 acres of burley tobacco there and more than 300 acres elsewhere that he owns or leases for burley production that have made his family well, in the economic sense.
"It's what put me through college and put my kids through college. It paid for this farm," Brown says. He's sitting on his grandfather's porch on a parcel of the property that's been in the family for four generations. He has built it up through purchase to 550 acres. There've been years he has farmed up to 1,600 acres through leases. "I was about to die," he says with a little laugh. He's cut back on his leasing, but the family place is fully cultivated. "There won't be a fifth generation farming it," Brown says slowly, matter-of-factly, his eyes gazing out across the fields where the golden leaf, now hanging under roof to cure, has been cut for this season.
Brown's daughter, Amy, is a marine biology graduate of the College of Charleston, and his son, Ben, is a sophomore in computer science at UT. He's obviously as proud of them as he is of anything. He thought for a while maybe his daughter, a hardworking former 4H'er with a feel for farming, might take it up. He was sure his son wouldn't. Now he's as glad of their choices as a father can be.
Once the Phillip Morris Co.'s "Tobacco Farmer of the Year," Brown sees another year for himself in tobacco, and maybe a little more under contract to the company. But the profit margin is dropping for the big as well as the little guy in tobacco farming. So despite Brown's holdings, his skills and his deep agricultural ethic, he doesn't see a future for himself or anyone else on the land of his ancestors. "I tried hogs, tried dairying. The markets fell off to nothing," he says. The risk in fruits and vegetables is too great to sustain the hope for reward, Brown believes. Their perishability and the timing required to hit the market just right make them a poor proposition when compared with the much-larger price per pound and per acre of a decent tobacco crop. "I farm because of the lifestyle, and the lifestyle is going away.... Once I quit I'm out of it. There'll be no new career," Brown says, and there's rue dripping from every word.
You don't want to ask a Wayne Brown how he'll get by if the market for burley tobacco continues to dwindle. To all appearances, Brown could walk away from tobacco and never starve. No matter how true, that does not give him solace.
A Small Producer
Jake Haun, who's raised tobacco all his life as well, has a little patch at home just north of Mosheim, another Greene County hamlet. Altogether he produces burley on 10 acres, mostly leased and "all from kin," he says. He is glum about the prospects for future burley crops. He's always worked another job, as more than 60 percent of tobacco growers do. He was assistant manager of the Greene Farmers' Co-Op until a year ago, and he does a Saturday morning radio show on Greeneville's WQRV AM station, talking about agricultural subjects. The agricultural subject at hand, he says, is that "the chickens'll be coming home to roost as far as tobacco goes next year."
Like Hugh Wells, Haun worries about the whole local economy. "Next year at this time things are going to get pretty slim around here. And we have factories along with our tobacco. Look at some of those counties up in Kentucky. They have tobacco and tobacco, and tobacco."
But as a personal matter, the agricultural options, or lack of them as he sees the farm picture, concern him most. "It (tobacco farming) is what I like best," Haun says. "It's being outside on the ground. Tobacco plants are real responsive. You get to look at what you've done and what you've accomplished and what you've been good at. It's hard work in tough conditions—it's hot when you chop it and cold when you put it down—but it gives you a good return, or it did.
"Truck crops...squash, sweetcorn... have been tried, and failed. All you can raise on two or three small farms can fill the whole demand from around here," he says. "You can work in a factory and farm, but the factory jobs we've had around here have been here 10 or 15 years and they've gone somewhere else. Raising tobacco has always provided some income off the farm every year.
"People say we've known for a long time this was coming. They say you've had 20 or 25 years to come up with something else. Well," Haun says carefully, "there's been nothing to come up with." He stops to take a breath and take a momentary look beyond the idea of tobacco farming.
Squirming slightly in a living-room chair, the 48-year-old Haun says he's thinking about marketing himself as a motivational speaker, and that he and his wife are looking into direct-sales proposals as a way to take the place of their tobacco income.
As he walks outside toward his home patch, he talks about tobacco farming as if it's already past and gone despite the pretty leaf that is air-curing in his sheds. "I'll look back on it fondly. It was hard work at times, but that doesn't hurt anybody. A lot of fine families have grown up—and grown together—in the tobacco patch..." His voice trails off as his hands caress a sheaf of tied burley that dangles, pointing its leaves downward toward the bare, cool earth at his feet.
November 9, 2000 * Vol. 10, No. 45
© 2000 Metro Pulse
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