Tobacco Farmers Lose Longtime Safety Net The last tobacco subsidy payments go to tobacco farmers at the end of this month. The government program was intended to help growers transition out of a Depression-era tobacco-price-fixing system.
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Tobacco Farmers Lose Longtime Safety Net

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Tobacco Farmers Lose Longtime Safety Net

Tobacco Farmers Lose Longtime Safety Net

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STEVE INSKEEP, HOST:

Tobacco growers are about to enter the free market. This month they receive their last checks from a government program. It's designed to ease them out of tobacco price fixing, a system that's been around since the Great Depression of the 1930s. Here's Emily McCord of NPR member station WFDD in Winston-Salem, North Carolina.

EMILY MCCORD, BYLINE: It's harvest season in what's called the Old Belt of tobacco country. The crew on Stanley Smith's farm separates the hearty leaves from their stocks by the armful, collecting them and dumping them onto a flatbed hitched to a larger tractor.

STANLEY SMITH: I've farmed all my life. You're here on our family farm.

MCCORD: Smith grows about 60 acres of tobacco. It's in his veins. He's even worked as a tobacco auctioneer for 17 years and proudly shows off his craft.

SMITH: Ninety-five and I say 95, ba da bum, bum, bum, 95 put a bid now, R.J. Reynolds.

MCCORD: He's had to rely on that skill lately, working more hours on the side doing estate auctions. It's been harder to make ends meet on the farm. And now with no more money coming from the tobacco buyout program, he's feeling a little unsettled.

SMITH: I think probably the best way to sum it up is our safety net now is gone.

MCCORD: The safety net is the Transitional Tobacco Payment Program, also known as the buyout. But let's back up here for a moment. Since the 1930s, the government regulated the tobacco market with a quota system. It limited how much a farmer could grow in order to control supply and demand, and farmers profited. That ended in 2004 with a $9.6 billion buyout program that paid growers yearly sums to help them adapt to the free market.

TIM HAMBRICK: Twenty-five, 30, 40 ago, tobacco was clearly - it was clearly the most profitable thing you could do on the farm.

MCCORD: Tim Hambrick is with the area agricultural extension office. He says back then, farmers could get $1,000 an acre. Now it's more like $200, so they have to grow more tobacco to make the same money. Farms get bigger or they get squeezed out, and everyone is trying new things.

HAMBRICK: You see guys invest heavier into the grain markets. You see guys put up chicken houses. You see guys retire and just get out of the business. They look for other things to do. They encourage their kids to look for other things to do.

MCCORD: But tobacco is still big business. The U.S. tobacco crop has been steadily bringing in about $1.5 billion a year and may even grow, given the global nature of the market. Blake Brown is an agricultural economist at North Carolina State University. He says even though Americans are smoking less, overseas markets are promising, and there's still demand for that highly prized North Carolina leaf.

BLAKE BROWN: So I think for the next five years, demand for U.S. tobacco, you know, it may be stable to - it could actually increase a little bit because of the export demand. But, you know, we don't know exactly whether the growth in China will offset the decline in the U.S. and Europe.

MCCORD: And another unknown - how will the growth of e-cigarettes affect the demand for tobacco leaf? It's the growers at larger farms that have a little more breathing room. Marvin Eaton has 200 acres of tobacco, along with grain and strawberries. He has a contract with Philip Morris and R.J. Reynolds. And right now, that's paying Marvin Eaton's bills.

MARVIN EATON: If the companies - they're in control. And if they don't want Marvin Eaton raising tobacco, then I can't make it. I'm living on what they say they're going to pay me for it, then, I, Marvin Eaton, needs to get something else he enjoys doing.

MCCORD: For now, Eaton's hopeful. He points to his son who's finished college and is back home to help his dad and learn the family business. Buck Eaton stands watch over a giant conveyor belt that's sorting tobacco leaves. Someday, this farm will be his. For NPR News, I'm Emily McCord.

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