Lawrence County’s burley growers can expect production changes this growing season because of cross-county leasing and a 45 percent cut in farm quotas.

Thursday, February 03, 2000

Lawrence County’s burley growers can expect production changes this growing season because of cross-county leasing and a 45 percent cut in farm quotas.

The U.S. Department of Agriculture announced Tuesday that the national marketing quota for the 2000 tobacco crop is 247.4 million pounds, down from the 1999 quota of 452.9 million pounds.

For each farm, the basic quota will decrease about 45.3 percent from 1999 levels.

"In other words, each farmer can see that much less for his crop," Gallia-Lawrence Farm Service Agency director Jim Herrell said, adding that last year’s quota reduction was only 18 percent.

"We’re talking about a good size chunk this year," Herrell said. "The lack of demand did cut our quotas."

In Lawrence County, a drastic quota reduction means the lease price per pound will increase because there is less acreage to lease, Herrell said.

Those who lease will receive more for their lease but again there will be less to lease, he said.

"Anyone standing on the street, if they’re working at a public job and take a 45 to 50 percent cut in pay, it will affect them."

Also this year, Ohio’s burley growers will face cross-county leasing, which can affect tobacco prices and farm incomes, Herrell said.

Growers voted last month to allow tobacco quotas to be transferred or leased across county lines. The vote was 69 percent in favor of the option, he said.

In Lawrence County, there were 137 growers or quota holders out of 248 total voters who voted in favor of the federal plan, Herrell said.

Also, nearly six in 10 Kentucky burley growers voted in favor of the same measure last month, FSA officials said.

Congress gave Agriculture Secretary Dan Glickman authority to permit farm-to-farm transfer or lease of quota, pending approval in the statewide referendums.

"It will definitely affect the amount of acres planted in Lawrence County," Herrell said, adding that Lawrence leases tobacco for less than neighboring counties.

Cross-county leasing is good and bad, depending on which side of the fence a landowner stands, he said.

For example, cross-county leasing will negatively impact those who plant and lease from other quota holders because competition will drive increased prices, Herrell said.

Cross-county leasing will positively impact those who lease their tobacco base because there will be more competition among farmers who want to buy, he said.

"It’s supply and demand, and it depends on who you talk to whether they like it or dislike it."

Newly-elected Lawrence County Farm Bureau president Matt Capper called the cross-county leasing plan a double-edged sword.

"Some are worried that bigger farmers will come in and start leasing the small farmers right out of business," Capper said.

"Others without much tobacco base like it because they can make more money," he said.

Farm Bureau took a neutral stand during the growers’ vote on the plan, Capper said.

Secretary Glickman’s decision to allow states the choice to enact cross-county leasing came in part because the government had been discussing this year’s 45 percent quota reduction.

But to the government, the only way to justify a drastic reduction is to make sure that every pound of tobacco in the Burley belt is grown and used, Herrell said.

For example, Lawrence County traditionally has not used all its quota, so allowing cross-county leasing will ensure that what’s left after the reduction gets grown, he said.

Still, quota reductions can hurt tobacco farms, especially the small-scale ones, Herrell said.

Those who lease will probably get twice as much money as last year, but the person who grows will see 45 percent less of his own quota and will have to pay more to lease the extra, he said.

"So the actual producer gets hurt both ways."

Farm advocates hope there will be state and federal relief for tobacco farmers, but nothing is on the horizon yet, Herrell said.

"We’re getting the word out so maybe there will be a little more sympathy for the tobacco farmer," he said. "We need support by non-agriculture people."

The burley tobacco no-net-cost assessment will be 6 cents on each pound of 2000-crop burley tobacco that is marketed. The USDA set the no-net-cost assessments at 3 cents per pound for the producer and 3 cents per pound for the purchaser for crop year 2000.

The price support level for the 2000 crop is $1.805 per pound, up 1.6 cents per pound from last year, the USDA said.