New rows to hoe for tobacco farms? `No smoking' trend, cigarette snags spur a quest for alternative crops
Brown Summit, N.C.
THIS is not the best of times to be a tobacco grower in the US. Even here, in the heart of the nation's tobacco industry, there is a growing feeling that farmers need to find ``alternative crops.''
But the road to diversification isn't easy. For one thing, tobacco farmers are utterly unused to having to market crops; they're used to driving a truckload of tobacco up to the warehouse door and coming away with a check for $25,000. And the tough economic fact, from the farmer's point of view, is that there is no crop to match tobacco for profitability.
``Diversification means more ways to lose money,'' Steve Troxler says with a laugh. He is a young farmer who has cut back from 80 acres of tobacco a few years ago to 57 now.
As anyone who hasn't been rusticating on Jupiter has surely noticed, ``No smoking'' signs have sprouted up in all kinds of places. Annual per capita consumption of cigarettes among adults 18 years of age and older has fallen from 4,100 to 3,400 over the past 10 years.
Cigarette manufacturers are finding themselves the targets of product-liability suits holding them responsible for diseases allegedly contracted by smokers. And the tobacco companies themselves are diversifying into other businesses.
Down on the farm, growers find they have something in common with the steel, auto, and textile industries: They're being clobbered by imports. The strength of the dollar and low labor costs of foreign producers are causing cigarettemakers to go overseas for their supplies.
Meanwhile, the vagaries of the tobacco price-support program (see related story, next page) have given farmers the feeling that the way to take charge of their own destiny is to start growing some other crops.
``About five years ago, when my brother, who's in partnership with me, was at State,'' says Mr. Troxler, referring to North Carolina State University in Raleigh, ``I told him, `If you don't learn anything else while you're there, find us something else to get into.' ''
Relaxing on the sofa in his comfortable living room (with wood stove and videocassette recorder), he explains, ``We wanted something with minimal capital investment -- something where we could use the equipment we paid for with tobacco when tobacco was making money.''
The Troxler brothers opted for tomatoes. ``We used tobacco planters to plant the tomatoes; we could use our tractors, trucks. That meant all we needed to invest in is greenhouses and packing equipment,'' says Steve Troxler. They have also raised some cantaloupes and bedding plants.
Growing the tomatoes is the easy part; the hard part is getting them to market. ``You've got to have it sold before you plant it,'' Troxler says. Otherwise, the produce brokers have the farmer over a barrel. ``If a broker sees a ripe tomato, he knows you've got to sell it today.''
Tobacco does not have this perishability problem.
North Carolina is a relatively populous state, with a lot of small towns and cities spread across it; thus no Tarheel farmer is too far from a market. ``There are 250,000 people eating in Guilford County,'' Steve says.
But the Troxlers, like many other farmers, have found that it's hard for a single farm whose harvest season is measured in just a few weeks to get the attention of buyers for the nation's large supermarket chains.
These chains are used to dealing with growers who can provide them with produce for a number of months -- particularly huge growers in California, who have fields at a variety of latitudes up and down the state, so that as one field plays out, another farther south is ready to be picked. (Of course, a single grower could amass similarly widespread landholdings, or subcontract with local farmers, up and down the East Coast, but it's much easier to do this all within a single state.)
``You've got to knock on a lot of doors, don't you?'' Chris Ingram, the Guilford County agent, asks Steve Troxler.
``Got to beat a lot of doors down!'' he replies. He and a brother, Wayne, finally have a foot in the door at the local outlets of a couple of major grocery chains. In fact, Steve says his biggest problem right now is being ``overmarketed'' -- having too many commitments to buyers, which could cause problems if he can't keep up with all his commitments.
But what works for one farm may not be workable at the macro level. After all, how many tomatoes can the American people consume?
Over at North Carolina State University in Raleigh, people joke about how the dean of the agriculture school has the seeds for a secret ``magic crop'' locked up in his office -- a crop as uncontroversial as tomatoes but as profitable and unperishable as tobacco.
Dr. Edmund Estes, an agricultural economist at the university, looks over a newspaper article on how broccoli may be the salvation of the tobacco farmer and gets a little, shall we say, exercised. ``Yes, demand for vegetables and other horticultural crops is growing. But there's a limit to how much that demand can grow.''
In North Carolina and neighboring states there has been interest in the ``market window'' concept. The idea is to identify certain periods in an area's growing season when that area can beat the California producers to the market with certain crops, and then grow those crops timed to harvest during that ``window.''
But Dr. Estes sugggests proximity to the population centers of the Northeast is less of an advantage for states like North Carolina than is sometimes believed.
``We still can't prove we can beat California on price. Transportation isn't that big a factor, and people around here are a little careless; they say, `We don't need to bother with packing the stuff in ice'; but in California they know they aren't going to make it [to the East Coast] in one day.''
None of this should obscure the fact that North Carolina agriculture has been diversifying. Tobacco's share of total gross agricultural income fell from 56 percent in 1951 to 27 percent in 1983. Poultry, meanwhile, has surged from 9 percent to 24 percent. Swine, soybeans, forest products, fruits and vegetables, and even grains have also seen increases, almost equally dramatic although on smaller bases.
But, Dr. Estes notes, the figures are for gross agricultural income -- not profit into the individual farmer's pocket. An acre of tobacco nowadays grosses over $4,000; a farmer who has his own tobacco allotment and thus doesn't have to ``rent quota,'' as the expression goes, and who can get his family to help him harvest the crop, may be able to keep fully 75 percent of that take.
The state's poultry industry, meanwhile, is now about equal to the tobacco industry at the wholesale level -- each worth about $1 billion a year. But poultry producers, most of them under contract in a highly vertically integrated industry, see only some 6 to 9 percent of that $1 billion. ``They get some 12 to 15 cents a bird,'' says Dr. Estes. Hence the ``cash crop'' lure of tobacco-growing remains strong.