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Tobacco warehouses dotted the landscape around Springfield’s public square, symbols of the big business that tobacco was.
Today, the metal arch is gone. With auctions a thing of the past, most of the old warehouses have been boarded up or converted into other businesses. Robertson County, like other counties in Tennessee, is experiencing a decline in the production of tobacco, a crop that once fueled the economies of farming communities across the state.
Tennessee may soon drop out of the club of the biggest tobacco producers altogether, state Agriculture Commissioner Ken Givens said. The end of federal price supports for tobacco farmers and the demise of Tennessee’s smaller-scale family farms are part of the story. . . .
According to a recently released USDA report, 750 fewer acres of tobacco will be planted in the Volunteer State this year than were set out last year. If the forecast is correct, 2007 will mark the eighth straight year that tobacco planting has fallen in Tennessee.
The state’s downward turn goes against the national trend — prices crashed in 2005, driving many away from the crop, but tobacco farmers across the country planted more acres in 2006 than they did in 2005, and are expected to plant more this year than last.
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A federal judge in Abingdon has dismissed a lawsuit by two southwest Virginia farmers that accused the U.S. Department of Agriculture of illegally slashing the growers' tobacco-buyout payments.
U.S. District Judge Samuel G. Wilson wrote Thursday that the two burley-tobacco growers lacked standing to bring the suit because they had entered into contracts with the Agriculture Department. Even if they had standing, Wilson said, they would not be entitled to relief.
William J. Neese and Daniel M. Johnson contended in their lawsuit, filed in September 2005, that Agriculture Secretary Mike Johanns overstepped his authority by deviating from a formula set by Congress that allocates payments under the $10 billion buyout of tobacco quotas.
The farmers said the agency replaced a simple calculation approved by Congress with a complex formula that cuts payments to many farmers. . . .
Philip Morris USA had intervened in the case, filing a motion to dismiss it for lack of jurisdiction.
Leaf Production Rebounds
During the second season since the termination of the program, U.S. tobacco production recovered, gaining nearly 100 million pounds. From a low point of 647.3 million pounds in 2005, production for 2006 is projected at 743.1 million as of September 1.
Tobacco Production in 2005 Plummets
As of October 1, 2005, total tobacco acreage for the 2005 marketing year was estimated to have slipped 27 percent from 2004 to 307,010 acres, about 100,000 acres below last season. Yields slipped 72 pounds per acre overall, reaching 2,083 pounds per acre for all types of tobacco, compared with 2,155 in 2004. Overall, weather conditions were excellent, although some flue- cured areas experienced heavy early rains, while burley areas were dry. Production of all types is estimated at 639.6 million pounds, about 239.7 million pounds below last season.
Based on October 1 estimates, 91 percent of U.S. leaf were types used for cigarettes, 2-percent below last season. Cigar leaf, also used for other products such as chewing and smoking tobacco, accounted for 1 percent of production. Other types, mostly dark air- and fire-cured leaf, accounted for 8 percent of production.
There will be no marketing quota or price support for 2005 and subsequent crops of tobacco
Tobacco Yearbook, 12.16.05 [ Summary |
Tobacco, TBS-259-01, 09.30.05 [PDF ] (Special Report: "U.S. Tobacco Import Update 2003/04")
The U.S. Department of Agriculture is denying the allegations of two Virginia farmers who sued the agency over the disbursement of money from a $10 billion buyout of the federal tobacco-quota system.
The farmers of burley tobacco in Southwest Virginia filed the lawsuit in September, claiming that U.S. Secretary of Agriculture Mike Johanns overstepped his authority by deviating from a formula set by Congress to determine payments to farmers.
In a response filed in U.S. District Court in Abingdon, the department denies that Johanns overstepped his authority. The agency also denies other claims in the lawsuit, including estimates of the amount of money the farmers believe they were supposed to receive.
A lawyer and a spokesman for the Department of Justice, which is defending the USDA, declined to comment yesterday.
U.S. tobacco production for the 2005 season was forecast at 644.3 million pounds as of September 1. After the passage of buyout legislation which terminated the tobacco program beginning with the 2005 crop, many growers have ceased tobacco farming or reduced acreage, waiting to gauge the market in the coming years. The crop is expected to be 27 percent below last year’s 879.2 million pounds. Acreage in 2005 is projected at 307,010 acres, 25 percent less than the 2004 season. Cigarette leaf production is expected to account for 91 percent of U.S. output in 2005 or 584.4 million pounds, compared with 816.8 million pounds during the 2004 season. Cigar types accounted for 1 percent, while dark-fired and air-cured leaf accounted for 8 percent.
Two Virginia tobacco growers have filed a lawsuit challenging the U.S. Department of Agriculture's method for determining payments to farmers from the $10 billion national tobacco-quota buyout.
The suit, filed in U.S. District Court in Abingdon, claims U.S. Agriculture Secretary Mike Johanns exceeded his authority by deviating from the formula Congress approved to calculate payments to farmers.
As a result of the changes, Washington County burley-tobacco growers William J. Neese and Daniel M. Johnson say they will lose hundreds of thousands of dollars.
A lawyer for the farmers, Daniel Caldwell of the Penn, Stuart and Eskridge law firm in Abingdon, said Congress established clear rules for calculating buyout payments. But he said Johanns instead applied a "convoluted formula" that has the effect of benefiting tobacco companies, who are financing the buyout.
A federal lawsuit filed by two Washington County, Va., farmers says the U.S. secretary of Agriculture deviated from the original formula derived for the federal tobacco buyout plan.
Court documents state that William J. Neese and Daniel M. Johnson brought suit against the USDA and Secretary Mike Johanns seeking a declaratory judgment against the agency because of unconstitutional regulations submitted by Johanns when the buyout was included in the American Jobs Creation Act.
The law signed by President George W. Bush in October 2004 calls for $9.6 billion to be paid to burley tobacco producers over a 10-year period.
The law dissolved a quota and price support system developed by the government for burley farmers in the late 1930s which effectively acted as a government license that regulated the amount of tobacco a producer could grow each year.
Neese and Johnson charge that Johanns used a "convoluted formula" that included a number of terms and figures that were contrary to the formula originally drafted leading up to the law being signed.
On March 1, 2005, tobacco growers indicated intentions to harvest 319,860 acres during the upcoming 2005 season, the lowest since the 1800s, and 22 percent less than was harvested in 2004, the last season for marketing quotas and price supports. Assuming average yields, production is expected to be around 683 million pounds, as much as 200 million pounds below 2004.
Tobacco leaf production in 2004 is estimated at 883.2 million pounds, 10 percent higher than in 2003. Marketings of flue-cured totaled 499.3 million pounds and burley reached 298.8 million pounds. Marketings of other types are estimated at about 68 million pounds. With beginning stocks of 1.5 billion pounds, total estimated supply for 2004 will be about 2.4 billion pounds, 33 million pounds less than 2003. Supply in 2003 was 2.4 billion pounds.
The U.S. Department of Agriculture announced yesterday that it will sell more than 100 million pounds of surplus tobacco, which means that tobacco growers are likely to grow that much less, an economist said.
"It won't have a huge effect on price - there's such a huge amount on the market anyway," said Blake Brown, an agricultural economist at N.C. State University.
"But it won't help," he said. "This basically displaces tobacco that farmers or other countries could produce."
The federal buyout of tobacco quotas that Congress approved last October said that the USDA could decide how to dispose of surplus leaf that the Commodity Credit Corp. had taken under loan as part of the federal price-support program that the buyout ended.
Farmers lobbied for the government to destroy the stored leaf rather than dump it onto the market.
The Agriculture Department made several missteps in awarding a contract to a company that was supposed to dispose of 121,000 tons of poor-quality tobacco but never got the job done, according to a government audit released Tuesday.
The USDA Farm Service Agency awarded a contract last year to Nicholasville, Ky.-based Biomass Energy LLC to burn the tobacco and turn it into electricity.
However, the government ultimately canceled the contract after Ohio officials ruled that Biomass didn't have the proper permits to store and burn tobacco at a facility in that state, according to the report by the USDA inspector general's office. . .
The Farm Service Agency did not respond to a request for comment Tuesday. In written comments attached to the report, the agency stated that sufficient information had been obtained to determine the contractor was responsible. . . .
USDA Inspector General's report: http://www.usda.gov/oig/webdocs/03099-03-HQ.pdf
The U.S. Department of Agriculture announced Friday that the burley tobacco quota will increase nearly 5 percent this year.
Farmers will be allowed to market 301.1 million pounds, up from 287.8 million pounds last year.
The news was expected since the USDA's Farm Service Agency recently announced the top cigarette manufacturers plan to buy about 5 percent more burley tobacco this year than last.
Tobacco company purchasing intentions are a key part of the formula government officials use to set the annual quota. The USDA also considers trends in exports of U.S. leaf and how much tobacco is unsold from previous years.
Flue-cured tobacco farmers have overwhelmingly endorsed keeping a government-supported safety net for their crop, even as they lobby Congress for a multibillion-dollar buyout of tobacco quotas.
Farmers in Virginia and other tobacco-growing states recently held a referendum on whether to keep the federal tobacco-quota program for three more years. . . .
Preliminary results tabulated by the USDA's Farm Service Agency show that 93 percent of the 6,244 tobacco producers who cast ballots in this month's referendum voted to keep the program. . . .
The Virginia Tobacco Settlement Foundation is planning to give out almost $4.3 million in grants this year to civic groups, schools and other organizations in Virginia for youth-smoking prevention programs.
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