Farmers continue push for new tobacco contracts

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By Stephen Lega

Tobacco farmers representing 13 counties met last week to express their displeasure with the 2008 contract offered by Philip Morris.

The meeting Jan. 16 was a follow-up to a December meeting, during which farmers said they wanted to know if tobacco growers in other areas felt the same way. The answer that came back was a definitive yes.

"We've all got the same concerns," said Forrest Stevens, a farmer from Anderson County who sells his tobacco in Lebanon.

Stevens, Bernie Cave of Taylor County and Joe Spalding of Marion County were elected to represent farmers who sell their tobacco at the Lebanon receiving station. Their primary goal remains the same as it was last month: to meet with Philip Morris officials about the proposed contract.

Cave and Spalding worked to organize the first meeting in December. Since then, farmers at the Elizabethtown receiving station elected two representatives of their own, and farmers at the London receiving station were scheduled to meet Jan. 21.

Jack DeBord of Somerset attended the meeting in Lebanon last week, and he said that the prices in the 2008 contract are the primary issue.

"We can't see how they figure our input costs into their prices," he said.

The Philip Morris contract has changed from 2007 to 2008, but Cave said it didn't mean there was any change in the bottom line for tobacco growers (see chart).

"There's more than just growing tobacco involved in what we're trying to do," he said. "We're trying to provide for our families."

State Rep. Jimmy Higdon, who represents Casey, Marion and part of Pulaski counties, was asked by one farmer what he could do to help them.

Higdon said he'd been asking himself that same question. He said he would speak with Rep. Tom McKee, chairman of the House Agriculture Committee, about passing a resolution in support of the farmers, although Higdon acknowledged it would have a limited effect.

"It doesn't have any weight," he said, "but it sends a signal from the state."

Since the buyout in 2004, the government no longer has oversight of the sale of tobacco, he said.

Higdon added that he is open to ideas. Farmers suggested trying to get legislatures in other burley states to pursue similar resolutions and possibly looking into legislation to require Philip Morris to sit down with the growers.

Dean Wallace, executive director of the Council for Burley Tobacco, also attended last week's meeting to listen and to express his support for what tobacco growers are trying to do. The council is having a board meeting in February, and Wallace invited farmers to attend that meeting as well.

Wallace added that he thinks the farmers have made a lot of progress.

"I think Philip Morris is listening," he said.

Since last month, Spalding said he received a letter from Philip Morris, and Cave said he spoke with a Philip Morris employee prior to last week's meeting. Neither said that Philip Morris was ready to sit down with tobacco growers at this point.

Philip Morris has sent a mailing to farmers regarding the 2008 contract, although several farmers indicated they had not received it as of the Jan. 16 meeting. The mailing explains how Philip Morris has responded to feedback it received in 2007.

First, farmers asked to receive the 2008 contract offer by Dec. 1. Philip Morris presented its proposal Nov. 29.

Second, it increased the base price on all tobacco by 7 cents per pound. This was done across the board for tobacco from every stalk position and quality level.

Third, Philip Morris simplified its incentive programs.

In the 2007 contract, farmers received 3 cents per pound for early delivery and 6 cents per pound if they delivered 100 percent of their contract. If farmers grew 25 percent more tobacco than called for in their contract, they were also eligible to receive another 30 cents per pound on that extra 25 percent.

In 2008, tobacco growers have been offered 2 cents per pound for being a loyal customer and another 5 cents per pound for delivering 90-100 percent of their contract. Farmers could also receive another 1 cent per pound for delivering "big bales" (500-600 pounds each) instead of the traditional bales (80-100 pounds).

David Sutton, a spokesperson for Philip Morris, said the company receives feedback constantly and in many ways - at grower meetings, receiving stations, field days and in other ways. Many of the changes in the 2008 contract were a direct response to comments from tobacco growers, he said.

"We, as a company, value our relationship with our farmers," Sutton said.

He added that many farmers have already signed contracts for 2008, and the company is pleased with the response it has received.

"We think it is a very, very positive contract," Sutton said.

Sutton noted that the contract includes a $1.2 million cost share program. Through this program, farmers who contracted with Philip Morris in 2007 and do so again in 2008 are eligible to apply for reimbursement for some of their equipment costs, he said.

"When you look at it holistically, this [contract] has a lot of positive changes to support what our growers are doing," Sutton said.

The contract is the main concern for local farmers, but it isn't the only one.

They would like more information about tobacco sales and about how tobacco is graded, and they stated concerns about having one person grade the tobacco.

And then there's the unsold tobacco from the 2007 crop.

Spalding, who helped organize the December meeting, said he was pleased with the turnout last week. Another meeting is planned for 7 p.m. Thursday, Feb. 7 at the Marion County Fairgrounds Floral Hall.

"People haven't lost any enthusiasm," Spalding said.

- Stephen Lega is news editor at The Lebanon Enterprise.