AGRICULTURE Tobacco farmers suffer low demand

Another problem farmers face is competition from less expensive imports.
WASHINGTON (AP) -- It was America's first export, but now the tobacco fields are disappearing, buried by lawsuits, a drop-off in smoking and competition from imports.
Farmers are planting the smallest crop since Ulysses S. Grant was president. The Agriculture Department expects it to be just 413,710 acres this year -- 3 percent lower than last year and the smallest since 1874.
From Florida to Tennessee, farmers have cut back on planting.
"It's tough times for tobacco growers," said Thomas Capehart, an economist for the department.
The lawsuits against cigarette manufacturers are just one reason growers are cutting back. Demand is another. It is falling as states and cities raise taxes on cigarettes and as businesses ban smoking, Capehart said.
Quota system
But the government quotas, aimed at protecting growers from overproduction and low demand, are now a challenge for tobacco farmers, he said.
Although subsidies help corn and soybean growers through bad prices, tobacco growers are given quotas. If prices fall below a fixed level, growers can qualify for government loans.
American manufacturers are buying less U.S. tobacco because they can get cheaper leaf from Zimbabwe, Brazil and other countries, Capehart said.
Last year, the United States imported $715 million in tobacco, up from $676 million in 2001 and $628 million in 2000.
Meanwhile, the quotas are tightening. This year, the effective quota for flue-cured tobacco is 540 million pounds, compared with the 582 million pounds allowed last year.
For burley tobacco, this year's effective quota is 320 million pounds, down from last year's 324.2 million pounds.
Finding other work
Roger Quarles, a grower in Georgetown, Ky., said farmers try to work around the quota by leasing the rights of other farmers, but it is more difficult to do that now.
"Quite frankly, there's just not enough to go around anymore," he said. "At some point, people say: 'I have to quit and go get a job in town.' That's kind of the short story on the effect of the quota."
Burley tobacco is his largest crop because he earns about $1,000 per acre for his 30 acres of it. The return on his corn and soybeans, which cover 180 acres, doesn't come close.
"I would expect to have to grow 2,000 acres of corn and soybeans to be able to make a living," Quarles said.
He hopes Congress will approve a buyout of the quotas so some growers will quit and give others a chance to increase production.
Lawmakers have been discussing legislation to end the quotas and give farmers an incentive to stop planting tobacco.
Health-care advocates endorsed the plan, but they want it wrapped in with a bill that would give the Food and Drug Administration authority to regulate tobacco.