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Majority of Maryland Tobacco Farmers Accept Buyout from State - 2004-04-22

Tobacco has been a cash crop in the mid-Atlantic states since the 17th century, but as public attitudes toward smoking became more negative, and state governments began suing tobacco companies for cost of smoking-related diseases, some farmers began looking for less controversial crops. Mary Saner reports that in Maryland, millions of dollars from the state's tobacco lawsuit settlement are being used to take tobacco land out of production.

In St. Mary's County in southern Maryland, beautiful old tobacco barns highlight a landscape of farmhouses and open fields. Growing tobacco has been a way of life here for centuries. Ben Beale, 29, is a second-generation tobacco farmer.

"It started as a basis for our currency where we traded tobacco instead of money, actually," he said. "A lot of our heritage, a lot of our culture comes from tobacco production."

He also works for the state university's agriculture extension program, helping other farmers with crop information and research to make their fields easier to work and even more profitable.

In the late 1970s and early 1980s, when the price of tobacco was high, some large farms were making a $100,000 a year or more, about double what soybeans, corn and other crops were worth. However, over the past two decades, tobacco prices have stayed the same or dropped while expenses have risen.

So, in 2000, Maryland offered its tobacco farmers a buyout. Those who agreed not to grow tobacco on their land, but to stay in agriculture, would receive payment for the next 10 years, based on the amount of tobacco they had raised in the past. Roughly 85 percent of Maryland's tobacco farmers took the buyout. Ben Beale said there were several compelling reasons for their decision.

"It's a very labor intensive crop, it requires a lot of management, a lot of skill," he explained. "In the late [19]80's and into the [19]90's, we saw some decline in the availability of labor, so getting good quality help was harder and harder. So we were seeing a gradual decline in tobacco production. We see more global competition where they're growing tobacco in other countries and being able to import that. We're seeing a reduction in some smoking, so the demand for tobacco in general has declined."

Since the buyout, no other single crop has proven as lucrative as tobacco. Many farmers are going into other agricultural businesses or expanding what they'd been doing on a small scale. Mr. Beale said that some are planting vineyards, others are growing corn or soybeans.

"What we're finding are a lot of niche-type crops," he said. "Some people went into vegetable production, fresh market or wholesale production. Some people are going into the greenhouse industry, some people are going into the nursery industry. Other people will go into the hay industry, the beef industry."

Brian Russell owns 50 hectares between the Patuxent and Wicomico Rivers.

"Right now we're planting field corn. We raise a lot of cattle. We have about 200 beef cows," he said.

Tobacco was the family's cash crop since the late 1800s ,but Mr. Russell said that in the last 10 years the business was going downhill.

"It was just getting so the money wasn't quite as good as it had been," he recalled. "The fertilizer was cheap, your chemicals were cheap, your labor was cheap and the price was high. As the price stayed the same, everything else went up, so the line of profit just kept getting smaller and smaller and eventually it was more headache than anything else."

Mr. Russell added that he doesn't miss tobacco farming that much.

"It was such a labor intensive crop," he said. "It was seven days a week, 14 hours a day during the harvest season. And the weather played a big part. So it was kind of a big gamble, so a lot of people said 'well, the buyout is a sure thing.'"

The buyout has been most popular, though, with older farmers who are thinking about retirement. Luther Wolfe worked in tobacco for 50 years. Now almost 64, he raises corn, soybeans and wheat. "We couldn't get labor, and the offer for the buyout came, and at my age, when the buyout stops, I'll be too old to work anyway," he said.

However, Mr. Wolfe admits he is still sentimentally attached to tobacco farming.

"If I had a young boy that wanted to go into it, I might not have taken it, but my boy is doing something else," he explained.

The 150 or so St. Mary's County tobacco farmers who did not take the buyout have just sold their crop at auction. All the leaves will be exported to Europe to be made into European cigarettes. Ben Beale's family is one of the holdouts. He says tobacco is still a profitable crop here.

"Our family decided not to take the buyout," he said. "For one, there's a lot of young folks, myself, my brother and other family members involved. Also, my family doesn't necessarily believe in a lot of government intervention or government support in the form of the buyout and also, tobacco was and still is a very profitable crop for the operation."

Ben Beale and his fellow tobacco farmers are further encouraged by research going on at the University of Maryland. Scientists there are trying to find ways to use tobacco for medicinal purposes, potentially opening a whole new market for the aromatic leaf.