REINVESTMENT FUND GRANTS AWARDED

Five Johnston and Wayne County farmers are the first recipients of grants from the Tobacco Communities Reinvestment Fund, a pilot cost-share fund assisting farmers to develop enterprises that can supplement tobacco income.

Royce Gray of LaGrange will be demonstrating irrigation methods for increasing yield in developing his vegetable enterprise, and Mark Massengill of Princeton will be expanding and refining his hay production and marketing program for high quality hay sales to horse owners.  Erwin Massengill of Princeton will be showing the potential of value-added grain and soybean products by marketing and storing seed.  Greg Smith of Rosewood will develop a horse boarding and training operation, and Jack Smith of Rosewood is improving the post harvest handling and direct marketing aspect of his fruit and vegetable business.

Farmers and communities who get cost-share grants have agreed to host farm tours, hold demonstrations, and share what they are learning with others.   Keep an eye on future project newsletters for an announcement of field days to demonstrate the results of these projects.

The Reinvestment Fund will continue to support farmer and community efforts in trying new enterprises in 1999, expanding to include farmers in all project counties:  Columbus, Edgecombe, Harnett, Johnston, Pitt, Wake, and Wayne.  Grants could be used to offset increased labor, equipment, or supply needs associated with start-up activity.  Money could be used to investigate the feasibility of a new project or provide partial support for new marketing, handling, or processing operations.

A call for proposals for next year's grants will be developed in June, with applications due in October.  To assure that you receive a copy of next year's grant application, please call project staff.

SETTLEMENT WATCH

On April 2, the U.S. Senate Commerce Committee approved the National Tobacco Policy and Youth Smoking Reduction Act, sponsored by Sen. John McCain (R-AZ).  The bill, modeled after the June "Global Settlement" between the tobacco companies and 40 state Attorneys General, increases the cost of a package of cigarettes beginning in 1999, rising to $1.10 per pack in 2003.  It raises the cost to tobacco companies to $506 billion over 25 years, as well as establishing additional marketing restrictions on domestic and exported cigarettes.  Unlike the "Global Settlement," this bill includes provisions for farmers, combining aspects of the LEAF act, sponsored by Sen. Wendell Ford (D-KY) and cosponsored by Senators Ford (R-NC) and Faircloth (R-NC), and Sen. Charles Robb's (R-VA) "privatization" proposal.   The bill would preserve the supply control and price support program, while allowing quota owners to sell their allotment and reimbursing owners and renters for drops in quota due to this bill.  Tobacco states would receive $8 billion for economic and agricultural development in tobacco counties.

This is not a final, completed bill.  It has only been passed by a Senate Committee.  To become a law, it must be passed by the full Senate, a similar bill must be passed by the House of  epresentatives, compromises must take place between the House and the Senate, and it must be signed by the President.  Senate Majority Leader Trent Lott (R-MS) expects the full Senate to take up this tobacco legislation in late May, after review by other Senate Committee Chairs.   Speaker of the House of Representatives Newt Gingrich (R-GA) has said that he favors a more limited bill aimed at restricting youth access to tobacco products.

KENTUCKY, NORTH CAROLINA, AND RURAL DEVELOPMENT

"I'm as busy as anyone these days," said Wake County tobacco grower Lemuel Thornton, "but we've got to take the time out to meet right now.  My future in farming depends on this outcome."  With the opportunity to learn more about the world of burley and the future of tobacco, Wake County farmers Thornton and Melvin Jones, along with  Tony Jones of Wayne County, traveled to Frankfurt, KY in March, accompanied by Tobacco Communities Project staff.   The occasion was a regional roundtable of the Southern Tobacco Communities Project of the University of Virginia.  Included in this gathering were representatives of the Flue-Cured and Burley Stabilization Cooperatives, the North Carolina Tobacco Growers Association, the Kentucky Dept. of Agriculture and Governor's offices, public health groups, and tobacco growers from North Carolina, Virginia, Tennessee, Kentucky, and Georgia.

The roundtable event focused on the Community Development portion of the proposed tobacco settlement bills in Congress.    If a bill is passed by Congress which significantly raises the cost of tobacco products, farmers will need to develop ways to replace lost income from decreased sales.  Rural development funds have the potential to ease the adjustment in tobacco dependent communities.  Some farmers express skepticism that they would ever see any of this money as investment capital for agriculture; this meeting developed a set of principles that would earmark community development funds for agricultural uses, under the control of local farmers.  Anyone interested in a copy of these principles should call project staff.

"I learned a great deal about the differences in policy interests between burley and flue-cured tobacco," commented Wake County grower Melvin Jones.  "They've got to find an answer that works for both groups."

VALUE-ADDED SUCCESSES

"There are hundreds of good ideas out there," commented Yadkin County popcorn grower and processor Cas Booe of Shallowford Farms, "I just happened to end up with popcorn."  The Tobacco Communities Project held four Value-Added forums in February to allow farmers from across the country to share their stories in unique and profitable ways of processing and marketing their crops.  By giving tobacco growers the opportunity to talk directly with farmers from other areas, these forums were an opportunity to check out field-tested, real life ideas.

"It helps to be a good talker," said LaGrange farmer Royce Gray. "When you get into marketing your product yourself, talking it up seems just about as important as doing a good job growing it."

"Getting information on how to do this was the hardest part," said Eric Allen of the Vermont Cereal Company, which makes rolled oats.  "When we began, no one in Vermont was growing oats commercially.  When I called the state Dept. of Agriculture for advice on how to grow oats, they advised me just to buy the oats from the Midwest.  As might be expected, the large cereal manufacturers weren't real helpful in how to process oats, either.  We didn't take "No" for an answer; we just kept looking.  Our first year, I grew 2 acres and drove them to Canada in the back of my  pickup.   We eventually bought used milling equipment from someone in Conover, NC. We're now growing oats and contracting with a dozen farmers around Vermont, with a processing capacity of 300,000 lbs. per year."

"Have any of you raising cattle ever been paid for the quality of your product?" asked Bayne Brown, the field representative for Laura's Lean Beef.  "Production and pasture management can carry you only so far; the next step is to find who out there wants to buy your cattle besides the stockyard."  Laura's Lean Beef, headquartered in Lexington, KY, purchases low-fat and antibiotic-free cattle from farmers around the South, marketing labeled beef directly to grocery store chains.

"I keep telling these young farmers that they've got to look long and hard at marketing," said grower Russell Corbitt of Nahunta.  "There's always going to be someone out there who can do it bigger and cheaper than you.  You've got to find a way to make yourself stand out in the crowd."

Alex Hitt and his wife Betsy have been growing organic produce for twenty years on five acres in Alamance County.  "I'm probably the smallest farmer most of you will ever meet," said Alex, "but Betsy and I make our full-time living farming, and everything is paid off.  My best piece of advice is to start with what you can handle and to avoid getting deep in debt.  That gives you room to experiment and find what works."  Alex's slide show was full of early ventures, some not too successful.  "The most important lesson we learned was to listen to our customers first.  Ask them what they want to buy, and they'll let you know."

"I wasn't really sure what would be going on when I came out tonight," said Pitt County Farm Bureau President Dan Wynne after the workshop in Greenville, "but it was a fine meeting.  It's hard to get farmers out for meetings, but these are the kinds of things they need to be thinking about."

"With changes going on in commodity programs and increasing foreign competition," explained Iowa grain and hog farmer Verlen Carlson, "we knew we were going to have to find ways to do things differently to stay in farming.  Farmers in Iowa are pretty slow to change, but we knew that the market was changing anyway, whether we liked it or not."  Value-added ideas used in their area have included a buyers cooperative for input purchases, specialty varieties of field crops, and a grower-owned meat processing facility.  Verlen's wife, Fern, has begun conducting tours on their farm, hosting bus and corporate groups for barbecues, musical events, petting zoos, and visits to restored antique farm buildings and machinery.

"We're looking for something to keep our family in farming," said Albert Johnson of Dunn, who attended the workshop with his children and and grandchildren.  "These value-added ideas could give everyone in the family a chance to become involved."

Bruce Anderson, a board member of the North Dakota Agricultural Products Utilization Commission, explained how his state's $867,000 in grants for developing new agriculturally related ideas had directly resulted in $84 million of increased economic activity in the state.  Bruce, along with 1100 North Dakota farm families, is also a grower-investor in the Dakota Growers Pasta Company, which has grown into the second largest pasta company in the U.S. in four years.  "Farmers in the U.S. get a 2% average return on their equity," he said, "while food processors get 14%.   We decided that it was time to get both.  Though we didn't have any guarantees that this would work out, I'm not sure what will happen when I put fertilizer and seed in the ground every spring, either."

"As farmers, we've focused on production, and we've become really good at improving our efficiency," remarked Fremont tobacco grower Donald Edmundson.  "We've gotten punished for that in the marketplace.  It's about time for us to look for different ways to profit from our hard work, instead of the middlemen making it all."   "I worked as a farm manager for many years on a huge conventional produce operation," said Belvidere organic vegetable and greenhouse grower Kenny Haines.  "When I decided to go into business for myself, I knew that I was going to have to do something different.  There was no way to compete with them on size and access to markets.  I saw farmers around me working longer hours on more acreage, making less money as the years went on.  When I heard what kind of prices were there for organic produce and what demand was out there, I decided that I had to figure out how to be a part of that.  Plenty of people told me I was crazy (and they may be right), but I'm still farming and lots of them got squeezed out.  But what worked for me wouldn't work for the next guy.  Every situation is a little different."

"You're on the right track here," said retired Smithfield Tar Heel Farm Credit Branch Manager Harvey Casey, after the Johnston County workshop.  "It's going to take some creativity to adjust to these changes in tobacco."

FREE HELP!  GIVE US A CALL.

Of all the tools a farmer uses, information is one of the most powerful.  Farmers, and especially tobacco growers, can always use more information to help them make good decisions on production, marketing, and finances.  Tobacco is being hit with many major changes and pressures, and good information is vital to enable farmers to make the best decisions.

There is a new--and free--resource for tobacco farmers.  It's the Tobacco Communities Project, which is serving the tobacco farming community in seven North Carolina Counties.  So far, project staff have worked mainly in Johnston, Pitt, Wake and Wayne counties.  They are also available to farmers and communities in Columbus, Edgecombe and Harnett.

James Dunn and Gerry Cohn are the two field coordinators for this project.  Their main task is to provide outreach to the tobacco farming community.  They are listening to the concerns of the people most affected by changes in the world of tobacco, and they will assist farmers in voicing these concerns.

James and Gerry are also serving as problem-solvers for farmers and others in the tobacco community.  They will research specific questions, including new activities and markets.  They will connect farmers with experts in the field, including extension service personnel and other growers around the country.

Another service they provide is accurate and up-to-date information on tobacco policy developments, including proposed settlements and pending legislation.  James and Gerry monitor the Internet for tobacco news, and they maintain  libraries of information.  They also identify and track sources farmers and tobacco communities can go to for funding and financing.

James and Gerry are both farmers, and they know how demanding farming is.  They know that as a farmer, you don't have a lot of time to spend making phone calls or going to the library.  Let James and Gerry do your legwork for you.  If they don't have the answer, they will find it for you.

They can help you with your ideas for workshops of interest to farmers and other members of your community.  They can provide speakers to talk to your church or civic group on tobacco-farming issues.  They can  give you quick, clear updates on how the Washington, D.C., tobacco discussions are going.  And they will be happy to listen--with full  attention and complete confidentiality--to any ideas you would like to bounce around.

Serving as a free resource for you and others in the tobacco farming community is the whole purpose of the Tobacco Communities Project. That's what James and Gerry do.  So please give them a call with any ideas, questions or concerns.

You can reach Gerry Cohn at 336-376-0592, and James Dunn's number is 919-266-1728.