To Allow Farmers to Keep Farming and to Sustain Rural Communities
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The | Vol. 1.1 November 1997 |
| Tobacco Communities Project To Allow Farmers to Keep Farming and to Sustain Rural Communities |
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WELCOME TO THE tobacco COMMUNITIES PROJECT The Rural Advancement Foundation International, with support from private donors, church, and foundation sources, has begun the Tobacco Communities Project to support tobacco farmers and rural communities in North Carolina. This project, a four year effort operating in Columbus, Edgecombe, Harnett, Johnston, Pitt, Wake, and Wayne counties, is looking for innovative tobacco farmers who are interested in becoming a part of a team working to supplement tobacco income and sustain their communities. This project is based on the idea that farmers are the driving force of agricultural innovation. As American agriculture looks toward the twenty-first century, tobacco farmers face unprecedented pressures. Budget cuts in the extension service, threats to commodity programs, and changes in tobacco markets all strain the ability of farmers to stay in business. We believe that the innovation necessary to face these challenges can be found on the farm, in farming communities. The Tobacco Communities Project features a team approach to agricultural problem solving by bringing together farmers, extension personnel, church members, agricultural scientists, and other members of the farm community as equal members of a response team. By combining these strengths, we believe that problems can be solved more creatively than by any of the individuals alone. What we are offering:
tobacco COMMUNITY REINVESTMENT FUND As adjustments in the industry are being made, farmers are being encouraged to reduce dependency on tobacco. RAFI-USA is setting up a pilot Reinvestment Fund to help farmers develop enterprises that can supplement tobacco income. The pilot Reinvestment Fund will be used to cost-share on-farm and community research and development for new and expanded enterprises. Support for the pilot project comes from RAFI donors, church, and foundation sources. The Reinvestment Fund will support farmer and community efforts in trying new enterprises. 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. Funds could also be used as partial support for new marketing, handling, or processing operations. Farmers and communities who get cost-share grants will agree to host farm tours, hold demonstrations, and share what they are learning with others. Funds will be made available to individual farmers as producer grants and to groups of farmers, community organizations, or agricultural associations as community grants. A Reinvestment Fund Board has been appointed. Half of the members are farmers with experience in tobacco and diversification. Other members are agricultural advisors, lenders, church, health, non-profit, and other community leaders. RAFI's aim is to keep the project decision making "close to the ground". Farmers who serve on the board are not eligible for grants. The board is in the process of developing the final criteria for applications and grants. The first pilot counties are Wayne and Johnston; only growers from these two counties will be eligible for grants this year. A call for proposals will be sent out in November and the first grants will be made in January 1998.
THE GLOBAL SETTLEMENT The Federal Government has operated a program to stabilize burley and flue-cured tobacco production and prices since the 1930's. This program, which coordinated the changing demand of cigarette consumers and manufacturers with technological change affecting growers, used farmers' cooperatives to lessen risks and to allow a stable income for growers, quota owners, input suppliers, bankers, and others within farm communities. The June 1997 "Global Settlement" among the four major tobacco companies and the state Attorneys General threatens to end the sixty years of relative stability that the tobacco program has brought. Though this agreement still must be approved by Congress, it reflects the broad changes that are sweeping across the tobacco community and the uncertainty which growers must face in 1997. The settlement includes $368 billion in payments from the tobacco companies spaced over a period of 25 years for public health measures. There are also measures to restrict tobacco advertising, Food and Drug Administration regulation of nicotine, and tobacco company liability. A missing piece in this "Global Settlement" was any consideration of those whose life would be most affected by it: tobacco growers and rural communities. Farm organizations have been left to predict the results of this settlement and to demand that consideration of their concerns be included. If Congress approves the settlement, it could have a dramatic effect on the sale of tobacco products. Tobacco companies may raise the cost of a pack of cigarettes from $.75-$1.50 because of the penalties they will have to pay. There are also possibilities that the tobacco companies could increase usage of more inexpensive foreign tobacco. Anti-smoking campaigns and advertising restrictions would reduce the amount of tobacco products sold in the U.S. Congress is currently debating options surrounding the tobacco program and settlement. Issues of the future of the tobacco program, buyout of quota, stability of future price and production, and economic development in tobacco communities will likely be decided at the Federal level over the next year. These political and economic shifts are a reflection of broader changes. Only 2% of the U.S. population now lives on farms. The future of tobacco farmers seems no longer to be an important concern to the increasingly urban population. Unless farmers and their communities can voice their perspective effectively, changes in the landscape may be primarily unsettling in their impact.
tobacco FARMER SURVEY: WHAT YOU'VE SAID In the winter of 1997, the Tobacco Communities Project conducted a telephone survey of 1236 North Carolina tobacco growers. This survey asked farmers about their family, production, and attitudes about the future of the tobacco industry and policy options. A number of the questions focused on supplemental activities which could reduce dependence on tobacco income. The survey results have helped to identify the barriers that farmers face in developing new sources of income on the farm. RAFI has drawn on this information in determining the focus of the project and the design of the Reinvestment Fund. One interesting result of the survey is that North Carolina tobacco growers are already extremely diverse. 95% raise other crops besides tobacco, and 50% know other tobacco farmers in the county who have tried new agricultural activities that were profitable in the past year. However, relatively few farmers have found ways to process or market their crops in ways that increase profitability. While 79% of tobacco farmers grow soybeans, only 22% have found unique ways to add value to the commodity. Of the 63% of farmers that grow corn, only 20% are adding value to the crop once it leaves the field. There is great concern about the future of the tobacco program. 71% of farmers surveyed said that eliminating the tobacco program would pose a great risk to tobacco farmers and their communities. With current discussions in the U.S. Congress considering the possibility of eliminating the tobacco program, there is great interest in developing other supplemental activities. Over half of farmers responding stated that they are interested in developing supplemental on-farm activities, and a majority had done something in the past year to explore a new enterprise. Farmers identified the following as the leading barriers to developing supplemental Activities:
The Tobacco Communities Project established the Reinvestment Fund to assist growers in overcoming several of these barriers. Since profitable alternatives must first be developed by farmers, the fund provides cost-share funds to assist farmers in reducing the risk of exploring a new idea, either in the area of marketing, processing, or specialized equipment purchase. It is hoped that farmers can utilize these funds to leverage additional money from traditional lending institutions. Later issues of this newsletter will report additional results of the farmer survey.
Turning Wheat into Gold North Dakota agriculture and its rural economy are very dependent on the economic health of small grain producers. Since the mid -1980's and especially since the passage of the 1995 Farm Bill, North Dakota farmers have been facing transition in the way their market is structured. Small grain farmers in North Dakota caught in the escalating "price / cost" squeeze and facing the seven-year phase out of government support programs are organizing to take back control of their commodity. One such group in Leeds developed a proposal for adding value to their crop which was supported by the North Dakota Agricultural Products Utilization Commission's grant Fund. This competitive grant Fund aims to "create new wealth and jobs through the development of new and expanded uses of North Dakota agricultural products." The Leeds farmers' successful proposal turned into the Farmers Choice Pasta Company in 1996. This is a shares-based company with 328 farmer investors. The company expects to employ over 100 people and make quick frozen pasta products for retail consumers. This is an example of farmers facing a critical transition in their agricultural economy and developing a winning market-based solution. They have been able to go from selling a raw agricultural commodity at farmgate prices to setting their own prices and capturing the entire value of their product all the way to the retailer.
CHURCHES AND THE tobacco COMMUNITIES PROJECT In North Carolina's rural communities, churches and tobacco go together like the state and its relationship with college basketball - they are inseparable. The brick, mortar, and wood of church sanctuaries and social halls symbolize one of the best examples of rural economic prosperity in tobacco communities. And in "the country," the church is at the center and soul of the way of life. That is why, from the beginning of the Tobacco Communities Project, RAFI-USA has felt the active participation of church members, leaders, and professionals to be critical to the Project's success. That belief has been supported by a grant from the Duke Endowment to provide funding for work designed to build links between churches and the Project's staff, leaders, and participating farmers. As the consultant to churches for the Tobacco Communities Project, I want to identify, encourage, and support congregations and clergy interested in involvement with the Project's goals identified elsewhere in the newsletter. I am available to talk one-on-one, with informal groups, and with church organizations and committees, about the Project in particular and the overall relationship between churches and changes in your tobacco communities. I am initiating connections with as many church folks as possible; however, if you would like to contact me, please do so at the addresses or telephone numbers below. I am a native of Durham. My grandmother owned a 50-acre tobacco farm where I handed leaves as a child. Like many of Durham's children, I smelled tobacco all around me, smoked it, and went to college off of it. The majority of my home church's members worked at American or Liggett Myers. I feel privileged to be doing this work with RAFI-USA's Tobacco Communities Project. I look forward to meeting and talking with as many of you as possible. Rev. Susan Rogers Comments or Questions to:
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