Lost in the Weed

Lost in the Weed

We stopped subsidizing tobacco farming. The result? Tobacco farming’s on the rise.

Posted Tuesday, June 30, 2009 - 3:51pm

In fact, while many small tobacco farmers took their buyouts and got out of family farming, many sold their land to large industrial farmers who simply took their places. And plenty weren't even farming to begin with. The Washington Post story that quoted Ken Cook noted that "holders of a quota to market tobacco—which has been bought and sold for decades—live in all 50 states."

The South, after a few years of production declines adjusting to the new market dynamics, is again growing plenty of tobacco. And tobacco acreage, after declining following the buyout, has jumped up by more than 20 percent, including in some states where tobacco hasn't been farmed in 100 years, like Ohio and Illinois.

According to one story on the buyout, some farmers have stopped growing commodity crops like corn and wheat to switch to the wildly more profitable tobacco crop. "A reasonable profit for an acre of corn is about $100. For tobacco," T.J. Vaughan said in that story, "it's $1,000 to $1,500."

But isn't domestic tobacco consumption declining? Why would there be such an increase in demand? The price supports were simply making American tobacco too expensive for the marketplace. By removing them, the tobacco companies got what they wanted: cheaper domestic tobacco. The cheaper supply, of course, lowered the cost of making their product.

As tobacco costs continued to decline, thanks to the consolidation of farms and use of industrial farming techniques, the price of American tobacco became competitive on the international market. Now, nearly 60 percent of our entire domestic crop is being exported to other regions where smoking is on the rise, mostly in Africa, the Middle East, and Asia. Philip Morris USA, which, according to Joe Nocera, came to the negotiating table chastened by its past behavior of denial and obstruction, has still managed to do a solid for its corporate cousin Philip Morris International.

By introducing competition to the supply market, the two companies have simply re-created the old slavery triangle trade route. Sell cigarettes to Africans, use the profits to buy American tobacco, and manufacture cigarettes in lightly regulated countries like Romania and China. Forget exporting carbon; we're now exporting cancer.

  • Paul Smalera has written for Condé Nast Portfolio, The New York Times and The New York Observer among others. He blogs at true/slant.
Photograph of a tobacco field by Tom Brakefield/Stockbyte/Getty Creative Images.
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subsidies

Did anyone really believe that removing subsidies was going to slow down anything? I can't think of an example where subsidies truly helped. Amtrak shouldn't be subsidized nor should any farming operation. If you can't make your business work on your own then it should fail. We should also remove all tax deductions (subsidies) and lower all tax rates or use a flat tax. No one should ever have to guess how much they owe in taxes.

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