Thursday, March 29, 2001

Tobacco leaders recommend evaluations for contracted leaf

The Associated Press

        LOUISVILLE — A group of tobacco leaders recommended that federal tobacco graders evaluate tobacco leaf sold under contract to tobacco companies, which bypasses the traditional auction system.

        The group drafted a letter to Kentucky's congressional delegation suggesting that federal law be changed to require federal grading of contracted tobacco.

        About 35 people from burley and flue-cured tobacco states were called together for the meeting by the Kentucky and North Carolina Farm Bureau Federations.

        Kentucky Farm Bureau president Sam Moore said Tuesday the meeting was attended by repre sentatives of the three cooperatives that operate the federal price-support systems in burley and flue-cured tobaccos, and by the leaders of several farm groups from all of the tobacco states.

        They drew up a list of recommended changes for Congress to consider for the tobacco program, which has fallen on uncertain times with increased competition from overseas growers and a drop in American cigarette consumption.

        “I'm not going to tell you everything was unanimous, but the list was approved by a majority vote,” Mr. Moore said.

        Philip Morris USA contracted directly with farmers to buy tobacco last year. That leaf was evaluated by graders outside the federal system for the first time since the federal tobacco program began in the late 1930s.

        The other large tobacco companies have since announced they will contract for tobacco as well, circumventing the auction system to buy some of its leaf tobacco.

        Because federal graders are paid from fees levied on the tobacco they grade, farmers say, contracted tobacco must be included to keep the grading program solvent. That's important because the grading system is a key component of setting price supports under the tobacco program.

        During their deliberations, the farm leaders heard from representatives of the four largest cigarette companies and also from companies that buy tobacco for domestic and foreign cigarette makers, Mr. Moore said.

        Along with their call for use of federal graders at contracting stations, the leaders agreed that the grading service needs to be made more “responsive, efficient, accountable and competent.” Philip Morris has complained that federal graders sometimes seem to be swayed in their judgments by economic rather than quality considerations.

        In all, the farm group gave the congressional delegation 11 suggestions for tweaking the tobacco program. A letter outlining the list was signed by Mr. Moore and North Carolina Farm Bureau president Larry Wooten.

        “We will work with them on the details,” Mr. Moore said.


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