Last Lifeline for Tobacco Producers: Trade

June 4, 2015 08:29 AM
Last Lifeline for Tobacco Producers: Trade

Welcome to tobacco and sweet potato country. These fertile fields in North Carolina grow some of the best highest quality crops in the world.

“We're the Napa Valley of tobacco production,” says Johnny Barnes, a farmer in Spring Hope, North Carolina.

He isn't just proud of his quality tobacco crop. He’s now the largest sweet potato grower in the country, and it's that vegetable that's taking center stage. 

“Almost half of all the sweet potatoes grown in the United States are grown in North Carolina now,” he explains.

Both tobacco and sweet potatoes rely heavily on outside buyers.

“When you consider how much of our sweet potato crop is exported, how much of tobacco crop is exported, how much of our peanuts are becoming exported now,” says Barnes. “American agriculture is very dependent on export markets.”

He isn't alone in knowing trade deals are key. Timmy Thomas, a farmer in Timberlake, North Carolina, has hogs and row crops.

“People think of U.S. agriculture as feeding people of the United States, but it's agriculture now is a world commodity,” says Thomas. “We have a tremendous amount of exports that go all over the world and exports are a huge part of American agriculture. That’s what keeps us in business.”

The demand for sweet potatoes is booming.

"It’s growing every year, growing by leaps and bounds,” he says.

Tobacco is taking the opposite route.

“Domestic consumption is going down at least 5 percent a year,” says Barnes.

That means the future of tobacco production in the U.S. hinges on trade. He says almost everything they grow now is destined for another country.

“Last year was the first year that China surpassed the EU being our number one export customer,” says Barnes. “So the growth for tobacco exports is Asia."

To keep that lifeline alive, Barnes says the industry needs to be included in major trade deals. 

“That's probably the end of our industry, if we can't export," says Barnes.

Currently, heavy tariffs are hindering exports into certain countries.

Vietnam's import duty rate on cigarettes is 135 percent. Jordan is even larger, at 150 percent. 

While the exact details of the Trans Pacific Partnership (TPP) have been secretive, some reports say it would eliminate tariffs on products such as tobacco. However, there's strong opposition, as opponents see tobacco as lethal, and doing away with the tax would open the door for increased usage. To Barnes, this isn't the case.

“We need tobacco to be treated like any legal commodity that we have in our trade agreements and not be cut out and left out.”

It’s the type of tobacco grown in U.S. soil that’s helped propel demand.

“In the United States, the only thing that's kept us in the tobacco business is the quality of our tobacco,” Barnes explains. “They can't get it anywhere else in the world. They can't grow it in Brazil. They’ve tried."

While sweet potato demand is growing at home, it's also heavily dependent upon trade.

“Almost half of what we grow, we export now,” says Barnes.

Most of his sweet potato exports go to Europe, and trying to make deals with buyers in the EU is one of their biggest challenges. 

“It's more like the wild, wild west,” says Barnes. “You better know who you're dealing with and have a trustworthy partner.”

With such challenging logistics, Barnes says the Transatlantic Trade and Investment Partnership (T-TIP), which is the trade deal being negotiated with the EU, could be huge. 

“We'll be much better off with a trade agreement,” he says. “There are certain countries within the EU, for example, Germany has an excise tax and a tariff on sweet potatoes.”

As these growers transplant another year's crop, it's demand both at home and abroad that will create another profitable year. 

“We just hope people continue to love sweet potatoes, and that seems to really be doing well.”

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Spell Check

Western, NE
6/4/2015 08:54 PM

  Aren't we all dependent upon exports. I like a good cigar every now and then. Especially when planting and harvesting is completed for the year. I'd hate to rely upon foreign tobacco for my cigar, but can't say all of the leaf is all homegrown anyway. Had Cuban cigars before, not very good. Never did know what the hype was about them, but...

Power, MT
6/5/2015 11:13 AM

  What I would like to say is not easily explained. Here is a link to an arrival about the TTIP and TPP. NAFTA at 20: Lori Wallach on US Job Losses, Record Income Inequality, Mass Displacement in Mexico via @truthout


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