Tobacco Future Uncertain, Not Hopeless
Snell, Will, Forum for Applied Research and Public Policy
In "Uncertain Future," Dixie Watts Reaves and Wayne Purcell provide an excellent depiction of the challenges facing today's tobacco farmers (FORUM, Fall 1999). Indeed, U.S. tobacco farmers have for many years faced a volatile and unpredictable future, but the situation today has escalated the uncertainty to unprecedented levels. This situation not only threatens the economic future of thousands of U.S. tobacco farmers but also has serious consequences for the local economies of many tobacco-dependent rural communities.
Over the years, many areas of the South have reduced their economic dependency on tobacco through agricultural diversification and off-farm employment opportunities. There are still pockets in Kentucky, Tennessee, Virginia, and North Carolina, however, that remain vulnerable to an unstable tobacco economy.
Many tobacco-dependent counties in these states face limited off-farm employment opportunities, low educational attainment levels, and personal income growth well below the national average. Additional income-generating opportunities and educational advancement are critical to the long-term growth of these economies. In the short term, rapidly declining tobacco quotas will certainly have noticeable adverse effects on many of the agricultural and nonagricultural businesses in these areas.
Despite the challenges facing the U.S. tobacco sector, worldwide trends toward increased tobacco consumption and a demand for high-quality American tobacco indicate a niche market for the tobacco produced in the United States. As a consequence, while total demand will likely continue to decline in the foreseeable future, U.S. tobacco will still remain an essential ingredient for tobacco companies as they attempt to meet the increasing global demand for the American blended cigarette. This demand will allow a significant number of efficient U.S. tobacco growers to survive amid this turbulent political, legal, and economic environment.
While a viable U.S. tobacco sector will likely survive, the major concern will be the increased concentration of tobacco dollars among fewer farmers and across fewer geographic regions. …