Tobacco News

Colin Yarmie pulls the little spout from its water-filled growing tray and gestures toward the thousands of other tobacco plants crammed into two steamy greenhouses on his family farm. By the end of May, Mr. Yarmie says, all will be planted in nearby fields, filling 90 acres (36.4 hectares) with Canada’s most controversial cash crop.

And yet, less than two years ago, the 23-year-old farmer’s parents took a buyout from the federal government designed to close the curtains on the industry, and ease growers like them into other, more socially palatable crops.

Last year, 24 acres (9.7 hectares) of tobacco was grown on Yarmie land; this year it will be almost four times as much.

The story is the same throughout southwestern Ontario’s tobacco belt, with almost 50 million pounds (22,680 metric tonnes) of the leaf projected to be grown this season, more than double the size a year before the $286-million “Tobacco Transition Program” was offered. The province has issued more than 260 growing licences, nearly 2½ times the number in 2009, the first post-buyout season, according to Agriculture Ministry figures.

“I always wanted to do this,” said Mr. Yarmie, who attended business school before recently obtaining a tobacco-growing licence and returning to the farm. “But it was never really an option before now … Dad always said, ‘Go get an education, there is no stability in this.’ ”

The tobacco belt’s unexpected and politically awkward rebound – it has not seen a crop this big since 2006 – may ironically be a partial result of the federal government’s own rules. They allow farmers who took the payments to rent their land and equipment and hire out themselves to licence holders, who often are adult children or acquaintances, dubbed “fake farmers” by some.

Mr. Yarmie, who is clearly a bonafide farmer now, said he is paying his parents rent and wages under the system, while they help him with the tobacco, and try to make a go with an alternative crop – shallots.

All but 18 of Ontario’s 1,083 tobacco growers accepted the transition payments in August 2008, receiving on average more than $270,000. The fact that far more tobacco is being grown this year than the last three has understandably infuriated anti-smoking advocates.

“What did taxpayers just pay $300-million for?” asked Neil Collishaw, research director of Physicians for a Smoke-free Canada. “The way the program was initially advertised, tobacco farming was on its way out in Canada…. If it’s on its way out, how come it’s on its way back in?”

The answer, and the recent history of tobacco farming generally, is as hazy as a smoke-filled room. Those at the centre of the controversy insist this is not a story of opportunists taking advantage of a leaky government spending program.

The money offered should have been much more, and would have been had Ontario’s Liberal government agreed to contribute its own share, said John Stewart, a former tobacco farmer who accepted the payment. Quebec matched federal funding in a similar program a few years ago, and the sector was entirely extinguished there, he said.

Ontario never did pitch in, and many growers took the resulting buyouts reluctantly, after being told that tobacco was dying, and that their quotas – valuable assets that used to be bought and sold – would be rendered worthless under the new licensing system, said Mr. Stewart.

The money itself helped pay off some, though not all, of their debts. They still have to put food on the table, and growing tobacco is the only business many of them know, he said.

Another farmer in the “sand plain” region that encompasses Tillsonburg, Delhi and Aylmer is aiming to plant 80 acres (32.4 hectares) of tobacco this year, 18 months after he pocketed the transition payments.

One of the new licence holder pays him rent for his land and infrastructure, and $12-an-hour to work his own fields, “which is even more degrading,” said the tall, lanky grower, who asked not to be named.

“Say you had a business, they take that business away from you and somebody comes along and says ‘You can work for me for $12 an hour.’ Would you be happy, would you wake up every morning with a smile on your face?” he asked.

“I would just like to be able to make a living and support my family and be left under a rock. Because this is still a legal product and there is a demand for it.”

Rather than profit from the buyout, he said the $100,000 he got went straight to the bank, still leaving him with a sizable debt. Much of that red ink was spilled less than a decade ago, when the government and cigarette companies insisted farmers convert their tobacco-drying kilns – pronounced “kills” in these parts – to a new type of heating technology that produces a less toxic product. It cost him $250,000.

The farmer is so angry at the turn of events he said he is actually trying to give back the $100,000 the government paid him so he can farm his land as an owner-operator again, even though it means assuming more debt. No one has been willing to take him up on the offer yet.

Meanwhile, there is at least one clear beneficiary of the program: the cigarette manufacturers themselves. Under the old quota system, prices were essentially negotiated industry-wide by a marketing board, affording farmers some leverage. Under the new licence scheme, each grower negotiates a contract with the company or wholesaler, giving the buyer the upper hand. The price has dropped from about $2.60 a pound to about $2.20 in the last couple of years.

“The companies are happy,” Mr. Stewart said. “They’ve basically got the farmer under their thumbs.”

In fact, the crop is still far off the 140 million lbs. (63,503 metric tonnes) grown just a decade ago. The manufacturers have for years been importing large amounts of raw leaf from Brazil and other developing countries that keep prices cheap with low labour costs. Contraband cigarettes produced on native reserves and elsewhere have also undercut the legal market.

A drive around Tillsonburg makes it clear the business is still in decline, despite this year’s comeback. The old office of the Ontario Flu-cured Tobacco Growers Marketing Board – once the region’s economic hub – has been sold to a local conservation authority, the former owner’s name a faint shadow where its sign once hung. Cigarette company plants have closed; a condominium housing development sits half empty – finished homes side by side with bare, cement foundations – after the developer went bankrupt; the new-looking Kelsey’s restaurant has been shuttered.

Even tobacco farmers who see no future in the business, however, face a significant challenge: finding an alternative crop. Over and over, farmers have switched to vegetables that thrive in the area’s sandy soil, only to drive down prices in what can be fragile markets.

Brenda Lammens is bitterly aware of that danger. She and her husband left tobacco a decade ago, without benefit of government funding, feeling the industry’s days were numbered. They built one of two operations in Ontario that grew Belgian endive and eked out a modest living at it, before a tobacco farmer who had taken a 2005 buyout planted 50 acres (20.2 hectares) of the crop, twice the Lammens’ output.

The price plunged, forcing the Lammens out of the business within two years – and leaving the ex-tobacco grower himself bankrupt.

“It was just very, very hurtful, because someone received … money and abused it and went bankrupt and there were no repercussions from the government,” said Ms. Lammens, who had to sell one of the family farms to cover her losses. “It has destroyed my husband’s desire to want to continue farming. It has been devastating to us.”

Another tobacco grower went into pumpkins, only to have existing growers – afraid their market would be flooded – pelt him with his own products when he delivered them to the Ontario Food Terminal. That was the end of his commercial pumpkin patch, said Mr. Stewart.
Mr. Stewart himself said he considered growing corn and beans this year, but now figures it is economically inviable and might look for a job off the farm.

Farmer Deb Gilvesy is hedging her bets; she and her husband opened a second tanning salon in the Tillsonburg area after taking the tobacco buyout, though it means relying on another product with dubious health effects. The deeply bronzed Ms. Gilvesy believes she has found the ideal transition crop, however, one that is seemingly tailor-made for these environmentally conscious times – and won’t put vegetable growers out of business.

She has already begun growing a field of native tall grasses that can be processed into ethanol and other bio-fuels, just the type of carbon-energy alternative the Ontario government has been promoting. The only problem is that it takes three years for the grasses to get thick enough to make harvesting worthwhile. So now she is arguing that the province do its bit for tobacco growers by providing the start-up funding they would need to get into biofuel grasses in a big way.

“This is home-grown, invest-in-your-back-yard energy,” said Ms. Gilvesy. “There is an abundance of land just sitting there waiting for something new….How often does something new come along in agriculture?”

A few kilometres away, Ms. Lammens struggles to survive on her own, remaining alternative crop – asparagus – against intense competition from places such as Peru and Mexico. She said locals not growing tobacco have tried to be “polite” about the buyouts, which averaged $270,000 per farmer, given the industry’s importance to the local economy. As she considers the layoffs and shutdowns at the area’s automobile plants and other major employers, though, she admits she is not always sympathetic.

“There are a lot of factories that have closed, those people can’t find work, they’re going through transition, too. But the tobacco sector at least got paid something. For the rest of us, there’s no cheque,” she said. “When you hear the cries for more money, you just want to shake your head and say, ‘I don’t want to hear it.’ ”

By Tom Blackwell in Tillsonburg, Ont., National Post