An era ends: Slumping tobacco industry in Md. can no longer sustain an auction

ON THE FARM

January 21, 2007|By TED SHELSBY

For nearly 70 years, Southern Maryland tobacco growers have packed up their barn-dried leaf in early spring and taken it to auction.

They stacked the leaf on shallow baskets in piles that would reach a farmer's waist, sometimes higher.

Growers were careful to place the baskets with their best tobacco - with the thin, cherry-red leaves- at the head of the line.

The sale started with the rhythmic chant of the auctioneer in a tongue that few outsiders could understand. As the seller made his way down the long rows of tobacco, a half-dozen buyers would follow.

The action was fast. A sale was consummated with a wink, a nod or the flash of a finger. Within a minute, up to 30 baskets of tobacco could change hands.

But for the first time since 1939, there will be no Maryland tobacco auction this year.

"There is not enough tobacco sold in the state anymore to warrant an auction," said S. Patrick McMillan, assistant secretary at the Maryland Department of Agriculture.

"A part of our farm history will disappear. It's the end of an era."

Gilbert "Buddy" Bowling, owner of the Hughesville Tobacco Warehouse, the site of Maryland's final auction last year, is among those lamenting the event's demise.

"It's the end of a way of life in this part of the state," Bowling said. "Auctions were more than a business transaction. The opening of the auction was the big social event of the year."

The 72-year-old remembers that dignitaries would show up, including the governor, as well as business leaders.

"Neighbors of farmers would come. They would bring their children and their wives," Bowling said. "It was like a big party."

Maryland is not alone in experiencing the demise of the auction. Tobacco auctions are disappearing throughout the tobacco-growing region of the country, according to William Snell, an agriculture economist with the University of Kentucky.

"We used to have over 200 tobacco warehouses in Kentucky," Snell said. "Now we're are down to a handful, maybe five or six."

Before 2000, most of the tobacco sold in the state was sold at auctions, Snell said. But now, up to 95 percent of the tobacco sold in the country is sold under contract.

Under the contract arrangement, buyers take their leaf to a contract station where a tobacco company that has agreed to purchase the crop pays the farmer a set price, Snell said.

"It used to be a cultural event," said Snell of the auction. "It used to be a social event to celebrate a harvest. Now it has turned into nothing more than just a business."

In his recent report to the General Assembly, McMillan said, "A scant 321,000 pounds of Maryland Type 32 tobacco was auctioned in 2006, less than 3 percent of the crop just 10 years earlier and the smallest on record."

That was just a tiny portion of the crop that had long been the economic backbone of Southern Maryland. As recently as 1982, farmers sold 38.3 million pounds at auction, a sale that pumped an inflation-adjusted $96.5 million into the regional economy.

Tobacco has been a way of life in Southern Maryland for about 370 years. The first European settlers to the region saw the potential of the crop shortly after their ships - the Ark and the Dove - landed at St. Clements Island in 1634. They developed a thriving economy around supplying the Old Country's growing demand for smokes.

The leaf was so important that it was used as currency, according to historians. Accounts tell of the town preacher being paid in tobacco and how a farmer could order a bride from England for 120 pounds of the leaf. With just 12 pounds, a farmer could get a metal-bladed plow.

In another major change for the industry, most of the Maryland farmers still growing tobacco have switched to a different variety. Throughout most of the industry's history, they grew a leaf called Maryland Type 32. It was used primarily as a filler in a tobacco blend to make cigarettes burn more evenly.

Conrad said that Philip Morris Cos. Inc. has asked the farmers with which it is contracting to grow burley instead of Type 32. In the past, burley was grown primarily in Virginia, Kentucky, Tennessee and parts of North Carolina.

Although farmers have complained about the price they received for their leaf for years, it was a state program, not low prices, that led to the industry's sharp decline. In 2000, Gov. Parris N. Glendening offered a buyout program that paid farmers to quit growing tobacco.

A total of 854 eligible growers opted into the program, McMillan said. They accounted for 92 percent of the production. Production declined from nearly 9.5 million pounds in 1999 to approximately 1.4 million pounds in 2004.

"The crop eventually got too small to lure buyers to auctions here," McMillan said. "I'm surprised the auctions didn't close earlier."

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