North Carolina's family-owned farms adapt to shifting tobacco industry

There once was a time when the tobacco industry was one of the most important industries in North Carolina and the backbone of the state’s agricultural market.

As the number of American adults who smoke has declined steadily over the last five decades, the nature of tobacco farming has shifted from smaller, family-owned operations across the state to large-scale farms concentrated in eastern North Carolina.

Stanley Hughes, a tobacco farmer and owner of Pine Knot Farms, which is just north of Hillsborough, said the automation techniques employed by these larger farms are expensive, but they allow for a significant increase in tobacco yield to compensate for lower tobacco prices.

“These larger farms put in different kinds of automation that eliminate extra labor, and they can grow more,” Hughes said. “I don’t want to be in that kind of financial bind because you have to have more money to do all of that.”

Rather than expanding and potentially going into debt, Hughes has found new ways to reinvent his farm by rotating out various crops and switching to organic tobacco and produce. This allows him to take advantage of different markets, as well as sell his goods for higher prices to match the “organic” label.

“I’ve switched to other crops and have been able to grow more using some mechanical automation,” Hughes said. “We do crop rotation where we will plant tobacco, then come back later and grow some sweet potato and wheat.”

Pine Knot Farms covers roughly 125 acres, 30 of which are devoted to tobacco. The farm is expected to see an increase in tobacco yield this harvest season, Hughes said.

Many non-tobacco farmers in the county have also diversified their crops in order to garner a larger profit from their land.

Ben Grimes, owner of Dawnbreaker Farms, said his farm uses an operation that accommodates many livestock species and produce.

“Some farmers, rather than continuing to do what they’ve been doing all these years, have decided to go the alternative route and diversify,” Grimes said.

Grimes was critical of the fact that farming trends in America continue to place a bigger emphasis on large-scale farms that can churn out more produce for consumers.

“The agricultural model that we’ve been following for the last 40 years has resulted in farmers having to abandon their land, move to the city and farms getting bigger to make a profit,” Grimes said. “The era of ‘Get Big or Get Out’ that’s in American food policy is destroying small farms.”

Hannah Burrack, an extension specialist with the North Carolina Cooperative Extension Service at N.C. State University, said the most significant change in the tobacco industry in the state was the Tobacco Transition Payment Program, or “tobacco buyout,” signed by President George W. Bush in 2004.

“For the most part growers wanted this,” Burrack said. “They wanted the flexibility to grow additional acreage.”

The federal government subsidized tobacco growers by providing them a stable selling price against a normally volatile market, Burrack said. The catch was that the government regulated how many acres of tobacco that could be grown, creating a quota on available tobacco.

“The buyout was a series of 10-year payments to growers to compensate them for the fact that they essentially no longer had this guaranteed amount of income that they could count on if they grew a certain amount of acreage,” Hughes said. “What that did was that it removed an external constraint, the number of tobacco acres that there could be in a given area, but it also changed the way growers made money.”

Before the buyout, farmers sold their produce at auction houses where companies bid for the best tobacco. Now, farmers don’t take the risk of growing tobacco unless there’s a pre-arranged contract with a buyer, Hughes said.

Hughes noted that while the total number of acres of tobacco grown in the state has remained constant over the last 10 years — about 160 to 180 thousand acres — there has been a shift to larger farms that can produce more than 1,000 acres of tobacco.

“Unless there’s a change in the way that tobacco is used, it’s unlikely that we’re going to see a substantial increase nationally or globally,” Hughes said. “Most of the tobacco grown in North Carolina is used for cigarettes, and that market’s unlikely to grow.”

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