Philip Morris Wants to Deal Directly With Farmers

One tobacco giant wants to do away with warehouses, and that suggestion is getting a chilly reception from growers.

Tobacco is one of North Carolina's most time-honored traditions, and for farmers, tobacco auctions are a guarantee that they are getting the most money for their product.

Now,Philip Morriswants to do away with those auctions and deal with farmers directly. Many farmers do not like the idea.

"We see contracting in a lot of areas, in poultry, in hogs and other agriculture commodities that didn't allow... It takes some of the risk out, but it doesn't allow the profit potential that true free enterprise does," said tobacco farmer Pender Sharp.

The cigarette maker says individual contracts would assure it gets the tobacco variety it needs without having to buy extra.

Marion Pridgeon of the Growers Cooperative Warehouse in Wilson says the warehouse system protects farmers from having to negotiate with industry giants.

"We as farmers, having to wear many hats, we may not have that power. We may not have that ability to negotiate prices," said Pridgeon.

"We look at our South American neighbors that grow tobacco under contract for the same companies, and we see them pulling it to market on mules and wagons. We try to do a little better than that in this country," said Sharp.

At least one other company is considering the idea. If the trend moves in that direction, farmers say they will have no choice but to go along.

The change could deal another financial blow to tobacco growers. Since 1997, the amount of tobacco they have been allowed to grow and sell has dropped 35 percent.