WILSON – For the past 10 years, Gerald Tyner has looked forward to seeing tobacco buyout payments arrive.
“When they had the buyout, I won’t expecting that much out of it,” Tyner said.
But the guaranteed money coming into Tyner’s family farming operation has made a difference. The buyout payments, or Tobacco Transition Payments as they officially are known, end this year.
About three weeks ago, tobacco growers and former tobacco quota holders received roughly 95 percent of their anticipated buyout payment. The remaining 5 percent will arrive at some point after Oct. 1 when the new federal budget year takes effect.
Last fall there was a risk that 7.2 percent of this year’s buyout payment would be held due to federal budget issues. But buyout payment recipients learned in January the full amount of money would be coming, just maybe not all in one payment.
Under the tobacco buyout provisions, former quota holders receive $7 for each pound of tobacco quota they owned at the time the federal tobacco program ended in 2004. Tobacco growers receive $7 for each pound of tobacco quota they owned and $3 for each pound of tobacco grown during the course of the last three years of the federal program for a total of $10 per pound.
In 1999, The Wilson Times took an in depth look at the key role tobacco always has played in Wilson County and at what the future might bring.
The outlook for tobacco farming was about the gloomiest ever in the late 1990s. In 1998, the federal government cut the tobacco quota 16.5 percent. Coupled with a 17.5 percent quota cut in 1999, tobacco farmers were hit with basically a 34 percent annual income cut in a two-year period alone.
The federal tobacco program regulated how much tobacco farmers could grow each year. The program also included price supports that helped keep prices farmers received for their tobacco from fluctuating so wildly. Still, tobacco quota gains or cuts were decided based on whatever the outlook and demand for U.S. grown tobacco happened to be at that time.
In the late 1990s, a weakened global economy and a decrease in demand for domestic cigarettes were driving the quota cuts that left many tobacco farmers with curing barns and other equipment sitting idle even though payments were owed.
In 1998, tobacco giants Brown and Williamson, Lorillard, Liggett Group and R.J. Reynolds entered into what’s known as the National Tobacco Settlement with states where the companies were fighting lawsuits over health issues related to smoking. The whole tobacco industry was under attack. And the end of the federal tobacco program and subsequent buyout payments were yet to come.
Farmers faced uncertain years that included more quota cuts, the closing of all but one tobacco auction warehouse on the Wilson market and the shift to contracting directly with tobacco companies until the tobacco buyout details were hammered out and approved in 2004 ending the federal tobacco program in place since the 1930s.
Back in 1999, Tyner was in his early 50s and farming with his eldest son, Gerald Tyner Jr. The two were tending 71 acres of tobacco. The tobacco quota cuts of 1998 and 1999 had taken away the equivalent of 40 acres of tobacco from the family.
“I had bought my poundage myself,” Tyner said.
But after the first round of buyout payments arrived in 2005, Tyner was able to recoup money he had invested buying tobacco pounds.
“I was kind of happy to get a buyout,” Tyner said.
Years when things went well with the tobacco crop, Tyner invested the buyout money in land. Years when the tobacco crop didn’t turn out so well, Tyner invested the buyout money in equipment and other things.
Tyner also used the buyout money to recoup the financial loss he sustained due to tobacco quota cuts in the late 1990s.
Today, Tyner is in his 60s, but not necessarily closer to retirement. He’s still very much an integral part of this family farming operation located in the Town Creek area of Wilson County near Elm City.
Tyner’s youngest son, Donnie, joined the family business officially in 2012 so three families now count on the dollars raising and selling the golden leaf brings in. In 2012, the Tyners planted 400 acres of tobacco. Tyner said they now have 500 acres of tobacco.
Even though the buyout payments are ending, Tyner foresees the family operation continuing into the future.
“The only thing we can do is keep on farming,” Tyner said. “Tobacco has always kind of brought us along. I raised a family on 15 acres of tobacco.”
But that’s simply not economically possible these days.
“We’ve increased a little bit every year,” Tyner said. “I think all the farmers have. We have to tend more acres.”