
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, November 5, 1993                   TAG: 9311050106
SECTION: BUSINESS                    PAGE: A-11   EDITION: METRO 
SOURCE: Associated Press
DATELINE:                                 LENGTH: Medium

VA. TOBACCO CROP STAVES OFF DISASTER . . . BUT NEXT YEAR?

Growers who dealt with a drought, a heat wave and a hail storm ended up getting paid less for their tobacco in Virginia this year and had less to sell, state officials said.

But Stan Duffer, a marketing development manager with the state Department of Agriculture, said, "Considering the weather this crop was exposed to, it did very well."

It was too cold and wet in the spring and too hot and dry in the summer, when growers had to pay high fuel and water bills to irrigate the plants. And some fields were hit with a hail storm in the fall.

"It was probably one of the toughest years they've had to try to produce a crop," said James Jones, a tobacco specialist with the Cooperative Extension Service. "The weather started out poorly and ended up poorly."

Even if the growers have good weather next year, they expect to fare worse because the amount they are allowed to grow is being trimmed by an estimated 10 percent. Also, foreign competition is increasing, anti-smoking regulations are mounting and the tax on cigarettes may jump 75 cents a pack.

Usually, a lower supply means higher prices. But when the last of the six flue-cured tobacco markets closes Wednesday, growers will have sold less than 94 million pounds for an average of $169.57 per hundred pounds, Duffer said. Last year, about 100 million pounds passed through the markets for an average price of $176.13, nearly 4 percent more.

The sales average for other tobacco-growing states in the Southeast was a dollar lower.

President Clinton's proposal to increase the per-pack tax on cigarettes from 24 cents to 99 cents to help pay for health-care reform will, if adopted, reduce consumption, Jones said.

That, in turn, will cause the loss of many tobacco-related jobs and a severe drop in tobacco-related tax revenue in Virginia, said Charlie Finch, chief administrative officer for the Flue-Cured Tobacco Cooperative Stabilization Corp.

by CNB