“Under duress,” the Ontario Flue-Cured Tobacco Marketing Board says it will accept “dreadful” terms from the tobacco trade for the sale of growers’ 2008-09 crop.
“Although the terms of this deal are dreadful, we have a responsibility to provide a legal avenue for the sale of the 2008 crop,” said Linda Vandendriessche, chairperson of the growers’ marketing board, in a statement last week, accepting a deal for a crop size over 25 per cent smaller than the 2007 target.
“The board exhausted all avenues of
discussion with the Tobacco (trade) Advisory Committee in an effort to improve the terms of this agreement,” she said. “However, the trade was entrenched, and in our opinion was immovable.”
The 2008-09 deal calls for a total crop size of 23.15 million pounds, down 27.7 per cent from the 2007 target of 32 million and equal to 8.52 per cent quota utilization, the board said.
The target price of $1.934 per pound is “not reflective of farmers’ increased costs” and is down 35 cents per pound from what farmers got last year, the board said.
“At this price, the 2008 crop will generate only $45 million — $28 million less than the gross value of the 2007 crop and a whopping $169 million less than the crop brought a mere five years ago,” the board said in its statement.
The board said last week it “will now proceed on two tracks. First, we will ensure that there is an orderly market for this year’s crop. Second, we will redouble our efforts to secure a program that will allow our farm families to transition on terms that are fair and reasonable.”