Can we catch a break? - First Quarter 2010
The government is creating the perfect storm, hurting the same growers it depends on so deeply.
TFQ Editorial Staff
What does this have to do with tobacco? Well, my point is that it’s frustrating to watch our government take money from the people who are working for it and “re-appropriating” to those who did not. Tobacco is responsible for generating billions of dollars for the U.S. government, yet every chance the government gets it takes a shot at the industry. Not usually a meaningful shot, and not typically one that actually hinders big tobacco, but too often a shot that ripples down and affects the farmers who don’t have the endless resources to emerge unscathed.
In an already heavily regulated industry there is going to be exponentially more regulated with the FDA involved. Smoking consumption is going down, international competition is going up and the prices of fuel and fertilizer still have input costs outrageously high. Profit margins are getting pushed together from both ends, squeezing many growers out of the business. And just when you think things can’t get worse, the U.S. government wants to step in yet again.
After the latter Bush administration cut H-2A rates, North Carolina State’s Dr. Blake Brown, one of the most respected agricultural economists around, says the new administration is looking to repeal those cuts, and new wages could realistically be as high as $9.73. Now I realize that this labor and the third-party companies that help provide/regulate it are vital to the agricultural industry, but I don’t see where raising the wage $2.16 per hour per person at this point in time can even be considered. This labor force shows up, works hard and provides a valuable service, but sinks very little of that money back into the local economy. Virtually every dime these workers make gets shipped straight out of the country (an estimated $150 million, thank you very much). And no one begrudges them for coming here and working their tails off so they and their families can have better lives in their homeland. But is it worth putting equally hardworking American farmers out of business to do so?
Labor is already more than 30 percent of the cost to produce tobacco, and now you’re talking about jacking up H-2A rates by 29 percent. When did it become so politically incorrect to put our own first? Remember the old maxim about shearing the sheep many times but only being able to skin it once? Making the extra two bucks an hour would be great for the labor this year, but what about next year when so many of the farmers that are now employing them have walked away from the industry? If the government wants to keep fleecing the tobacco growers for years to come, it needs to be more careful about wielding its knife amongst the flock.