Contract buying weighed in flue crop talks - exit plan talks still on track
Dec 17, 2007—The Tillsonburg, Ontario News reported recently that The dreaded “C-Word” of the tobacco industry entered recent discussions surrounding the 2008 crop.
Tom McElhone, chairman of the Ontario Flue-Cured Tobacco Growers’ Marketing Board, confirmed Friday contract buying was one of the options discussed during recent industry meetings on the 2008 crop. McElhone said the manufacturers have asked for contract buying, but nothing has been decided at this point.
The board successfully fought an attempt by Imperial Tobacco to push contract buying a few years ago.
At one point over a year ago, the board didn’t want to discuss a 2007 crop until an exit package was in place. When the exit package didn’t materialize, discussions for a 2007 crop started later than normal.
McElhone said a lot of time has passed and the board is answering the call of the government and trade by discussing what’s going to occur in 2008.
“We’re prepared to do a parallel track (of discussions) of exit and 2008 crop discussions,” he said. “In essence, we need to know what the program will look like tomorrow for every producer.”
He said the board has an obligation to all producers and some still want to grow.
“We have no intentions of having the exit package derailed and we have no intention of not seeing this country have the tobacco grown they want,” McElhone said.
Several years ago, a past board chairman said the present marketing and production system would be inefficient once it reached a threshold of around 100 million pounds. The past five years have seen the crop size well below that mark, with total poundage falling the hardest over the last three years. The crop size went from 85 million in 2005 to 32 million in 2007.
“At that freefall, any analyst would say the production would be five to six million (for 2008),” McElhone said.
He emphasized the board will not be swayed from its plan for a universal exit package for all producers. At the same time, the trade does want some tobacco production in 2008.
McElhone explained contract buying is different than the barn buying in place prior to the formation of the board in 1957. With barn buying, the sale of the crop didn’t take place until after the crop was grown. McElhone didn’t have a lot of details on what the companies are proposing for 2008.
Asked if moving to such a marketing system would mean the end of the quota system, McElhone said discussions are preliminary at this point and that kind of detail will be discussed at future meetings
Dec 17, 2007—The Tillsonburg, Ontario News reported recently that The dreaded “C-Word” of the tobacco industry entered recent discussions surrounding the 2008 crop.
Tom McElhone, chairman of the Ontario Flue-Cured Tobacco Growers’ Marketing Board, confirmed Friday contract buying was one of the options discussed during recent industry meetings on the 2008 crop. McElhone said the manufacturers have asked for contract buying, but nothing has been decided at this point.
The board successfully fought an attempt by Imperial Tobacco to push contract buying a few years ago.
At one point over a year ago, the board didn’t want to discuss a 2007 crop until an exit package was in place. When the exit package didn’t materialize, discussions for a 2007 crop started later than normal.
McElhone said a lot of time has passed and the board is answering the call of the government and trade by discussing what’s going to occur in 2008.
“We’re prepared to do a parallel track (of discussions) of exit and 2008 crop discussions,” he said. “In essence, we need to know what the program will look like tomorrow for every producer.”
He said the board has an obligation to all producers and some still want to grow.
“We have no intentions of having the exit package derailed and we have no intention of not seeing this country have the tobacco grown they want,” McElhone said.
Several years ago, a past board chairman said the present marketing and production system would be inefficient once it reached a threshold of around 100 million pounds. The past five years have seen the crop size well below that mark, with total poundage falling the hardest over the last three years. The crop size went from 85 million in 2005 to 32 million in 2007.
“At that freefall, any analyst would say the production would be five to six million (for 2008),” McElhone said.
He emphasized the board will not be swayed from its plan for a universal exit package for all producers. At the same time, the trade does want some tobacco production in 2008.
McElhone explained contract buying is different than the barn buying in place prior to the formation of the board in 1957. With barn buying, the sale of the crop didn’t take place until after the crop was grown. McElhone didn’t have a lot of details on what the companies are proposing for 2008.
Asked if moving to such a marketing system would mean the end of the quota system, McElhone said discussions are preliminary at this point and that kind of detail will be discussed at future meetings
