on which tobacco is grown are in general more diversified than those, say, in the grain belt. Tobacco growers, therefore, tend to be highly capable and versatile farmers. They are also extraordinarily thrifty and independent: according to the Agricultural Statistics Yearbook for 1976, North Carolina, a tobacco state, was first in the value of farm products consumed on the farm; Kentucky, another tobacco state, was fourth. To remove these people from farming would be to squander an invaluable resource. To make them dependent on welfare-on food stamps indeed-would be to abandon all hope of sense or sanity.

The tobacco program is not a subsidization of smoking. It has nothing to do with smoking and health; smoking will continue whether or not the tobacco is grown by small farmers. The program, in intention and in effect, is a conservation program. It conserves the small farmer and the small farm. It conserves land. And it conserves a fairly high quality of agricultural character and know-how.

Like many friends of the tobacco farmers, I long for the day when tobacco can be replaced by other, healthier crops. share that hope with the Surgeon General. But his proposal will not advance that hope. It will not do away with tobacco. It will do away with tobacco farmers.

The price support program for tobacco should be continued, for the simple reason that it makes sense. Meanwhile, since tobacco is, in fact, neither a healthful nor a necessary product, we need a careful program to replace it.

We need to develop a different small-farm economy to support the farm families now dependent on tobacco. This will not be easy. As David DeBuisson recently wrote in The Sentinel of Winston-Salem, North Carolina, it will require "a radical chane in the food distribution system to provide a local or regional market for vegetables or fruit crops. It will require an equally radical change in farmer attitudes, and a considerable amount of education."

And one might add that it will require a highly diversified farming, involving both plants and animals, that will not force too much of the land into cultivation. That is a difficult possibility, but it is not hopeless. It is infinitely better than knocking the economic props out from under 60,000 farmers, and then expecting to "educate" them. THAT is hopeless.

[Editor's Note: This article reprinted from the magazine Organic Gardening and Farming, with permission of the publishers and the author, Wendell Berry. Article furnished through courtesy of Burley Tobacco Growers Cooperative Association, Lexington, Kentucky. The author, who farms at Port Royal, Ky., is a staff member of Organic Gardening and Farming, published by Rodale Press, Inc., Emmaus, Pa. He is a well-known Kentucky writer, and a former teacher at the University of Kentucky.]

STATEMENT OF THE GREATER LEXINGTON AREA CHAMBER OF COMMERCE The Greater Lexington Area Chamber of Commerce appreciates the opportunity to provide some commentary for the record as part of the hearings on SB 3118 "Smoking Deterrents Act of 1978."

For your information, the Lexington Chamber of Commerce is the largest business organization in Central Kentucky representing some 1,425 member firms. These business members are professionals, retailers, wholesalers, manufacturers, tobacco firms, general services, financial enterprises and many, many others. Approximately eighty percent of our membership is composed of small businesses and individual proprietorships. Thirty business executives comprise our board of directors, who conduct the business of the Chamber.

At the last regular meeting of the Board of Directors, there was discussion regarding SB 3118 which would appear to further regulate, tax and control the use of tobacco by American citizens. The Board moved and unanimously approved a motion that the Chamber go on record as being opposed to any additional regulations or taxes on the tobacco industry.

This bill is viewed not only as a further unnecessary regulation and taxing of the industry, but as a further encroachment of government into the personal lives and habits of its citizens.

A quick look at the contribution of the tobacco industry in the Lexington SMSA (Standard Metropolitan Statistical Area) shows the following:

In 1978 tobacco growers made expenditures in plant and equipment in the following amounts:

The total of the above amounts to $27,718,000. In the market last year, total sales amounted to $140,272,655. This money impacts the entire Central Kentucky area because it goes into the hands of so many small producers and is spent immediately. It should be noted that these figures are for only the six county SMSA. Tobacco stored in Lexington is valued at $321 million this year and generates taxes for the city of Lexington and the Commonwealth of Kentucky.

In addition, tobacco companies have some $48 million in facilities built in Lexington which generate property taxes for the local community and provide an average of 1,000 jobs. These jobs with our processors generates a payroll of approximately $10 million annually.

In addition to the 1,000 jobs provided by these processors, there are approximately 4,000 other jobs provided by warehouses and farmers producing the tobacco.

In the December 1977 issue of the Chamber of Commerce magazine Lexington, there is an article that delves into some detail as to the economic contribution of tobacco to our local economy.

The article appears on page eight. We would like to enter this publication into the record.

In reviewing SB 3118, it becomes apparent that this is another attempt to saddle an industry with additional costs which either must be absorbed by that industry or passed on to the consumer.

[From Lexington, December 1977]

TOBACCO-THIS MARKET MEANS MILLIONS TO LEXINGTON

Each year shortly before Thanksgiving, the warehouses that have stood silent for so long suddenly come to life. The tobacco sales season has arrived. Burley tobacco, and lots of it. In the next ten weeks more burley tobacco will be sold in Lexington than anywhere else on earth.

The golden leaf, fifth largest among American cash crops will be responsible for adding over one half billion dollars to the Kentucky economy. That represents a major investment to this community's fiscal well-being. But for some reason this major "industry" does not receive the attention that it deserves. A one half billion dollar industry deserves attention.

Jack Lewyn, executive director of the Council for Burley Tobacco. offered an explanation for this phenomenon. "We're a unique industry," he said. "Tobacco is enormously complex yet an international industry with diverse interests and by it's very nature is fragmented."

He almost lost us right at the start, but we asked him to convert that mouthful into bite-sized chunks. Basically we learned that the industry is comprised of farmers, warehousemen and producers. As you might expect, each of these industry segments have their own set of priorities.

It is the farmers, or growers of the crop, who are responsible for the activity that is readily visible during the selling season. They bring their annual crop to Lexington (or one of over thirty other markets in Kentucky) for auction in one of thirty-three local warehouses. Not unlike farmers from across the nation, their profit margins are low. They are interested in receiving the highest possible price for their crop.

Seventeen firms or corporations own the warehouses scattered around the city. The first one in 1906 was opened by Charles Bohmer. a Virginia native who settled in Lexington. The original stood on South Broadway at Pine Street but was destroyed by fire in 1957. There are many prominent persons associated with warehouses, some still bear the name of the founder. Among them are Dr. Sam Holly (Fayette Tobacco Warehouses) and Morgan Gentry.

Charles Marshall, an experienced officer and member of the Tobacco Board of Trade, described the auction process.

"The Tobacco Board of Trade determines the schedule for the selling of tobacco in the warehouses," he explained. "We get our selling time based upon the number of 'spots' on our warehouse floor."

A "spot" simply means the number of positions available to display a basket (tobacco stacked for ease of handling and inspection) for the buyers. There are 84.000 "spots' available in Lexington.

"This is the way it works everywhere," Marshall added. "At my warehouse, the manager, Brown Sharp, acts as the one who supervises activity." How do the farmers decide where to take their crop for sale? Marshall explained, "The best method is personal contact. Other warehouses have tradesmen in other towns. The larger houses will have several solicitors or tradesmen. "After the tobacco is in the warehouse, government agricultural inspectors will grade the tobacco according to quality. We act as an agent for the grower with the buyers."

Thanks to the early television efforts of the American Tobacco Company (for those who are over thirty) most Americans are familiar with the melodic chant of the auctioneer. His sing-song voice echoing through the warehouses of Lexington is as pleasant as the ring of any cash register on Main Street. Last year alone Lexington's warehouses racked up sales of over $114.8 million.

THE MONEY MEN

Who brings this $114.8 million to town? The tobacco manufacturers and dealers. Some of it is here all year in the guise of dealers such as G. F. Vaughan Tobacco and Southwestern Tobacco Company, a subsidiary of Universal Leaf. Dealers, which include the Dibble Brothers (North Carolina), Parker (Kentucky), J. C. Monk (North Carolina) and Austin (Tennessee) act as buyers for any number of clients in this country or abroad.

A publication of the Tobacco Institute (Washington, D.C.) about Kentucky burley tobacco notes that since the early national period, Kentucky tobacco has had foreign outlets. The types now exported-and for more than the past century-differ from those that reached European importers via the Mississippi in the late 18th century or went first to eastern ports of the United States from early in the 19th century.

Burley tobacco is shipped to all continents. West Germany, Sweden, Italy, Denmark, Switzerland, Netherlands and Japan are major buyers. World-wide consumer use of all tobacco commodities rose or was maintained in recent years. Kentucky tobacco, much of it prized burley, is to be found in all of these products. The United States is the leading tobacco exporter and the third largest tobacco importer. Recently about thirty-five percent of the U.S. tobacco crop has been exported. In 1976, U.S. exports of leaf tobacco and manufactured products totaled some $1.46 billion, a record high. Imports came to approximately $316 million. The difference represents a positive net contribution of over $1.1 billion to the U.S. balance of payments in calendar year 1976.

The other link in the tobacco buying chain is composed of manufacturers who buy for their own usage. These are the large corporate names familiar to almost everyone. R. J. Reynolds Tobacco, American Tobacco, Phillip Morris, Liggett, Brown & Williamson and others.

The tobacco that is on the market is graded by government agricultural inspectors by quality standards. They establish a minimum (or guaranteed value) price for each grade of tobacco. This insures that the grower will receive no less than the specific price established for that grade of leaf. If bids for the leaf do not go higher than the support price, the tobacco is purchased by the tobacco "pool" financed by the federal government and stored until the demand creates a higher price for the leaf.

This tobacco support program is widely misunderstood. Unlike other price supports, the tobacco program is not a subsidy. It's a type of government loan, and businessmen should recognize the difference. Virtually every other business operates with credit.

Jack Lewyn of the Council for Burley Tobacco added, "Because of enabling legislation and growers in the tobacco states, the USDA Commodity Credit Corporation in effect borrows the money and price supports are effectively applied. "The price support program is not a subsidy. It was first applied in 1941 for the balance of the 1940 crop. It's more of an effective borrowing program than a subsidy. In fact, it's one of the few programs in which growers can take their product to the market and be assured of a fair price.

"The manufacturers," Lewyn says, "still create the demand for the product which has a great deal to do with establishing the price. Always the grower has taken his product to the market (before the support program went into effect) but instead of setting his own price it amounted to a "what-will-you-give-mefor-it" situation. This was a tragic procedure.

Lewyn related that in the early days buyers were treated like royalty while the humility of the growers was astounding. Stability to the industry was achieved with the implementation of the price support program in 1941.

Jack Lewyn is a fascinating man with a diverse occupational background. He has lived in Lexington since 1945, transferred from Louisville by the Associated Press. A native of Wheeling, West Virginia, it was there that he had his first contact with the world of tobacco.

Lewyn describes it this way: "Covering the burley belt for the AP was most interesting. I was transferred to Baltimore but I had lived in Lexington for two years too long. I had to come back."

A veteran of the second world war, Lewyn joined the Burley Tobacco Growers Cooperative in January of 1962 as vice-president for public affairs until assuming his present position in 1975. Married and the father of three children, Lewyn lives a busy yet rewarding life. The man knows about tobacco, and while too modest for his own good, obviously performs a vital service for this diverse and highly important industry.

He perceives the role of the Council as that of "communicator." Their function is to provide a medium for communication. They tell the tobacco story to others. "Sure," he admits, "we have problems. Some inside and some on the outside, but we are addressing those problems in an orderly, responsible manner. One reason that the tobacco industry has succeeded to the extent that it has is that the growers have responded to the needs of the industry. The grower cares. And he's very effective."

IN FAYETTE

While the figure of $114.8 million dollars from the sales floors is most impressive, so are the production figures for Lexington and Fayette County. While we may tend to think of Lexington as an ever-expanding urban area, the amount of land devoted to agricultural use is substantial.

Over thirteen million pounds of the great leaf was grown in Fayette County last year which brought $16 million at the market. While industry sources put the figure at $500 million circulating through the local economy, obviously the Fayette County production's $16 million stayed here at home.

BRIGHT BURLEY

Through a fortunate accident of nature-assuming that there are “accidents” in nature-a revolution took place in the farming of tobacco with the discovery of "bright" or "white" burley. The Tobacco Institute records that on a since forgotten day in the spring of 1864 two Ohio tenant farmers were seeding tobacco beds when they ran short. Crossing the river to Bracken County, Kentucky, they acquired seeds of "Little Burley."

The seedlings that consequently developed were sturdy and of fine texture, but the color was a bright yellow. Believing that the plants were defective they destroyed them. In the following season some of the seeds obtained from the Kentucky supplier were again sowed. When they displayed the same traits, an imaginative farmer transplanted about a thousand of them. In their maturity the plants, described then as "healthy and thrifty" had an unusual stalk and broad leaves of pale green.

These "freak" tobacco plants caused quite a sensation. When cured, the leaf was a bright yellow or cream color but the experts said that it smoked "bitter." Ultimately the development of this new "white burley" created a product that brought an excellent price. The spread of this new type was rapid, especially through Lexington and Central Kentucky. White burley was "in" and the rest is history.

CONCLUSION

Burley tobacco is prized for its "poracity," that quality which allows it to be very absorbent and an ideal leaf for sweetened, flavored or treated tobacco products. Plant pathologists have improved the breed over the years whereby the poracity of the plant preserves the moisture, flavor and aroma of the leaf.

It is this quality which makes it vital to the production of the modern American blended cigarette.

Kentucky, with it's firm place in the national economy and enviable position among the burley belt states, has enjoyed the success brought about by the production of this golden leaf crop. Lexington, as the center of the burley auction markets, has perhaps benefited the most from the success of the tobacco industry. So while you may only take note of the heightened activity around the warehouses during the selling season, don't forget that the tobacco industry is a year-round asset for the Lexington area. Growers, suppliers, warehousemen, agents, buyers and manufacturers make up this diversified, complex yet vital industry that is quite important to the local community.

A one half billion dollar industry deserves attention. It has ours, give it yours.

Tobacco culture was brought to Kentucky with the beginning of settlement in the late 1700's and for many years tobacco has been Kentucky's chief cash crop. Over the years, marketing, processing, and manufacturing facilities have been developed for Kentucky tobacco along with a host of service and supply industries and a price support and marketing quota program for growers.

PRODUCTION AND MARKETING

Tobacco is Kentucky's chief cash crop. About 100,000 Kentucky farms have income from tobacco, and this provides important employment for the work force of 136,000 family and hired workers on Kentucky's farms. Tobacco has a high cash value and 1977's crop brought growers about $572 million. For many years it has been the leading source of cash farm income, accounting for 30 percent in 1976. Tobacco is particularly important on small and medium-sized farms of which Kentucky has a very large number.

With about one-fourth of the U.S. tobacco crop, Kentucky leads the States in burley tobacco production and ranks second to North Carolina in total tobacco production. About 30 percent of U.S. farms growing tobacco are in Kentucky. In spite of the economic importance of tobacco, only a relatively small number of acres are needed to meet the demand. The total tobacco acreage in Kentucky (arount 200 thousand acres per year) is only about 4 percent of the acreage of principal crops harvested and 2 percent of the total cropland of the State. Present legislation provides for price support for any crop of tobacco for which growers approve marketing quotas (by two-thirds majority). Kentucky tobacco allotments (primarily burley) have an estimated capitalized value to their owners of about $950 million. This value represents about 11 percent of the total value of Kentucky farm real estate (land and buildings).

About 94 percent of Kentucky's tobacco is burley. The balance is fire-cured and dark air-cured types. The various types of tobacco are grown in certain welldefined areas where the soil and climate have been found to yield a product with properties desired for manufacture or for export. In addition to the factors of soil and climate, the methods of growing and handling are largely determined by the kind of leaf required by the trade. Dark tobacco, grown in the western part of the State, is less important in production and trade than formerly, but farmers in every Kentucky county grow burley tobacco.

Despite the small acres required, tobacco is an important employer of farm labor. About 300 man hours are required to produce and market an acre of tobacco. In Kentucky, the tobacco enterprise accounts for about 28 percent of the hours of farm labor. Burley production remains unmechanized so tobacco has maintained employment in Kentucky's agriculture, while technological developments in other crops have released farm labor to other uses. For the 1977 crop, total labor cost (hired and unpaid family labor) represented about $165 million.

In addition to providing steady income and employment for the farm sector, tobacco production supports sizeable service and marketing industries. For example, Kentucky farmers purchased fertilizer, gasoline, petroleum, machinery, custom and contract work. Based on cost and returns data for field crops cash

1 Project Leader-Tobacco, Commodity Economics Division, Economics, Statistics, Cooperatives Service, U.S. Department of Agriculture, Washington, D.C., Prepared January 1978.