WASHINGTON – U.S. Congressman Mike McIntyre is pushing the Department of Agriculture to help tobacco farmers by urging it to make an adjustment to the tobacco federal crop insurance program so that claim amounts may better reflect market prices. This is in response to recent requests by tobacco farmers from all across eastern North Carolina who have contacted the office urging assistance on this issue.
“This is a critical issue for our tobacco farmers, and I am urging the USDA to make this adjustment,” McIntrye said. “The federal crop insurance program was put in place to allow farmers to insure against the down side risk of agriculture. However, the level of support currently provided by the program does not adequately provide farmers the ability to control against risk incurred by adverse weather, pests or pathogens and the coverage needs to be raised to reflect market prices for tobacco.”
In a letter to th eUSDA Risk Management Agency, McIntyre noted that the current price election for tobacco insurance program is $1.60 per pound, which is a substantial decrease from the 2010 price election of $1.75 and an even steeper drop from the 2009 price election of $1.85. The price election is the rate paid per pound to tobacco producers who have a claim for crops that have been destroyed.
Farmers in North Carolina have contacted the congressman and raised concerns that the price election established by the tobacco program does not reflect market prices for leaf tobacco. A typical price for premium grade tobacco is $2.15 per pound and a tobacco contractor in North Carolina has calculated an average price estimate this year for flue cured tobacco of $1.94 per pound. In calculating this estimate, tobacco buyers consider the normal amount of tobacco produced in each stalk position harvested by the grower, the grade price range for quality variations in each stalk position and the average expected crop yield for a normal growing season.
McIntyre is North Carolina’s most senior member of the U.S. House Agriculture Committee has been a strong advocate for tobacco producers throughout his time in Congress. Congressman McIntyre was the author of the Jenkins – McIntyre tobacco buyout bill that became law in 2004.