U.S. tobacco farming is bigger than ever

Sutton said the company making changes, including coming out with new products to meet the demand for smokeless tobacco. And Sutton said there is still plenty of demand from the 45 million smokers in the domestic market.

But the domestic market isn’t where most American-raised tobacco ends up. According to the Department of Agriculture, more than 60 percent goes overseas. Not only is it going to traditional trading partners like Japan and Germany, but increasingly to developing countries like China, Korea and Ukraine.

And that has anti-smoking groups alarmed.

“There are 5 million people around the world dying each year from tobacco now. It’s going to grow to 10 million a year by 2020.  And 7 million of those deaths will be in developing countries,” said Kathy Mulvey, international policy director for Corporate Accountability International. The group works with the World Health Organization to curb smoking abroad.

She said it’s not just tobacco being exported, but a health disaster. Mulvey and other critics say PhilipMorris International aggressively promotes its products in developing countries on billboards, television and in movie theaters — practices no longer legal in the U.S.

PhilipMorris USA’s Sutton declined to discuss the company’s booming international business.

“I can’t. I’m not allowed to,” he said.

He said overseas operations could only be discussed by sister company Philip Morris International. But neither representatives of PMI nor its corporate parent Altria would speak to us on camera.

Just recently the two companies split. The international unit will be headquartered in Switzerland and effectively be shielded from American regulation and litigation. Philip Morris International says the split will encourage growth.

For the Vaughns and Barbre, who sell their crops to PMI, a boost in overseas demand could mean greater demand for their crop. Are they bothered that they are growing a crop that is likely to harm someone, somewhere?

“It’s their choice to smoke,” Randy Vaughn said. “It’s not like we’re saying you have to smoke cigarettes.”

“Somebody is going to grow it,” Barbre said. “I guess being an American you maybe feel a little better that it’s being exported.”

The new tobacco farmers and more tobacco acreage may have been the last thing health groups expected when the government eliminated price supports.

“The hope would be that by eliminating the quotas there would be fewer farmers then engaged in growing this crop,” Mulvey said.

In fact, there are fewer farmers since the end of the program. But there is more tobacco being grown. And companies are investing in growers like Rod Keugel to a degree not seen in the past. PhilipMorris USA picked up the tab for some of his equipment and a tobacco barn. Critics say the manufacturers value these relationships even more for the political benefits than the tobacco.

“Tobacco companies, they don’t have a positive public image, you know,” Mulvey said. “If they can put the farmers out front they can get much more favorable responses from the public and the policy makers.”

Mulvey points to protests such as one against a tax increase on cigarettes in 1994. The company bused in their employees along with tobacco farmers. The tax was defeated.

Keugel is also wary of the tobacco companies’ intentions. He received a mailing from Philip Morris USA encouraging him to complain to Congress about a proposed cigarette tax. He worries that as more supply comes on line the companies will try to control the way farmers do business.

“Not only the way we do business but the way we live our lives,” he said. “You know, instructing us when we need to make those political phone calls, even orchestrating what we need to say to our senators and representatives.”

Sutton said PhilipMorris USA is not trying to buy the strength of the farm lobby.

“I think it’s the other way around, really,” he said. “What we’re trying to do with growers on those political types of issues is to make them aware of what’s happening.”

Not too long ago, Big Tobacco was on the hot seat, and the American tobacco farmer was on the run. Not anymore. What didn’t kill the golden leaf may have made it stronger.

Despite the antismoking movement in this country, buyouts, additional taxes and suspicion of tobacco companies, Keugel said he will continue to grow tobacco.

“Well for one thing it’s what I know,” Keugel said. "It’s what I’ve been taught all my life. There is an art to raising tobacco. It sustains our farm. Its profitability has allowed us to buy a farm. It’s taken us from tenant farmers to farm owners. Tobacco has done that. Nothing else but tobacco.”

PhilipMorris International told us in an e-mail that wherever they do business they advocate for comprehensive regulation on the manufacture, sale and use of tobacco products, and that they support wide-ranging regulations that cover mandatory health warnings, limitations on public smoking, and restrictions on advertising.

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