The Tobacco Transition Act of 2004 ended a 66-year-old federal farm program that limited the amount of tobacco that could be grown. Since then, over a 10-year period, the number of farms growing tobacco declined from just over 40-thousand to just over 85-hundred – but productivity increased by 44 percent.
The farmers who stayed began growing specialty tobacco used for cigars or chewing tobacco. University of Illinois agricultural economist Barrett Kirwan says – the niche markets for tobacco haven’t been hit as hard as the main cigarette market so without the quota system, restrictions were lifted. Farmers no longer had to grow only burley tobacco; they could diversify in chewing tobacco or cigar tobacco, which are specialty, higher-value tobaccos.
Kirwan says – after the buyout, the total acreage farming tobacco in Kentucky declined, but the remaining acres became more productive. They began producing more tobacco per acre on fewer acres. The acreage also relocated to the western part of the state where the soil is more suitable. The study found that the most productive farmers were also the most diversified with crops other than just tobacco.