Tobacco Trust Fund key to N.C. agriculture’s future

The N.C. House’s version of the state budget proposes to permanently eliminate the Tobacco Trust Fund Commission, putting that money into the General Fund to help cover the budget shortfall. Since 2001, the Tobacco Trust Fund has received an annual appropriation of several million dollars from the General Assembly. These funds were awarded to the state under the 1998 Tobacco Master Settlement Agreement (in the current version of the House budget, these moneys are called Tobacco Master Settlement Agreement Funds). Now that this has become a hot topic in the budget debate, some have been wondering what the Tobacco Trust Fund actually does for small farmers and local, healthy food. The name of the fund doesn’t describe the breadth of work it supports.

The Independent Tobacco Trust Fund Commission, comprising 18 appointed members, makes grants to farmers and nonprofit organizations to develop new agricultural products, study new opportunities for growth, and create innovative operational methods on farms. The Tobacco Trust Fund doesn’t operate as a subsidy to former tobacco farmers: It makes grants, not direct payments. Those grants enable farmers to risk investing in new, unproven technologies. The lessons learned from the grants are then shared with the rest of the state’s farming community, allowing North Carolina’s agriculture industry to grow and adapt faster than it otherwise would.

Western N.C. has seen particularly significant local-food growth thanks to the Tobacco Trust Fund. Farmers and food entrepreneurs using Blue Ridge Food Ventures, a shared-use food-processing facility in Candler launched with funding from both the trust fund and the Golden LEAF Foundation, have increased their sales by close to $4 million since 2005. Carolina Ground, a small-scale, cooperatively run flour mill in Sylva that buys organic wheat from North Carolina farmers, was started with Tobacco Trust Fund money. The new WNC Regional Livestock Center (which is increasing marketing opportunities for small cattle farms), New River Organic Growers in Boone (a vegetable-marketing cooperative) and the successful local-food campaigns of the Appalachian Sustainable Agriculture Project, Buy Haywood and RAFI-USA’s WNC AgOptions program have all received significant trust fund investments.

Over the past nine years, the Tobacco Trust Fund has invested more than $45 million in grants to increase the diversity and resilience of the state’s farm economy. From 2001 to 2006 alone, Tobacco Trust investments were leveraged into $62 million in farm income and more than $3 million in state tax revenue — all without a dime of taxpayer money. Moving N.C.‘s agricultural economy away from a lucrative cash crop like tobacco toward new high-value crops and markets is a challenge that the state’s farmers have met with determination, creativity — and the help of the Tobacco Trust Fund. As a result, N.C. is recognized as a national leader in both local-food markets and diversified, small-scale agriculture. If we lose the Tobacco Trust Fund, we will lose opportunities to continue to innovate and lead the nation.

Those who want to see more North Carolina foods on grocery-store shelves and farmers’ market tables should urge our state representatives and senators to carry on the wise tradition of investing our tobacco-settlement funds in our agricultural future through the Tobacco Trust Fund.

By Roland McReynolds, executive director of the Carolina Farm Stewardship Association.

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