Tobacco Auctions Losing Ground

Bobby Williams is one of the first farmers to get his tobacco on the auction floor. With the market opening next week, things are pretty slow. He's also one of the few that still uses the market instead of contracting with corporate buyers from the tobacco companies.

"When you contract, you have no insurance," he says. "If you carry tobacco in that they don't like, the only recourse you have is carry it home."

Last year, Georgia farmers sold only a third of their crop at auction as companies offered higher rates for contract. But some, like auction owner Bob Brannen of Brannen's Warehouse, worry the contracts could create a monopoly.

"Basically only one company can afford to contract," Brannen says. "They're the only ones who can use every stage of tobacco."

And if the auction system is eliminated, the companies would be dictators over everyone from the farmers to the consumer.

Brannen says companies are sacrificing millions in higher prices now to get everyone under contract. Williams says he'll sacrifice a few extra pennies per pound to keep the security of a fair place to sell. Brannen's Warehouse is one of only four remaining auction sites, where Georgia boasted more than a dozen just three years ago. Last year, South Georgia farmers sold roughly 80 million pounds of tobacco for more than $150 million.

Reported by: Dal Cannady