The Washington herald., 1921-01-19
DEPARTMENT OF
AGRICULTURE TO
ACT ON TOBACCO
Will Make Investigations
For Establishing Ger
tain Standards.
BUYERS ADVANTAGE
In Many Cases at Present the
Farmer Is Loser
In Deal.

In order to assist in placing the
marketing OF tobacco upon a more
Dusnesslike basis, the United States
department of Agriculture is about
l" oegln Investigations which will
ieSd to the establishing of tobacco
grades applicable throughout the
entire industry. Though tobacco
ranks fourth among the crops OF
lhe United States, returns more
tnan S1,O0O,OOO, 900 q year in agri-
cultural wealth to the nation and
more than $500, 100000 in annual
revenue to the government, it is
marketed in a manner which pro-
ducers Of less ifportant crops would
regard as a short cut to financial
ruin.
For this condition, the specialists
or the Bureau Of Markets, Depart
ment Of Agriculture, blame primarily
the auction system Of sales in GER
tain sections and the private con-
tract system in other localities Un-
der the former method loose piles
OF tobacco to be sold are placed
on the floor of a warehouse and ex-
amined by the prospective buyers.
The tobacco is not graded, nor does
the owner have much opportunity
to describe the merits Of his prod
uct. The auctiOneer then offers the
tobacco for sale and the buyers are
practically in a position to obtain
the tobacco for any price they
choose to pay.
In the latter case, the tobacco
Is sold privately by growers, who
usually have an indefinite idea 0f
n hn
fully Informed. The sales frequent
ly are made on the farm and con-
frmed by contracts that are more
binding on the seller than on the
buyer. The sale often is made be-
fore the tobacco is harvested At
the time of the transaction the to-
baCCo may be so far from being in
a marketable condition that even
the buyer is unable to determine
its value, in which case the farmer
usually gets what the buyer esti-
mates to be a safe price or chooses
to offer
In bulletin published by the
Massachusetts Experiment Station II
is stated that under the contract
method of sale. the farmer has all
TO lose. with no corresponding gain;
the buyer. little or nothing" The
same statement would apply equally
'as well to the auction system. "
department specialists say.
Because of lack of grades. the
tobacco producer is unable to deter
mine il he is receiving a reasonable
price for his product. There is no
basis for comparison between the
prices paid in one community and
those paid elsewhere. Quotations
"r one market usually mean little
in other markets. for they are not
based upon recognized standards OF
quality.
In October, the Bureau of Mar
kets. United States Department OF
Agriculture. held hearings in a num-
her of cities for the purpose of dis
Cussing with tobacco growers, mer-
chants, bankers. warehousemen and
others interested in the industry.
tentative regulations for warehous-
ing tobacco under the provisions of
the United States Warehouse Act.
These hearings were attended by
members OF the trade who were rep
resentative of the tobacco industry
generally and considerable interest
was shown in the bureaus work Az
first. there was an attitude of skep-
tfcism regarding the benefits to be
derived from the warehousing of to-
bacco under the provisions of the
warehouse act. Doubt was express
ed that the bureau would be able
{ to devise satisfactory tobacco stand
ards but in every instance. before
the end of the hearing, the bureaus
intention to take immediate action
In carrying out its plans to place
the marketing of tobacco upon a
g0unH basis was aDDrOVed,
Provides for Financing.
Under the provisions of the Unit
ell States Warehouse Act, the Secre-
tary Of Agriculture is authorized
to license warehouses for the stor-
age Of cotton, grain, fax seed. wool,
and tobacco. The chief purpose Of
the act. with respect to tobacco, is
to establish a system of warehouses
In which tobacco can be safely
stored and through which the in
dustry can more easily be financed
and tobacco more advantageously
marketed. To accomplish this pur-
nose, the act is designed to provide
a form Of warehouse receipt which
will be readily acceptable and wide
" negotiable as security for loans.
Nnv warehouse that adequately pro-
tcCts the tobacco stored therein may
h, licensed. The regulations under
rhc act provide for inspection of the
premises at irregular intervals. ex-
, amfnations of the commodities stor-
cd and observance by the ware
houseman Of standards of business
practice.
Since the passage of the act. more
than 300 applications for warehouse
licenses have been received by the
PfIreau of Markets. the majority Of
them during the last year. Pro-
ducers and warehousemen now ap-
near to appreciate the benefits to be
derived from the warehouse act. The
bureaus regulations for the ware
housing of tobacco are In the hands
Of the printers and will be ready
for general distribution in the near
future. How soon tobacco grades
will be recommended will depend
uuuu the ability of the bureau to
,.rrrv on the work with the limited
funds at its command.
Note Is Negotiable.