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Excerpt from Oral History Interview with Horace Kornegay, January 11, 1989. Interview C-0165. Southern Oral History Program Collection (#4007) See Entire Interview >>

Tobacco support program

Kornegay describes how he and B. Everett Jordan worked in the interest of North Carolina industries, particularly tobacco, textiles, and furniture, while they were in Congress during the 1960s. Here, Kornegay focuses on the tobacco support program. During the 1960s, Kornegay and Jordan determined that a poundage system, rather than the acreage system that had been in place since the late 1930s, would be more conducive to productivity for North Carolina tobacco farmers.

Citing this Excerpt

Oral History Interview with Horace Kornegay, January 11, 1989. Interview C-0165. Southern Oral History Program Collection (#4007) in the Southern Oral History Program Collection, Southern Historical Collection, Wilson Library, University of North Carolina at Chapel Hill.

Full Text of the Excerpt

During all those years in Congress Everett Jordan and I worked very closely together. Not only on legislative matters that were important to N. C., matters that involved the tobacco industry; the textile industry, the furniture industry - it seems that back in those days there was more to do about textiles than there was about tobacco, believe it or not, because the biggest, and about the only legislative involvement with tobacco in those days was the farm program itself - the support program.
BEN BULLA:
Horace, can you go into a little more detail about the support program?
HORACE KORNEGAY:
Oh yes.
BEN BULLA:
I was talking to D. K. Muse and he was saying that Dr. Henry Jordan was involved in an original idea about the farm support program - the allotment of acerage - and that Everett Jordan got into the act then and carried it from there.
HORACE KORNEGAY:
I remember Dr. Henry very well, but I have no knowledge of his early involvement. The tobacco support program actually started in the early 30's, then something happened to it - I'm not sure - but in '39 it was reinstated and that's the first important date in the tobacco support program. It's been in existence every sinde 1939. Now the program basically does this: The farmer agrees to limit his production of tobacco in exchange for a guaranteed minimum price for the tobacco when it's sold on the warehouse floor. Now my first recollection of this involvement with Everett Jordan on tobacco, other than just general talk about the importance of it to N. C., was in the mid '60's when it became clear to a number of us that there had to be some changes in the program. Prior to the mid 60's the limitation of production was based on acerage. In other words the Dept. of Agriculture would give a farmer, based upon the history of a particular farm, the acerage he could grow. How much tobacco had been grown on that farm in the previous three years, and it was related to acres. With the advance of agricultural technology, improved ferterlizers, herbesides, MH-30, sucker control, tobacco worm control and all of that. We started developing and growing. 2000 pounds on an acre of land that ten years before may not have produced but a thousand pounds. So what we were doing we were selling it by the pound and producing it by the acre, and with the advent of this technology there was no relationship - not a very accurate relationship. So I remember so well that Everett and I, and others, started really pushing the modification of the program to go to a poundage system. There is still acerage involved, but to limit the production based on the pounds that a farmer produced, not just on the acerage he had been assigned. He's still assigned a certain number of acres that he has to comply with even today, but the pounds is what he has to deal with when he goes to the warehouse. He can only sell a certain number of pounds. This improved the program considerably, because what we were doing we were building up expensive stocks in the stabilization program which is set up some quasi governemnt agency, and they buy the tobacco that the commercial buyers don't buy and if a pound of tobacco, for example, doesn't bring a penny a pound more than the support price, if a buyer for one of the tobacco companies doesn't offer that much for it, it goes into the state tobacco pool, and the farmer is paid by the Stabilization Corporation, which is an arm of the Commodity Credit Corporation, which is the big area in the Dept. of Ag. that funds and supplies the money for the several, the many in fact - government support programs. Tobacco, corn, wheat, feed grains, cotton and all those things, and it changes from time to time. Basically that's the way it works. Too much tobacco was being taken in by the stabilization board; more tobacco was being produced than needed. But Everett was one of the leaders in that, and I remember when he and I would go to farm meetings and meetings of tobacco growers around the state and particularly this district and urge the farmers to recognize that this needed to be done. And Everett was very effective in that sort of thing. He'd call on me and I'd echo what he had to say, so I believe it was about '65 that bill was passed and it's been the law since then. That is controlling production - authorizing the farmer to sell by the pound instead of selling all he could grow on an acre.
BEN BULLA:
Horace, the excess pounds he grew, over and above the allotment, he had to sell on the market at what the market would bring?
HORACE KORNEGAY:
No. All of his tobacco is sold, he can't sell in excess of his allotment. Now he can carry it over to the next year - 10% can be carried over. For example, if I have a farm out here and I'm authorized to market 5,000 pounds and I product 5500 pounds, I can sell the 5,000 this year, carry the 500 over and sell it next year. You can sell over, and it may be that if you sold only 90% last year of your allotment, then you could sell 110% the following year. There's that leeway because it's not like packing sugar where you can weight it all out and get it to the right amount. The farmer puts a lot of work and a good bit of money into the production of a crop, and to require him to market it down - or to grown it down to the pound would be sort of un-realistic. But Everett was that way. He had an understanding of human nature; he had an understanding of business; he had a deep dedication, in my view, of the welfare of the farmers, whether they be tobacco farmers or other farmers. But it seemed like that tobacco was always the thing, because of it's tremendous importance in this state - the number one cash crop. Then you had the manufacturing element here, and I think it's still true that N. C. produces and Manufacturers more cigaretts than any other state in the Union.
BEN BULLA:
The farmers produce more too?
HORACE KORNEGAY:
Oh yes. We are by far the biggest producer of flu-cured tobacco. We produce about as much as all the other flu-cured producing states in the country do - N. C. does.