1. Future of the Cooperative Daniel Green

2. History of the Cooperative Burley Tobacco Growers Cooperative U.S. was primary producer of burley Great instability, uncertainty in prices Few buyers –Low prices –Producers unable to cover expenses

3. Contract arrangement for 5 years for at least 75% production 1921, Burley Cooperative formed –124 warehouses purchased or leased for receiving centers –contracted and purchased re-drying plants (14) –built storage facilities Original System Burley Tobacco Growers Cooperative

4. Very successful, handling 940 million pounds over 5 years Problems –no limit on production/sales –problems with contract breaching Contract ended in 1926, membership was 108,000, but interest faded, prices were better No new contracts were signed Original System Burley Tobacco Growers Cooperative

5. Over 60 years, very successful program Stable price, unstable supplies Cooperative borrows money from CCC and pays farmer Tobacco is processed and sold and loan is repaid Minimal cost to taxpayers 1938 AAA System Burley Tobacco Growers Cooperative

6. Problem Burley Tobacco Growers Cooperative GROWERS and QUOTA OWNERS

7. Impact of the Buyout on Numbers Burley Tobacco Growers Cooperative What can be accomplished for tobacco in the post-buyout environment? Those Out Growers Left

8. Areas of Priority Burley Tobacco Growers Cooperative Management of Inventory Grower Organization and Advocacy Export Promotion and Market Expansion Contracting Support Alternative Marketing Options Production Technologies and Infrastructure Improvement Communication, Education and Research Support Enhanced Crop Insurance

9. BTGCA responsible for a portion of 160 million pounds of pool inventory after buyout Goal: Maximize benefit from stocks while minimizing negative impact on the market. No more than 20% domestic each year Focus on non-traditional markets Management of Inventory Burley Tobacco Growers Cooperative

10. Better organization of growers is essential with smaller numbers –Locating existing burley growers, obtaining email addresses, etc. –Redistricting our board representatives based on where tobacco is being produced –Effective system for alerting tobacco growers and to get involved in issues Grower Organization and Advocacy Burley Tobacco Growers Cooperative

11. The political environment and society will become increasingly malevolent/restrictive towards tobacco New restrictions and possible FDA oversight Keeping any potential production regulations under USDA, trade, health issues, labor issues, disaster assistance, federal crop insurance, etc. Grower Organization and Advocacy Burley Tobacco Growers Cooperative

12. Great opportunities exist for burley with post-buyout prices Using current inventories to develop new markets Serving as an agent for U.S. growers Export Promotion and Expansion Burley Tobacco Growers Cooperative

13. Toll-free contract number for info –Help with general information about contracts –Locations of contract stations –Contract prices & terms –Legal assistance Contracting Support Burley Tobacco Growers Cooperative

14. Tobacco that is not contracted Tobacco not accepted by contractor for various reasons Alternative Marketing Options Burley Tobacco Growers Cooperative

15. “Clearinghouse” type market –Tobacco not sold on contract –Damaged tobacco –Overproduction and undesirable stalk positions? Alternative Marketing Options Burley Tobacco Growers Cooperative

16. Alternative contracts –Replenishing supply of inventory –Adding value to the market –Specific varieties/characteristics –Other uses – ethanol, pharmaceutical, etc.?? Alternative Marketing Options Burley Tobacco Growers Cooperative

17. Investing $3.5 million in infrastructure improvement program Improving competitiveness in new market environment Sustaining identity as world’s premier producer of quality burley Retaining global leadership position in tobacco production Technology and Infrastructure Burley Tobacco Growers Cooperative

18. Helping get information to producers –Meetings, media, phone, internet, mail, etc. Support for expansion and increased efficiency in tobacco production Support for new research and technology development Communication, Education & Research Burley Tobacco Growers Cooperative

19. Weather risk management products for tobacco? –Enhancing opportunities by insuring quality Enhanced Risk Protection Burley Tobacco Growers Cooperative

20. Services must provide value to membership and contribute something new Tobacco Summit – October 8-9, Savannah, GA Summary Burley Tobacco Growers Cooperative

21. http://www.burleytobacco.com