Contract farming now turns over a new leaf.

• Position: Industry Trend or Event - Brief Article

When the ground warms up, Richard Renegar, 42, will be in his Iredell County fields planting tobacco. But this year will bring a dramatic change in the way he and an increasing number of other tobacco farmers do business. It's called contract farming, and before long, it could extend corporate dominance over tobacco as it did -- not always to applause -- over North Carolina's vegetable, poultry and pork industries during the past four decades.

Executives of the nation's four largest tobacco manufacturers, including Winston-Salem-based R.J. Reynolds Tobacco Co., are pressing farmers to sign contracts. Some farmers say they've been threatened that if they don't sign now, they won't get deals later.

And some are fighting back. A February lawsuit in U.S. District Court in Greensboro contends the four companies conspired to set auction prices and are attempting to kill the auction system by direct contracting. Attorneys want the suit declared a class action to represent all farmers. Tobacco-company officials deny the allegations, including one that farmers were told they wouldn't be offered contracts if they joined the lawsuit.

Renegar grows 75 acres of flue-cured tobacco. He has contracts for some but wonders if he's doing the right thing. "The bright point is, you know what you'll get if it meets the grading requirement," he says. Typically, flue-cured tobacco sells for $1.25 to $1.90 per pound, depending on quality. But he also knows that contracts cap earnings. If a storm...