We believe American tobacco is among the highest quality in the world. Because our premium brands require high-quality tobacco, we work to build strong relationships with America’s tobacco growers through our Tobacco Farmer Partnering Program (TFPP).
American tobacco is the backbone of the cigarettes Philip Morris USA makes. A stable supply of U.S. tobacco is important to us because every Marlboro cigarette we sell is made predominantly of American tobacco.
As a major purchaser of American tobacco, we need sufficient amounts of the right qualities and grades to make our high-quality products. In light of sweeping changes in U.S. tobacco production and the U.S. cigarette market in recent years, development of a long-term stable supply of American tobacco is critical to our business.
Nearly all of our domestic tobacco is now purchased through the TFPP. This is how the TFPP program works today:
- We work with receiving station operators throughout the U.S. tobacco-growing regions. These are typically independent business owners. We develop the contracts and together with receiving station operators we talk with growers to explain the details of the TFPP offer and programs.
- We then enter into standard agreements and price schedules with growers. By entering into this agreement, a grower offers to deliver a specific number of pounds of tobacco. We weigh and inspect the tobacco when it arrives at the receiving station, test for moisture and assign it a grade.
- We are able to see every bale of tobacco purchased and have the opportunity to talk and share ideas about how to maximize the quality and value of the tobacco a farmer delivers. Growers receive immediate payment at the station for tobacco that we accept.
Given the amount of change our industry has faced, we believe the TFPP offers a number of benefits for tobacco growers:
- Predictability. Growers know the buyer of their contracted tobacco even before planting season.
- Fairness. We strive to provide a fair and equitable offer. Growers benefit from competitive pricing; same day, on-site payment; and they can deliver their crop promptly, without the need for warehouse storage and fees.
- Communication. Through localized grower councils, regular grower meetings and newsletters, we take opportunities to share information with and to learn from growers.
- Innovation. We actively support programs to advance U.S. tobacco production by working collaboratively with agricultural experts at land-grant universities and independent farmers in order to share insights and offer support to help growers manage risk and improve quality and production.
- Scholarships. We offer educational scholarships that honor the families of TFPP growers and their importance to our business. Since the scholarship program began in 2000, PM USA has awarded about $2 million in scholarships to recognize the accomplishments of dependents of our tobacco farmers.
