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 Leaders Program.
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.
Nearly all of our domestic tobacco is purchased through our direct contracting program known as the Tobacco Leaders Program (TLP).
The TLP relationship begins with our Grower Representatives, who work directly with growers on behalf of the company. They live and work in the growing communities and are responsible for contacting and visiting PM USA TLP growers. They represent PM USA's business requirements and expectations, including those on responsibility; receive and respond to grower questions and gain feedback and insights.
We believe the TLP offers a number of benefits for tobacco growers:
- Fairness. We aim to provide a fair and equitable offer. Growers benefit from competitive pricing; same day payment; and prompt crop delivery.
- Communication. Through local grower councils, regular grower meetings and newsletters, we share information with and learn from growers. Growers provide valuable input that helps us define and improve our programs.
- Innovation. We actively support programs to advance U.S. tobacco production by working collaboratively with agricultural experts at land-grant universities and independent farmers. By doing so we can share insights and help growers manage risk and improve quality and production.
- Scholarships. We offer educational scholarships that help the families of TLP growers and honor their importance to our business. Since the scholarship program began in 2000, PM USA has awarded more than $2 million in scholarships.
Ongoing communication with growers through the TLP helps PM USA understand the challenges growers face and advance solutions that make sense both for growers and our business.
- Promoting environmental sustainability. PM USA developed a Good Agriculture Practices (GAP) program to help growers use sustainable production practices that promote the growth of quality tobacco, while managing the impact of tobacco production on the environment. Through the GAP program, PM USA engages growers on key agricultural issues ranging from the use of crop protection agents to maintaining good labor records and worker safety.
- Assistance with mechanization. Labor costs are a key input for Burley tobacco growers, so PM USA has co-developed market preparation equipment to help reduce labor costs associated with growing Burley tobacco.
- Planning for the future of tobacco growing. A new PM USA program called Taking Root has been created to invest in developing leaders and innovators among the next generation of growers. In 2009, PM USA launched this pilot program to engage a select group of next generation growers and give them the opportunity to participate in leadership development programs, receive a grant to support innovation in their farming operation and learn more about our business. The program is designed to strengthen PM USA's supply base by encouraging quality and innovation.
The TLP: An Evolution
For more than 70 years, U.S. tobacco was brought to market through an auction system.
In 2000, we launched a new direct contracting program called the Tobacco Farmer Partnering Program with burley tobacco farmers in the United States. This program changed long-standing traditions in the way tobacco was sold in this country. In the first year, we entered into agreements with burley farmers. We expanded the direct contracting program to flue-cured tobacco in 2001.
In 2009, Philip Morris USA unveiled a new program called the Tobacco Leaders Program. The program is targeted toward select producers to encourage consistent high quality, innovation, efficiency and open communications between the company and growers. Annually, select growers within the program are recognized for their performance against specific criteria.
