Tobacco farms in the United States are often very small and family owned.  Most tobacco is produced in the Southeast.  65% of American tobacco farms are found in North Carolina (home of Duke University!) and Kentucky.  The process from farm to factory is as follows:
 
 

• Tobacco farmers bring their crop to warehouses where the tobacco leaves are weighed and stacked in piles.
• Government Graders then inspect the tobacco leaves and set minimum prices that the farmers can receive.
• Tobacco companies then come into the warehouses and the tobacco is auctioned off.  Companies have the choice of either bidding over the prices set by the government graders or they can refuse to pay the price, in which case government co-ops buy the tobacco.
• The warehouse then pays the tobacco farmer for the tobacco he brought and the tobacco companies or government co-ops pay the warehouse for the tobacco.  This ensures that the farmers will get paid for their crop either by the tobacco companies or by the government.
• Government co-ops hold the tobacco until the market improves for it.  When market conditions improve, the government sells the tobacco to the companies for the current minimum price.  The procedes from the sales then go towards repaying the loans to the farmers plus interest.