SHELBYVILLE, Ky. — Memories hang in the air with the aroma of tobacco as Jimmy Chappell walks the creaky floor of his burley warehouse.

        He remembers opening sales days, when politicians pumped hands, merchants mingled and farmers awaited the fruits of their labor. He remembers the fish fries to celebrate the end of sales seasons.

        All that is history at Big Shelby Tobacco Warehouse, where the chant of the auctioneer has been stilled by the growing popularity of contracting, in which farmers sell leaf directly to tobacco companies.

        This fall, the burley auction season will bypass the cavernous metal structure for the first time since it opened in the 1920s.

        “It's just like a ghost,” said the 62-year-old Mr. Chappell. “It's just a big old shell sitting here with a lot of history.”

        Defenders of the auction system say its demise could deliver a deathblow to the federal tobacco program and its price supports, a system that has buttressed generations of tobacco-farm families.

        Earlier this year, only about 20 percent of flue-cured tobacco — the other type of leaf used in cigarettes — was sold at auction.

        Burley-belt farmers have designated 36 percent of their crop for sale at auction. Tobacco companies control the rest under contract in the eight-state burley belt — Kentucky, Indiana, Ohio, Missouri, West Virginia, Tennessee, Virginia and North Carolina.

        For now, burley sales are scheduled to begin next month in 53 Kentucky warehouses, down from 82 warehouses last year.

        But the situation remains precarious for many. About 15 warehouses have commitments for less than a million pounds of tobacco.

        “I think it would be awfully difficult to make money with less than 1 million pounds,” said Denny Wilson, executive director of the Burley Auction Warehouse Association.

        Two tobacco groups have asked the state to step in. The warehouse association, teaming with the Burley Tobacco Growers Cooperation Association, have requested some $10.7 million in state grants, drawn from tobacco-settlement money, to subsidize farmers who sell tobacco at auction. The two groups would put up matching amounts.

        The request is a recognition that economic factors have driven many farmers to contracting.

        By selling to companies, farmers avoid warehouse fees, which generally average about 10 cents per pound.

        The grants sought by the two tobacco groups would allow farmers to recoup their warehouse fees.

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