Tobacco buyout gains momentum

The smoke signals coming from backroom meetings point to support mounting for a tobacco buyout in Congress. In fact, now is the time for a tobacco quota buyout, U.S. Sen. Elizabeth Dole, R-N.C., told a group of tobacco growers in Raleigh, N.C.

At the 21st annual Tobacco Growers Association of North Carolina, Dole said rounding up support outside the tobacco states is the priority. “The time to act is now, in this Congress,” a comment that brought some 1,000 tobacco farmers to their feet. “People are more worried about Saddam Hussein than a tobacco buyout, but, yes, we can do both. This is the time to do the tobacco quota buyout.” The Helms/Dole plan played a prominent role in her campaign for the U.S. Senate.

Industry experts agree that 2003 is the year for a buyout to happen — if it is to happen. Some say the Senate could pass a buyout as early as June.

“This is the first time I've witnessed active engagement to move forward on a tobacco quota buyout,” says David Rouzer, who was chief ag aide to recently retired U.S. Sen. Jesse Helms. “(U.S. Sen. Mitch) McConnell, R-Ky., Dole and other tobacco state members are making a concerted effort to reach across the aisle and to other members to move a tobacco quota buyout forward.” Rouzer, who helped write the Dole-Helms tobacco buyout legislation, is now at North Carolina State University.

Quota cuts in four of the last five years — the latest a 9.5 percent gash — have tobacco farmers hurting economically. Cheap cigarettes, which use imported tobacco, are also hurting U.S. tobacco growers. A tobacco program begun in the 1930s has become a “hindrance” to farmers in 2003. “With the recession and low commodity prices, North Carolina suffers disproportionately from the decline in quota,” Dole says. In 2003, flue-cured and burley producers will grow their smallest crop in history.

One sticking point to a quota buyout, however, could be support among major cigarette manufacturers for Food and Drug Administration authority over tobacco. At the meeting, TGANC President Richard Renegar called on cigarette manufacturers to “resolve the FDA log jam and move forward. Until they agree, our future remains unpredictable.”

The issue will be decided in the next 18 months, Renegar says.

“Guessing makes us depressed. Predicting makes us nervous,” Renegar says.

Philip Morris, the nation's largest cigarette manufacturer, supports FDA regulation of tobacco. Other companies such as R.J. Reynolds are against FDA regulation. Dole and other lawmakers from tobacco states do not support Food and Drug Administration authority over tobacco. Dole said the priority at hand is getting support in Congress for a bill that can pass. “I'm looking forward to getting a buyout passed.”

Renegar said the only way to pay for a buyout is through “cost deferment. We will self-finance this buyout. This is better than foreclosure.”

U.S. Reps. Richard Burr and Mike McIntyre, both of North Carolina, shared the stage with Dole, and echoed their support for a tobacco buyout in this session of Congress.

U.S. Rep. Burr said a buyout would “bring some predictability to the tobacco industry again.” He has seen consensus grow in the tobacco industry over the need for a buyout. Burr was one of the first in Congress to introduce buyout legislation.

U.S. Rep. Mike McInytre refiled his tobacco buyout bill, H.R. 140, recently. The bill compensates owners $8 per pound and producers $4 per pound — a key point in all the buyout legislation to date — keeps tobacco in traditional areas and establishes a tobacco quality board. The bill doesn't include FDA regulation of tobacco. “We have to deal with the reality of numbers…we've got to have support from other parts of the country. It's so important to work together.”

Last year, Meg Scott Phipps, North Carolina commissioner of agriculture, found consensus among fellow tobacco-state ag commissioners on the buyout issue.

“Our only hope, our only revival is the $8 and $4 buyout,” Renegar says.

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