Tobacco Growers to Get Nearly $10 Billion

Source from:  Columbian  06/07/2004

Election-Year Politics Propel Buyout Plan Southern lawmakers relied on election-year politics and old-fashioned vote trading to secure a deal Friday that would pay tobacco farmers nearly $10 billion to give up a federal quota program that has propped up their prices. The buyout, sought for years by the growers and politicians who represent them, was included in a corporate tax bill unveiled by Rep. Bill Thomas, R-Calif., chairman of the House Ways and Means Committee. The measure would pay $9.6 billion over five years to an estimated 400,000 owners for giving up "allotments" that dictate how much they can grow each year. Thomas said his committee will act on the legislation next week and that it will likely be taken up in the full House the following week. Keith Parrish, executive director of the National Tobacco Growers Association, predicted up to half the nation's tobacco farmers will quit growing the crop upon a buyout. The government has been reducing the amount of tobacco farmers can sell in recent years due to declining cigarette sales and an increased reliance on cheaper imports. Farmers have been clamoring for a buyout for years. But Republicans' narrow control of the House and Senate and the possibility that they could lose it this fall boosted its momentum. "I think the fate of the election, at least in the South, is in large part resting on this one issue," Parrish said. President Bush in 2000 won tobacco-growing states such as Georgia, Kentucky, North Carolina, Tennessee and Virginia and is favored in them again this year. However, many GOP-leaning tobacco farmers have said recently they might vote for Democrats if Republican leaders don't deliver a buyout. Rep. Ron Lewis, R-Ky., said Friday the White House helped negotiate the final buyout agreement in the tax bill. Just last month President Bush said while campaigning in Ohio he didn't think a change to the tobacco program was needed. That sparked an outcry from tobacco farmers and lawmakers from tobacco states. Republican Rep. Richard Burr of North Carolina, who is locked in a competitive race for the Senate, said administration officials recently "communicated very clearly" a willingness to consider signing a tobacco buyout if it met several conditions. They included an end to all price and production controls and a limited cost that would not worsen federal deficits, Burr said. Past proposals had called for paying farmers between $13 billion and $18 billion. Funds for the latest proposal would come from the Treasury. But Christin Tinsworth, a spokeswoman for the Ways and Means Committee, said expiring customs fees would be extended to cover the cost. Smokers now pay a federal tax of 39 cents for each pack of 20 cigarettes. A commission appointed by former President Bill Clinton suggested raising cigarette taxes to pay for the buyout, an idea immediately rejected by the tobacco industry and tobacco state lawmakers. The House proposal also does not give the Food and Drug Administration the power to regulate cigarettes, a condition that many lawmakers have put on any buyout. Burr said the White House opposed linking the two issues. Enditem