US Tobacco Buyout Boosts US Cigarette Firms-Critic

Source from:  WASHINGTON, (Reuters) 06/07/2004

U.S. tobacco growers would be short-changed by a $9.6 billion buy-out plan that also would fail to protect public health, an anti-smoking group said on Friday. The buy-out, proposed as part of a House bill, would compensate growers for a repeal of the long-standing U.S. tobacco program, which now guarantees a minimum price for burley and flue-cured tobacco, the two major varieties. Leaders of the House Ways and Means Committee slated a work session on the overall bill on June 10. "Congress should reject" the buyout in favor of separate legislation that links a more generous buyout with regulation by the Food and Drug Administration of tobacco, said the Campaign for Tobacco-Free Kids. A bill to do that was pending in the House and Senate. The cigarette industry has a different view. "We remain convinced that the best way to assure passage of a buy-out this year is to retain the linkage with the compromise FDA legislation that now is active in both chambers," said Mark Berlind, legislative counsel for Altria Group Inc. (MO), the parent of cigarette maker Philip Morris. "Whether or not the (Ways and Means) bill will turn out to be the most appropriate legislation to achieve this remains to be seen," Berlind said. Under the buy-out proposed on Friday and sponsored by Tennessee Republican William Jenkins, growers would be paid $7 per pound of tobacco grown in 2002, a comparatively good year for growers. Payments would be made from 2005-2009. Tobacco quotas have shriveled since the mid-1990s. Georgia, Kentucky, North Carolina, South Carolina, Tennessee and Virginia are the leading tobacco states. U.S. tobacco production last year totaled 831.2 million pounds, down sharply from 878.6 million pounds in 2002. The Campaign for Tobacco-Free Kids said the buy-out would hurt growers by giving them less money than other buy-out proposals and pay for it with tobacco excise tax collections while averting expansion in public health standards on tobacco. For the past couple of years, anti-smoking advocates have argued the only way to pass a tobacco bill in Congress was to marry a buy-out, popular in the House, with FDA regulation, the demand of influential senators. An aide to Jenkins said attaching the buy-out to a House tax bill "is a new and different strategy. The Senate is its own body. We'll see what they come up with," he said. Enditem