Crucial Time for Tobacco Buyout

Source from:  By CHARLIE RICHARDS, Daily Dispatch Writer 06/14/2004

A Congressman already recognized as a champion of the North Carolina tobacco farmer and a candidate for the U.S. Senate who promised to be such a champion brought encouraging reports on the prospect of a tobacco quota buyout proposal here Friday. Rep. Bob Etheridge of the Second District, and Erskine Bowles, a leading candidate for the Democratic nomination for the Senate, addressed the annual meeting of the Flue-Cured Tobacco Cooperative Stabilization Corporation. Growers from the five-state flue-cured area, mostly from North Carolina, said they were encouraged by prospects in Washington, which have changed dramatically in the past few weeks. The possibility of a buyout is greater now than it has been anytime during the past two years, said Sam Crews of Oxford, president of the N.C. Tobacco Growers Association. But both Etheridge, reporting on the legislative process that will determine the outcome, and Bowles, giving his analysis of the political possibilites, stressed there are many battles still to be fought and no guarantee the outcome will be favorable to tobacco growers. Both emphasized the critical role that will be played by President Bush. Etheridge, a leader on the issue for years who is described as the only tobacco farmer in Congress, said the legislation being proposed is not what he would have written, but "we ride the horse we have." He said, "I will vote for this piece of legislation." A quota buyout provision is being attached to controversial legislation related to foreigh trade, apparently to get support from tobacco state Congressmen. It will be considered by the House Ways and Means Committee next week, and Etheridge predicted a vote next week. The provision provides $7 per pound for quota owners and $3 for growers, less that Etheridge's earlier bill had provided. It applies only to growers still in the business this year, eliminates all price supports and has no other safety provisions for present growers. The new proposal comes at a time when federal and tobacco agencies are predicting another major quota cut next year, following a cut of more than 10 percent this year and continuing a trend that has cut the amount of U.S. tobacco marketed by half in recent years. The House provision also does not provide for Food and Drug Administration regulation of tobacco, a condition considered to be necessary to get passage in the Senate. At one point, Bowles said "we have to end the political games," and he included Republican Sen. Elizabeth Dole among those deserving thanks. But both he and Etheridge explained how important to the issue is the fact that this is a political year. Etheridge listed Democratic presidential candidate Sen. John Kerry among those who deserve credit for the revival of changes for the buyout. It was his support, in contract to a negative view from President Bush, that highlighted the issue, Etheridge said. Bowles commended the growers for making it clear "the anti-buyout position of the President just wouldn't fly." And he predicted that if the buyout makes it through Congress, the President will not veto it. One reason would be the political heat, he said. "Politics are in our favor." Bowles, who at least one grower noted did not stress farmer interests in his previous candidacy for the Senate, said if he were in Washington he would "have buyout blinders on" and watch that bill "until I saw the President sign it into law." If the issue should still be on the table next year, he said, "I'll be your champion." That assumes, of course, that he would defeat his likely Republican opponent, U.S. Rep. Richard Burr of Winston-Salem, also a proponent the buyout. Bowles' remarks were interrupted by applause from the tobacco growers and their associates in the audience at the State Fairgrounds. The Stabilizaton Corpora-tion's meeting included remarks from Britt Cobb, the commissioner of agriculture appointed to succeed the resigned Meg Scott Phipps. Cobb listed the buyout as one of two top issues of concern, the other being loss of farm land to development. John Truluck, director of the tobacco division of the U.S. Department of Agriculture, said his agency will provide the administratiion and regulation necessary to implement any bill that Congress might pass. He said a buyout might "salvage an industry in decline." Co-op production of products might help The annual report of the Flue-Cured Tobacco Cooperative Stabilization Corporation, distributed here at its annual meeting, explains the planned move into marketing of tobacco products that came to light this week with its purchase of a tobacco factory near Roxboro. And at least some growers see that as a possible helpful move. The report by President Bruce Flye and General Manager Lioniel Edwards stated flatly that "we must promote and sell our own products if we want to continue producing tobacco." Contending growers can no longer rely on established domestic manufacturers or exporters, the leaders said "we also cannot stand idly by and watch a new segment of small upstart cigarette manufacturers that use little or no U.S. flue-cured tobacco ..." Such conditions led the corporation to explore becoming a full service marketing cooperative, which it related to marketers of products such as butter, orange juice and almonds. The leaders said they hope to begin processing tobacco this year at the factory at Timberlake purchased from Vector Tobacco. That facility can produce strips, cut rag, puffed stems and cigarettes under one roof, and the corporation said it "plans to market all of these products to customers worldwide." With world markets and even domestic manufacturers using more tobacco from such places as Brazil and Zimbabwe, the growers organization's move to production is similar to its move into auction warehouses when companies started bying from growers under contract. When contract purchases began to undermine the warehouse auction system, the corporation opened 14 marketing centers of its own. Last year, about 60 percent of the tobacco sold at auction was sold at those centers, the other 40 percent at independent warehouses still operating. Most of the tobacco produced was sold by contract, however. One manager of a corporation marketing center is Sam Crews, whose family runs a warehouse in Oxford. About the organization's move into making its own tobacco products, Crews suggested it would be good to move stocks of leaf from storage, purchased under the price control system managed by the corporation. Crews and growers chatting with him said that with foreign competion and the prospect of another major quota cut, the rural economy is being hurt. They and their cooperative must consider any alternative, they said. Enditem