North Carolina: Tobacco Buyout Progress Inspires Caution

Source from:  Jason Spencer Staff Writer  06/25/2004

Farmers here say they don't want to pop the corks too soon over a $9.6 billion tobacco buyout that the U.S. House of Representatives approved last week. But their interest is piqued. "It's give us some hope," Carlton Alphin, a 43-year-old grower in Lenoir County, said. "It's not finalized yet by no means, but we've got to do something." After years of talk, an end to government price supports for tobacco successfully made it through the House. It's part of the Jobs Creation Act, a much larger measure that would rewrite the nation's corporate tax code. [img border=0 hspace="4" vspace="4" align="left" src=http://www.tobaccochina.com/english/picture/062404_buyout.jpg] U.S. Rep. Walter Jones, R-N.C., was among the "yes" votes. The bill, based on 2002 tobacco quotas, could infuse nearly $128 million into Lenoir County's economy. That's about $25.5 million annually for five years. Political negotiating has scaled the proposed buyout back during the last several months. At one point, Lenoir County expected as much as $320 million from the deal. But the current offering isn't chump change. "The farmers are going to be happy, I'll tell you that," Jimmy Hill, whose family owns Tull Hill Farms, said. "The alternative is an absolute disaster. This buyout is just a matter of survival for many people. A reduced payment is much better than no payment." Quota-holders would receive $10 a pound if a buyout is approved, or $7 a pound if they rent to another grower. In that case, the farmer would get $3 a pound. Some versions of the proposal include the federal Food and Drug Administration's regulation of tobacco products. The House version of the bill does not. The U.S. Senate is next. If the bill survives, a conference between the two bodies will iron out the differences. U.S. Sens. Elizabeth Dole, R-N.C., and John Edwards, D-N.C., have their work cut out for them, Hill said. Many senators have said they will support a buyout only if it's tied to FDA regulation, Hill said. Health advocates, too, probably only would support a buyout with that provision. The latest proposal allows farmers to continue receiving payments from the state's tobacco settlement, Hill said. Past versions of the bill have not. Alphin said he probably won't give up tobacco farming if a buyout is approved, because it's still a good cash crop here. But, a buyout remains top priority, he said. "Everybody's cautious right now, real cautious," Bill Elmore, executive director of the USDA's local Farm Service Agency, said. "They don't know if it's going to go through. It's not a cooked deal yet. They don't want to count on anything yet." Enditem