Tobacco Buyout Proposal Stirs Little Hope in Local Farmers

Source from:  Lebanon (KY) Enterprise By Stevie Lowery 06/28/2004

During this time last year, Joe H. Spalding had high hopes that a tobacco buyout would be passed. His hopes, like many other tobacco farmers, were crushed. So, when he heard that the U.S. House of Representatives passed a $9.6 billion tobacco buyout proposal last week, Spalding didn't get too excited. But, he admits, it's a step in the right direction. "This thing is a long way from being a done deal yet," Spalding said. "Right now, it's too early for me to be too optimistic. It's going to take a lot of luck and hard work from our senators to get this thing to happen. It's pretty much left up to the people in Washington right now." Thursday, the house passed the Fair and Equitable Tobacco Reform Act, which would end federal price supports for tobacco and pay farmers $9.6 billion over five years to stop growing their crop. An estimated 400,000 tobacco quota holders would receive a share of the buyout, based on their "allotments," which dictate how much they can grow each year. Owners who farm using their own allotments would get $10 per pound of quota or $7 per pound if they rent it to someone else to farm. In that case, the renting farmer would get $3 per pound. Spalding, who is the District 18 director for the Burley Tobacco Growers Cooperative Association, said the buyout, as it is proposed right now, would be a good deal for farmers. But he is concerned of what might happen to it now that it must go to a conference committee to be approved. "Hopefully, when it goes to the conference committee, something can get put in the proposal to keep tobacco in existing growing areas," Spalding said. "If not, you are going to be totally contracting with the tobacco companies and they can contract with farmers from Illinois, California or anywhere else. I think that's really important and hopefully that is something (Sen.) Mitch McConnell can get done for us." The proposed buyout is not linked to the federal Food and Drug Administration and would not give the FDA the power to regulate tobacco products. Spalding said farmers are sticking their heads in the sand to think that a buyout would ever be passed without a link to the FDA. "There is going to be a lot of pressure to kill this thing because it doesn't have FDA," he said. "I've always thought we would have a better chance for a buyout if it was tied to FDA. It's inevitable that the FDA is going to control cigarettes. It's going to happen one way or another." The buyout would be paid for by using 10 cents from the current 39 cents per pack federal excise tax on cigarettes and the buyout cost would be offset by other increases in revenues provided for in the bill. Opponents of the buyout legislation have said that American taxpayers will end up having to pick up the bill. Marion County Farm Service Agent Pat Spalding believes tobacco companies should contribute to the cost of the buyout. "My feeling is that the tobacco companies should step up if this is what they want and pay their proportionate share," he said. "If there is a buyout and the tobacco companies aren't willing to pay a fair price for burley tobacco then we won't be growing burley tobacco. We're at the point that when we are raising a product and not making any money, we aren't going to raise it anymore." Spalding, unlike many weary tobacco farmers, firmly believes that there will be some type of buyout in the future. Danny Buckman, a local tobacco farmer, also believes there will be a buyout. "It should have already happened," he said. "Tobacco is never going to be like it was." Enditem