Tobacco Farmers Get Victory

Source from:  By LAWRENCE M. O'ROURKE AND CRAIG JARVIS, Staff Writers 07/19/2004

$12 billion buyout passes as part of compromise bill The Senate on Thursday approved legislation granting the Food and Drug Administration authority to regulate tobacco products and authorizing a six-year tobacco quota buyout. Republican conservatives criticized the bill as a $12 billion giveaway to owners of tobacco quotas, but supporters said it could be the salvation of the industry. About 40 percent of the money would go to North Carolina. The Senate voted 78-15 for the compromise joining the FDA regulation to a buyout. The provision was included in a wide-ranging $37 billion corporate tax package that many business interests say is needed to deal with international trade disputes and promote energy production. Forty-three Democrats and 35 Republicans voted for the deal. Voting no were 14 Republicans and one independent. Sen. Elizabeth Dole, a Salisbury Republican, voted for the bill. Sen. John Edwards, a Raleigh Democrat who was campaigning in Louisiana for vice president, did not vote. The House earlier passed a $9.6 billion quota buyout that does not include FDA regulation. In Washington, senators said they hope to reach a compromise between the two bills during the August adjournment for the Democratic and Republican conventions. The Republican-controlled Senate-House conference would be under pressure to produce a deal that both chambers would approve before adjournment for the campaign's final month. Those closest to the issue in North Carolina said on Thursday that congressional action has been a long time coming. "We've worked tirelessly to get to this point," said Graham A. Boyd, executive vice president of the Tobacco Growers Association of North Carolina, which represents 10,000 farmers. "But it's a long ways from complete. A lot of things could still derail the process." Issues to be worked out in conference include who would pay for the buyout -- tobacco companies or the government through excise taxes -- and the extent of FDA regulation. Under the quota program, the federal government controls the amount of tobacco grown by allowing farmers a certain percentage of the national crop. Quotas have become a commodity that can be bought and sold. Since 1997, the government has cut the quota by more than half. Blake Brown, an N.C. State University agricultural economist, has forecast quota cuts of at least 30 percent going into 2005. Roger Dupree of Angier in Harnett County, about 25 miles south of Raleigh, has struggled to keep about 250 acres of tobacco that has been in his family since 1919. "The system was fine at one time," Dupree said Thursday. "Now, it needs changing. We got to be able to compete with a world market. ... We've got to be able to grow tobacco cheaper. If we don't, well, you're out of business." Boyd said the state's tobacco farmers don't object to FDA regulation because that is a manufacturer's issue. "If that's what it takes to achieve a buyout, so be it," Boyd said. 'Huge benefit' for N.C. Lynette Tolson, North Carolina director of advocacy for the American Heart Association, said the buyout is closer to resolution because farmers and public health groups have cooperated for several years. "North Carolina has a huge benefit here," Tolson said. "We get a good portion of the tobacco buyout money, and public health has become a No. 1 priority." Philip Morris is the only tobacco company to say it would support FDA control of its products because it is large enough to handle additional regulations. The FDA under the Clinton administration tried to regulate tobacco, but the U.S. Supreme Court ruled that only Congress can grant that authority. The difficulty of getting the buyout enacted was illustrated by tough objections from conservative Republican senators. "This is a crummy way to legislate," said Sen. Don Nickles, R-Okla., the budget committee chairman. "This makes 500 people millionaires," Nickles said. "It makes a few people multimillionaires." Sen. Trent Lott, R-Miss., expressed hope that the buyout provision could be stripped from the legislation before final passage. Two tobacco state Republicans normally allied with Nickles and Lott played a role in brokering the deal with Sen. Edward Kennedy, D-Mass., and Mike DeWine, R-Ohio. Dole said that unless Congress acts this year, thousands of tobacco farmers across the South, including many in North Carolina, face the loss of their farms. Not only would tobacco farmers lose their livelihoods, but thousands of small merchants who service the industry would be driven out of business, Dole said. About 60 percent of North Carolina tobacco farmers would leave the business if the buyout goes through, Dole said, noting that revenue from the quota is a "substantial portion" of their income. "Status quo is simply not an option," she said. Many farmers are "barely hanging on." Sen. Mitch McConnell, a Kentucky Republican, played a key role in working out the deal, according to senators. He said the buyout would "end the tobacco price support-program." Concerns over FDA Sen. Saxby Chambliss, R-Ga., warned that that granting regulatory authority to the FDA would put "the government on the farm." The agency could demand and publish information about the ingredients in a tobacco product and could check on the soil, fertilizer and other aspects of the growing process, senators said. DeWine and Kennedy made clear that their objective was to use the FDA to discourage young people up to age 19 or 20 from taking up the tobacco habit. DeWine said the tobacco industry continues to encourage smoking through advertising and other promotions, despite the industry's promise as part of the tobacco settlement to discourage tobacco use. If the FDA regulated tobacco, it could take stronger action to prevent sales of cigarettes and chewing tobacco to minors, DeWine said. Kurt Ribisl, an assistant professor at the UNC-Chapel Hill School of Public Health, said Thursday that health groups' push for tobacco control, farmers' desperation to get out of the program and politicians' willingness to compromise have taken buyout legislation farther than it has ever gone. "We have strange bedfellows now," he said. Enditem