Va. Farmers Prefer Senate Tobacco Buyout Plan Over House Version

Source from:  BY JOHN REID BLACKWELL TIMES-DISPATCH STAFF WRITER  07/21/2004

Growers say proposal passed by senators would help them more The tobacco buyout plan approved by the Senate Thursday would benefit farmers more than the version passed by the House in June, leaders of several farm groups said yesterday. Farmers said they were surprised and pleased with the Senate's 78-15 vote in favor of a $12 billion buyout, which would pay farmers to end the federal government's tobacco price-support program. "I've been getting a lot of calls," said Andrew Shepherd, a Lunenburg County farmer who serves on the board of directors of the farmer's cooperative that administers the program. "The farmers are so tickled that this thing has finally been debated and is out on the table. I have tried to caution them that this is not a done deal." The differences in the two proposals have to be worked out in a conference committee. The House passed a $9.6 billion buyout plan on June 17, but opponents have since attacked the proposal as a "bailout" and a "rip-off" of taxpayers because it would pay for the buyout with a portion of the federal excise tax on cigarettes. The Senate plan would make the industry pay for the buyout. The Senate legislation would give the Food and Drug Administration authority over tobacco products. The House bill would not. Both bills would pay farmers, and others who own tobacco allotments, or quota, to give up their right to produce the crop. Under the Senate plan, active growers would get $4 per pound for their allotments, while quota owners would get $8 per pound. The House plan would pay $7 per pound to quota owners and $3 per pound to active producers. Farmers said yesterday that the payout would be about the same, because the House plan would preserve payments farmers are already receiving from a $5 billion trust fund set up by cigarette companies in 1998. The Senate plan would apply those payments to the buyout. "Either way, it is tremendously encouraging," said Buddy Mayhew, a Pittsylvania County farmer and chairman of Concerned Friends for Tobacco, a grower-advocacy group. "If we can get something through conference committee and back through the House and Senate, and get the White House to sign it, we will have what we've been looking for for so long." Both bills would end government controls that have propped up prices for U.S. tobacco. However, Shepherd said the Senate version maintains a control that would be beneficial to Virginia farmers: It would restrict post-buyout tobacco production to areas where the crop has traditionally been grown. "At least to Virginia, it would be more advantageous to have [the Senate] bill," Shepherd said. "If you went to a totally free market, I'm afraid you would see tobacco [production] move south and even farther west." Enditem