Empty Promises in Tobacco Buyout

Source from:  The Virginian-Pilot, July 25, 2004 07/29/2004

For the last 70 years, Congress fattened tobacco growers with a monopoly that kept prices up and competitors out. Now that low-cost global competition has shrunk the market for American leaf, Congress is cooking up a delicious severance package for the growers. With all the death and illness blamed on smoking, tobacco growers would seem to stand last in line for public relief. Yet, the Senate wants to award them a staggering $12 billion for their slices, or so-called “quotas,” of the tobacco monopoly. But that's the undue tribute anti-tobacco advocates agreed to swallow in order to finally win Food and Drug Administration oversight of cigarettes. It's far too much money for far too little protection. Sen. Edward Kennedy exaggerated wildly when he praised the new regulations as “the most important step we can take for public health short of curing cancer.” The momentous protections Kennedy hailed permit the FDA to control only what's on the outside of the cigarette package, not the inside. It can't tamper with the noxious formulas or even reduce their toxic content. As for keeping cigarettes out of reach of teenagers, the only thing the FDA could do is to control the location of vending machines. The House version is even worse. It awards tobacco growers a taxpayer-supported $9 billion bailout and gets nothing back in return. For all the shortcomings of the Senate bill, it at least avoids the insult to the taxpayer of the House plan. The Senate would make cigarette makers pay for the buyout, a levy expected to pass through to smokers at about 6 cents per pack. Virginia's two Republican senators supported the handouts as did the two GOP congressmen from Hampton Roads, Randy Forbes and Ed Schrock. Democrat Bobby Scott voted no. The Republicans reasoned that the money would help Virginia's 8,400 tobacco farmers better compete and shore up Southside economies ravaged by global trade. But it's doubtful how much help actually will get to the small farmers who need it the most. An examination of the House plan by the Environmental Working Group, a public interest watchdog, found that two of every three dollars would be paid to just 1 in 10 quota holders. It said that taxpayers will shell out at least $1 million each to 462 individuals, companies or estates. “The vast majority — the 354,000 in the bottom 80 percent of the buyout plan — will receive just over $1,000 per year over 5 years,” its investigation found. Tobacco giant Philip Morris, the only big tobacco manufacturer backing the bill, won't get a check from the treasury. So, what is its incentive? When the advertising restrictions in the Senate bill are combined with the Richmond manufacturer's marketing muscle, it will be much harder for competitors to Philip Morris to get their message out. Tobacco auctions may have become a relic of the past in the farm belt. But in Washington, tobacco interests are as slick as ever in squeezing out the highest bid.