Buyout: Better Late Than Never

Source from:  Henderson (NC) Dispatch 10/13/2004

It isn't quite a done-deal - that will require the signature of President George W. Bush - but a lot of North Carolina farmers are breathing easier this morning. A tobacco buyout has finally passed both houses of Congress. The $10.1 billion buyout of leaf quota was part of a $136 billion corporate tax package that eased through the Senate Monday, 69-17. It already cleared the House, and now is headed to Bush's desk and ceremonial ink pen. A Depression-era program, the tobacco quota that was intended to serve farmers as a price support, instead let them down in the long run. Critics said it kept domestic tobacco prices artificially high, and U.S. cigarette makers turned to foreign leaf. The amount of tobacco that could be produced under quota fell by nearly 60 percent in the last seven years, and seemed destined to drop again next year. The buyout is particularly welcome in our state. With about 76,000 tobacco farmers and quota-holders, North Carolina should receive the largest share of the $10.1 billion buyout. This could be great news for struggling rural economies like those in Vance and Warren counties, where it is hoped that producers can not only pay off the debts on their farms and equipment, but perhaps reinvest their buyout bucks in retooling their farms to produce other crops. The only bad news is that the buyout took so long in coming, and farmers who were driven out of business a couple of years ago are out of luck. Leaf producers who quit farming tobacco prior to 2002 will get nothing. "It didn't have to wind up this way," said Jimmy Lee, a Johnston County quota holder. "It would have been a lot better if we had gotten it three or four years ago." Still, a late buyout is better than none, and there had to be some farmers and tobacco-state legislators who'd begun to doubt whether they'd ever see such quota relief at all. Enditem