Growers Say Tobacco Manufacturing Jobs 'Under Siege'

Source from:  The Charlotte Observer 03/30/2009

Tobacco manufacturing jobs, which pay more than twice the average salary of private industry in the state, are "under siege" by tax increases and other government proposals, growers and their advocates told lawmakers Thursday. "The last thing North Carolina, or any state, needs right now is more lost jobs," state Agriculture Commissioner Steve Troxler said in written remarks to a House agriculture subcommittee. The North Carolina tobacco crop was worth $686 million last year, and the industry pumped $24 billion into the state's economy with more than 10,000 jobs. Farmers and tobacco academics from large producing states testified on Capitol Hill before a House agriculture subcommittee about the possible ripple effects that regulating tobacco would have on local farms. They are hoping to build opposition to legislation, which appears to have the support of a majority of both houses in Congress, that would give the Food and Drug Administration oversight over tobacco. The farmers are backing an alternative bill, co-sponsored in the House by Rep. Mike McIntyre, a Democrat from Lumberton who chaired Thursday's hearing, and in the Senate by Republican Richard Burr and Democrat Kay Hagan of North Carolina. It would set up a separate agency in the Department of Health and Human Services to handle the regulation, and according to McIntyre, is more explicit about keeping regulators off of farms. "The last thing we want is for government bureaucrats to be coming on the farm," McIntyre said. A. Blake Brown, an agricultural economist at N.C. State University, said tobacco companies have already lowered orders from farmers this year, anticipating a decline in demand since Congress increased the federal tax by 61 cents per pack to pay for a children's health insurance plan. Brown said the price increase is likely to translate into a 6 percent reduction in smoking and a 2 to 3 percent cut in product demand from farms. Efforts at "harm reduction" -- reducing the amount of tobacco in each cigarette and shifting demand toward smokeless products -- would further lower demand for the types of tobacco grown on North Carolina farms, he added. Gov. Beverly Perdue has proposed a $1 per pack increase to pay for budget shortfalls, and other states also are considering increases. J.T. "Tommy" Bunn, president of the U.S. Tobacco Cooperative in Raleigh, said growers were lured away from tobacco last year because of unusually high prices of other commodities, but those profit margins are thinning, and some farmers want tobacco contracts again this year. Opponents of smoking, who didn't testify at the hearing, said cutting tobacco use will save money. Enditem