Monday, August 14, 2000

Funds don't change farmers

Growers not moving away from tobacco

By Mark R. Chellgren
The Associated Press

        FRANKFORT — By the end of this year, Kentucky tobacco farmers will have received about $485 million for doing approximately nothing.

        Between money from the federal government for “dis aster” losses and settlements with the tobacco companies, the checks will have arrived without a single farmer ever having to hoe a single row, cut a single leaf or hang a single stick. The total is nearly what might be expected to be paid for this year's real crop.

        It's almost like welfare for the tobacco growing industry and — like welfare — sooner or later, someone is liable to start asking whether the payments are really being used by the recipients to become productive citizens.

        According to the Farm Service Agency, there are 122,071 farms with tobacco quotas this crop year. Of that total, an estimated 63,570 of them lease their entire quota to someone else to grow. More than a third of the entire basic quota this year will be leased to real growers by the owners of the quotas.

        Yet there are a number of so-called tobacco farmers who don't grow any tobacco at all. For them, the payments are free money. They got the quota with the property they own. They invest nothing more, plant nothing, harvest nothing. Yet under the terms of the payment programs, they got essentially a third of the money. The remainder was divided among the owners of the property where the tobacco was grown and the actual growers.

        There were no strings at tached. There are no incentives to use the money for anything in particular. While the stated objectives may have included helping farmers diversify and wean themselves off tobacco, nothing said the money had to be used to improve or expand a cattle herd, build ponds for aquaculture, plant orchards or anything else. And there is little evidence that it has been done.

        Another pot of money, the state's share of a separate settlement with tobacco companies, is supposed to help move farming in new directions in Kentucky. But a chunk of that money is also reserved to make direct payments to the tobacco community if the first pot falls short.

        If some in the General Assembly had had their way, even more of the state tobacco fund would have gone to individual payments, providing some small short-term relief and nothing for the future. There are 15 members on the board who will decide how to spend the money, but few of them are tobacco farmers either.

        The cynical might argue that the payments were politically motivated as much as anything else. About $114 million was from the so-called phase two settlement with cigarette manufacturers for lost sales of tobacco. The rest was from a congressional appropriation that Republican Sen. Mitch McConnell modestly said, “I delivered” during a speech at the Fancy Farm picnic last week.

        The number of farmers in tobacco is declining, but not nearly as fast as the crop. The Farm Service Agency reported 124,571 farms in 1998 with an average quota of 4,299 pounds. By 2000, there were 122,071 farms, but with an average quota of 1,706 pounds.

        There will still be a market for Kentucky burley for many years to come. And there are those who make virtually their entire living leasing, growing and selling tobacco. Those people, though, are not getting a fair share of the settlement and disaster payments in relation to the risk to their future livelihoods.


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