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Sunday, September 21, 2003

Transitioning


Tobacco buyout: $13 billion

The days of farm supports for tobacco growers look numbered, and lawmakers from Kentucky have taken the lead in trying to plow them under. Senate Republicans Mitch McConnell and Jim Bunning, with Ernie Fletcher in the House, want to rescue small farmers by ending tobacco quotas with a $13 billion buyout. Quotas were designed to boost prices and serve as government licenses to grow tobacco, but most growers agree the system no longer works. Quotas are mostly controlled now, from inheritance, by non-growers, and many farmers pay to lease them, inflating their crop prices.

Congress should end the outdated system. But neither Congress nor the tobacco belt should have any illusions about the six-year phase-out. It's several packs short of a full-carton buyout. Growers could still grow tobacco; they just would be freed of quotas, which put them at a disadvantage against cheap imported tobacco. Buyouts would buy time for them to find other sources of income, but as Sen. McConnell says: The handwriting is on the wall in capital letters. About 44,000 of the 90,000 surviving U.S. tobacco farms are in Kentucky.

The new system would limit tobacco acreage, limit tobacco production to traditional tobacco counties and offer $500 million in economic development grants for communities dependent on tobacco. The bill is backed by every senator from the six leading tobacco states, including Elizabeth Dole of North Carolina, Bill Frist of Tennessee and Evan Bayh of Indiana. The $13 billion would be raised by assessing tobacco companies and importers. Most, as you would expect, oppose the deal. McConnell says it will require legislative heavy lifting in non-tobacco states.

One cube of sugar to help the medicine go down is a Senate companion bill authorizing the Food and Drug Administration to regulate tobacco. When the FDA tried that on its own in 1996, the Supreme Court ruled the agency overreached its authority. Senate sponsors include Mike DeWine of Ohio.

The quick fix for quotas would be to kill them and leave quota-holders empty-handed. But that would devastate thousands of families and tobacco-belt communities. Congress should help them transition fast to more diversified economies.




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