The president of the North Carolina Farm Bureau is calling on cigarette makers to work out differences over a tobacco buyout bill.
Last year's push to pass tobacco buyout legislation fell short due to differences over Food and Drug Administration regulation of cigarettes. Philip Morris, the nation's largest cigarette manufacturer, supports a buyout linked to FDA regulation. Other tobacco companies, including R.J. Reynolds, oppose FDA regulation. Reynolds mounted a campaign against a buyout last year.
“I urge cigarette manufacturers to work closely together to remove the impediments that prevented buyout legislation from being achieved in 2003,” says Larry Wooten, president of the North Carolina Farm Bureau Federation.
Wooten said North Carolina tobacco farmers are in a “dire predicament.”
The facts are hard to ignore, he says. Flue-cured growers have seen more than 50 percent of their quota cut since the late 1990s.
“We cannot continue to ignore the facts and hope that everything will be okay,” Wooten says. “Tobacco's crisis is North Carolina's problem.”
Flue-cured farmers go into 2004 with yet another cut in quota. The announcement of a 10.45 percent cut in quota for 2004 came in December. A 22 percent cut had been expected based on the numbers. Only a last-minute intervention by the Flue-Cured Tobacco Cooperative Stabilization Corporation prevented the full effect of the cut.
“It's crisis time on the farm,” Wooten says. “North Carolina's rural economy is seeing millions of dollars in tobacco income disappear overseas — primarily to Brazil. It is out of control, and it hurts family farms, rural communities and North Carolina's economic recovery. The only realistic answer to this crisis is a complete buyout of the existing program.”
Tobacco sources say talks have been under way to move tobacco legislation forward in 2004. In 2003, the cornerstone of the legislation was $8 for quota owners and $4 for growers. In 2004, $5 for quota owners and $2 for growers has been mentioned.
Growers were optimistic at the beginning of last year, working through differences at the state level to emerge with a consensus to get a tobacco buyout passed through Congress.
Several bills were introduced or re-introduced in Congress last year.
The sticking point came with disagreements about FDA regulation of cigarettes. Cigarette makers would be assessed a fee based on their market share to pay for the buyout. Reynolds says FDA regulation would lock in Philip Morris' market share. Before its announced merger with B&W Tobacco Corp., Reynolds said the assessment would be more than its profits.
Tobacco-state senators tried to move the bill through an omnibus appropriation bill. Last-minute efforts led by U.S. Sen. Elizabeth Dole, R-N.C., to include a $7.2 billion plan into a spending bill, fell short.
In the U.S. House, members who represent tobacco states reached consensus on a tobacco buyout bill, forging a compromise from several bills. The $15.7 billion bill had $8 and $4 as its cornerstone. FDA regulation of cigarettes was dropped from the bill. While they said FDA regulation was key to passage of a tobacco buyout, legislators tried to link it to a separate bill.
A move to push FDA-less legislation met with stiff opposition.
A spokesman for the Campaign for Tobacco Free Kids believes there's a better than ever chance for the buyout to pass this year.