The U.S. Senate has approved a $12 billion tobacco buyout bill that grants the Food and Drug Administration authority to regulate tobacco products. Observers pointed out that the tobacco buyout was still a long way from a done deal. The Senate tobacco buyout bill, which passed 78-15 as part of a $37 billion corporate tax package, would make payments of $8 to quota holders and $4 to growers based on 2002 quota.

The U.S. House had earlier passed a $9.6 billion tobacco buyout that would make payments of $7 to quota holders and $3 to growers. It did not include FDA regulation.

Senators in Washington said they hoped to work out a compromise between the two bills during the August adjournment for the Democratic and Republican conventions. The Republican-led conference committee would be under pressure to work out a deal before adjourning for the campaign’s final month.

Some Republican conservatives objected to the price tag. Sen. Saxby Chambliss, R-Ga., warned that granting FDA regulation would put “the government on the farm.”

Experts say that tobacco buyout legislation is as close as it’s ever been to passage because tobacco farmers and the health community have been cooperating for several years.

e-mail: cyancy@primediabusiness.com