Tobacco Growers Appeal for Protection

Tobacco growers Thursday urged Congress not to let their financial stability be ruined by the proposed tobacco settlement, which could reduce farm income by lowering cigarette consumption and demand for tobacco leaf.

“I was born to a tobacco farmer. I do not like being condemned because I was not born to a rice farmer or a wheat grower,” Rod Kuegel of Owensboro, Ky., told the Senate Agriculture Committee.

Growers appeared before the panel the day after President Clinton declared that economic protection for tobacco farmers and their communities was missing from the $368.5-billion tobacco deal, and must be part of comprehensive legislation to reduce teen smoking.

Tobacco farmers are “good, hard-working, tax-paying citizens and they have not caused this problem,” Clinton said in calling on Congress to improve on the accord negotiated between tobacco companies, state attorneys general and private anti-tobacco lawyers.

On Thursday, Vice President Al Gore said the White House will meet with congressional leaders in early October to discuss legislation that would implement the tobacco deal with the changes sought by Clinton.

Although Clinton wasn’t specific, help for farmers would come from multibillion-dollar annual payments by tobacco companies under the deal. “We cannot let them, their families, or their communities just be crippled or broken by this,” Clinton said.

In testimony before the Senate panel Thursday, Bob Jenkins, president of the North Carolina Farm Bureau, said tobacco growers “deserve to share equitably in any proceeds distributed as a result of a settlement.”

Proposals ranging from government buyouts of some of the nation’s 124,000 tobacco growers to a requirement that cigarette makers use more American-grown leaf have been floated since the settlement was announced in June.

Sen. Richard Lugar (R-Ind.), chairman of the Agriculture Committee, supports buyouts and using some of the settlement funds to help rural communities recover from any economic losses. In return, government would gradually end the tobacco program that props up profits by controlling supplies and price.

“If this does not occur, the public will become increasingly uncomfortable with government policies that subsidize tobacco production while at the same time warning people not to smoke,” Lugar said.

But two economists testified that prices would fluctuate wildly without the tobacco support program, triggering a price drop of up to 25% for farmers, which could lead many to abandon their farms and ruin some rural areas.

“The most vulnerable areas would likely be the Appalachian regions of eastern Kentucky, eastern Tennessee and western North Carolina,” said Will Snell, agricultural economist at the University of Kentucky.

Another economist, Bruce Gardner of the University of Maryland, estimated that government buyouts of tobacco farmers could cost $500 million a year over 10 years.

In delivering his long-awaited verdict on the tobacco deal announced June 20, Clinton acknowledged that growers would find it painful to switch from their lucrative crop to something that pays far less.

“You know, tobacco has a very high return per acre, and so it’s not a simple thing,” the president said. “You can’t just say to a tobacco farmer, ‘Go plant soybeans,’ even if the soil will hold them.”

On average, a farmer can net up to $2,200 per acre by growing tobacco, compared with $120 an acre for corn and $600 for tomatoes.

Of several changes sought by Clinton in the tobacco deal, protection for farmers was the only one that cigarette makers greeted with approval.

In a statement critical of Clinton’s demands, tobacco companies said: “We agree with the president that special consideration should be provided to tobacco growers. . . . We stand ready to work with the growers and the House and Senate to resolve these issues.”