News & Observer | newsobserver.com | Buyout central to tobacco vote

Published: Apr 19, 2004 12:30 AM
Modified: Oct 23, 2005 03:10 PM

Buyout central to tobacco vote

Farmers watch Senate candidates

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CHARLOTTE -- The financial survival of 8,000 tobacco farmers in North Carolina rests with the prospect of a federal buyout of their government allotted quotas. The political future of the state's next senator may hinge on who those farmers believe can win that buyout.

And in the wary eyes of many farmers, each candidate -- Democrat Erskine Bowles and Republican Richard Burr -- arrives with suspect credentials.

Bowles ran the White House under Bill Clinton, whose administration tried to regulate and, later, sued cigarette makers.

Burr is perceived as being in lockstep with R.J. Reynolds Tobacco Co., which is headquartered in Burr's district and recently announced a 48 percent cut in how much tobacco it would buy from contract farmers this year.

The buyout would give farmers cash in exchange for them giving up a guaranteed share of the market and price protection awarded through the quota system.

Without a buyout, the farmers face an estimated 30 percent cut in the quota -- the amount they can raise, as set by the federal government.

Bowles is backing a buyout plan co-sponsored by Sen. Elizabeth Dole, R-N.C., who beat Bowles in the 2002 election. Dole appears to have enough votes to pass the bill in the Senate, but its prospects in the U.S. House of Representatives are grim.

Burr, a Republican congressman from Winston-Salem, said his party won't let a Dole-style bill proceed because it also gives the Food and Drug Administration authority to regulate tobacco. Burr has opposed FDA authority in the past, but said he would accept it to get a buyout.

"If we judge individuals on their involvement in trying to get a buyout," Burr said, "I will put my record up against Erskine Bowles' record when he was in the White House any day of the week."

The federal government sets quotas, which originated in the late 1930s, to stabilize tobacco prices. Each year, federal agriculture officials determine how much tobacco will be raised and sold in the United States that year. The figure is based on how much leaf U.S. cigarette manufacturers plan to use and how much is expected to be exported.

Farmers must own a quota or rent it from an owner to avoid marketing penalties, and the number of pounds for each quota holder fluctuates depending on what the national quota is. The quota has steadily dropped in recent years, driven down by cheaper imports from countries such as Brazil and China and by the domestic costs of the legal settlement with cigarette manufacturers, according to Larry Wooten, president of the N.C. Farm Bureau.

Proponents argue that a buyout would end the quota system, reducing the cost of domestic tobacco and making U.S. farmers more competitive with imports.

The money from the buyout would come from cigarette makers under Dole's plan.

A buyout would also save jobs in the communities that depend on tobacco farmers, said Tommy Dalrymple, 42, who farms 70 acres of tobacco in Lee County.

"The [candidate] that can get the buyout," Dalrymple said, "won't have to worry about the farmers' vote."

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