A. Opening Remarks

The meeting was opened by Solomon Whitfield, Designated Federal Official and Acting Director, Tobacco and Peanuts Division, USDA. Mr. Whitfield turned the meeting over to Matthew Myers and Rod Kuegel, Co-Chairs for opening remarks.

B. Minutes

The minutes from the February 21, 2001, meeting were reviewed and unanimously approved by the Commission. The Commission directed that the minutes be posted to the Commission’s website.

C. Review of Public Comments on the Preliminary Report

Doug Richardson gave a summary of comments received on the Preliminary Report between February 21 and March 20, 2001. There were 1,063 hits on the website and a total of 17 comments were received on the Report during this period. The following is a summary of the comments:

Buyout - At least 7 favored.

Free and Fair Trade - 1 comment-stated that under current legislation tobacco farmers are penalized with no access to commodity export promotion programs.

Quality and Competitiveness - 1 comment-there is a need for a structured forum to discuss quality and competitiveness issues. Commission has ignored-excluded buying side.

Against Higher Tobacco Excise Taxes - 1 comment against.

Retain Tobacco Program - 1 comment favored.

FDA Regulations - 2 comments favored meaningful comprehensive regulation of tobacco products and 1 favored a total ban on use of tobacco products. 5 comments against-should not support additional bureaucratic oversight of tobacco.

Creation of Alternatives to Tobacco Income Sources and Community Diversification - 2 favored. At least 3 were skeptical of alternative income possibilities and 1 stated that the Commission did not specify long term sustainable alternatives to tobacco in its preliminary report.

New Technologies - 3 favored further improvement in safety of tobacco products through new technologies. 1 of the 3 suggested a shift to safer smokeless tobacco products.

Recognition that Smokeless Tobacco Industry is Different from the Cigarette Industry - 1 comment - "dark" tobaccos are different from burley and flue-cured.

Actions Already Taken Downplayed - 1 comment stated that considerable action has already been taken to help growers, ex. $5.15 billion trust fund, and to place restrictions on the tobacco industry, ex. Bans on advertising, use of cartoon characters and tobacco brand name merchandise.

Commission Recommendations Exceed its Authority - 1 comment suggested Executive Order does not give Commission authority to make health recommendations apart from proposals to help tobacco growers.

Public Cost of Implementing Public Health Recommendations on Farmers - 1 comment says implementation of health recommendations would be highly detrimental to farmers economic opportunities.

Other - 2 wanted information on February 21 meeting and 1 stated tobacco contains niacin and this is the reason teens start smoking.

Overall Comment on Preliminary Report - Most had some positive statements. Some even pledged total support to the Report’s content.

D. Presentation by Tom Capehart, Economic Research Service

Mr. Capehart was asked at the February 21, 2001, meeting to assemble information on cost and related data for implementing the Tobacco Equity Reduction Program, "TERP". He presented a general summary of the tobacco grower sub-committee’s recommendations and cost estimates of TERP. The estimated cost of TERP was based on information obtained from the 1997 census report and basic and effective tobacco quota reports from USDA.

In calculating the estimated increase in federal exercise taxes required for TERP, two different scenario’s were used. In the first, the quota pounds to be paid on would be the 1997 quota which would result in approximately 30 cents per pack over 3 or 4 years. The second scenario, the quota pounds to be paid on were the 2001 quota pounds, with a pay out period over 5 years, which would result in 15 to 20 cents per pack.

During the presentation, he presented additional information which included the ages of tobacco growers for various states. For a complete copy of the power point presentation presented by Mr. Capehart click here.

E. Presentations and Discussion of Reports from Growers and Economic Development Sub-Committees

The presentations and recommendations presented to the Commission are summarized below. See attachments B and C for a complete copy of the respective sub-committees’ recommendations presented at the March 20 meeting.

Tobacco Program - In Rod Kuegel’s presentation to the Commission at the February 21, 2001, meeting from the tobacco grower’s sub-committee, the Commission requested that the sub-committee revisit their recommendations for revisions based on public input and discussions. At the March 20, 2001, meeting, Mr. Kuegel provided the Commission with a revised report from the sub-committee. Click here for the complete report.

Economic Development - Jesse White gave a presentation from the economic development sub-committee on creating a regional Center for Tobacco Dependent Communities through direct Congressional charter and appropriation to actively assist communities transitioning from tobacco-based economies.

During the presentation, he outlined how the Center would be established, its purpose, objectives and funding, and how the board of directors would be appointed. Click here for Attachment C for a copy of the presentation.

F. Discussion of Issues to be Addressed in the Final Report

The Commission discussed the sub-committees’ recommendations and comments received from the public. Upon completion of the discussion the Commission made a decision that they would hold a planning meeting on April 6, 2001, to finalize plans for the Final Report.

G. Decisions on Final Report

The Commission made a determination to publish the Final Report on May 14 and to hold two public briefings to inform the public of the findings and recommendations as set out in the Report.

H. Adjournment

The meeting was adjourned by Solomon Whitfield at 6:00 P.M.

J. Approval