A. The Commission was created to address two problems, both of which require action

The difficulties facing many U.S. tobacco farmers and their communities caused by the reduced demand for U.S. flue-cured and burley tobacco that has led to dramatic drops in quota and emerging changes in the tobacco market that could threaten the tobacco family farmer’s way of life;

The harm to health and economic costs caused by tobacco and the continued large numbers of children using tobacco, a problem that faces the entire nation but burdens tobacco growing states disproportionately because of their smoking rates

B. The Commission is in part the result of several years of work between tobacco farmers and the public health community that has demonstrated that they have many concerns in common and share an interest in addressing the problems facing tobacco farmers and the public health in ways that promote both goals at the same time. This report builds on those areas of agreement and shared values. The Commission was also created because of the possibility that the problems facing tobacco farmers today may reflect long term trends not susceptible to quick fixes and stem from many causes and not just reduced domestic consumption due to health concerns.

C. The Commission recognizes the important role the tobacco price support program has played over the years in bringing stability to the economic well being of the tobacco farmer and preserving the well being of the small family farmer.

D. The goal of this Commission report is to identify those steps that should be taken to assist U.S. tobacco farmers and their communities and promote the public health.

 

1. Level of Demand for U.S. flue-cured and burley

	amounts sold annually totally and for domestic use and export;
	U.S. share of global flue-cured and burley production and sales;
	annual flue-cured and burley quotas.

2. Consumption of Manufactured Cigarettes Products

	U.S. cigarettes consumption trends
	Worldwide demand for cigarettes. Production and manufacturing are not decreasing on a global scale.

3. U.S. demand for U.S. leaf for domestic cigarette consumption

	e.g., amounts sold/used annually for cigarettes made and consumed in U.S.;
	percentage of U.S. leaf in American-made cigarettes or in such cigarettes sold in U.S.; annual cigarette consumption in U.S.;
	Breakdown on where the tobacco dollar goes as between farmers, manufacturers, etc.
	Changes in US cigarette prices and the reasons for these increases.

4. Demand for U.S. leaf for exported cigarettes

	e.g., amounts sold/used annually for cigarettes exported from U.S.;
	percentage of U.S. leaf in exported American-made cigarettes;
	U.S. exports share of all U.S. brands and american-blend cigarettes sold overseas;
	U.S. imports of flue-cured and burley;
	Overseas manufacturing by U.S. companies or of U.S. brands.

5. Foreign demand for U.S. flue-cured and burley

	e.g., amounts of US tobacco leaf used in cigarettes manufactured overseas by U.S. cigarette companies, by BAT, or in Japan Tobacco's RJR brands; foreign production of flue-cured and burley (total and just American-quality);
	Foreign exports of American-quality flue-cured and burley (total and American-quality);
	Amount of foreign grown tobacco available to compete with high-quality flue-cured and burley used in american-style cigarettes;
	foreign prices for burley and flue-cured (total and American-quality);

6. Profitability of U.S. tobacco farming

	e.g., flue-cured and burley prices over time;
	costs of production; quota-leasing costs (and number of farms with leased versus owned quota);
	new costs facing tobacco farmers, i.e. baling, barn redesign to reduce nitrosamine levels, grading tobacco. [State-specific data where possible.]

7. Character of U.S. tobacco farming

	e.g., trends re number of: tobacco farms;
	big versus small farms;
	full-time vs. part-time tobacco farmers;
	minority tobacco farmers;
	average age of U.S. tobacco farmers;
	reliance on alternative crops or non-tobacco income;
	number of non-farming quota holders. [State-specific date where possible. Some of this information could be placed in section IV, instead, as appropriate.]

The accompanying narrative should discuss these facts and trends and their causes, and explain their relationship to the overall demand for U.S. tobacco leaf and to the economic and health problems facing tobacco farmers, communities, and states – short term and long term.

 

Harms Caused By Smoking and Other Tobacco Use And Their Impact On Tobacco States and Tobacco-Farming Communities

1. Discuss scientific knowledge about harms and costs caused by smoking and other tobacco use.
2. Impact of smoking and other tobacco use on tobacco states and tobacco-farming communities

e.g., state-specific cigarette sales; adult prevalence; youth prevalence; spit-tobacco use by adults and youth; annual deaths from tobacco use; projections of future daily smokers and tobacco-caused deaths among current children; healthcare costs from tobacco use; comparisons with non-tobacco-state averages or national data.

3. The section should discuss the relative impact of changes in tobacco consumption due to health on the overall problems facing tobacco farmers. It should also discuss emerging international tobacco prevention efforts and their likely impact on worldwide consumption trends.

 

Significance of Tobacco Farming to the National, Tobacco-State, and Tobacco-Farming Community Economies

	Jobs,
	income,
	percent of farm income,
	etc., and related trends

 

Role of Tobacco Program

Describe the role of the tobacco program over time and today, focusing both on the economic issues and the role of the program in preserving family farms

	Impact of price protection
	Impact of quantity controls
	History and Impact of leasing
	Impact of Auction system
	Impact on quality issues
	Potential Impact of contracting.

 

What is likely to Happen if No Changes are made or new Assistance Provided?

	Discuss possibility that previously presented farming and public health trends will continue and the impact of farmers and their communities if this happens.
	Potential Impact on the continued viability of the price support program
	Potential impact if the tobacco support program is ended by vote: On farmers Their communities Non-growing leaseholders On Demand for US tobacco

 

Options Considered by the Commission to Assist Farmers and Their Communities

1. Which farmers and communities are most likely to need assistance

 

2. Transitional assistance and supplementary income

1. Buy Out Options for farmers
2. Buy Out options for non-growing quota holders – to reduce costs to farmers and to eliminate the role of non-grower quota holders
3. Initiatives to Enhance Tobacco Farmers' non-tobacco or Supplementary Income Opportunities. Address market barriers to alternative crops
4. Promotion of In-State Grown Commodities - consider the concept of state hospitals, schools, prisons, etc being given incentives to buy state grown farm products.
5. Tax incentives for attempting non-tobacco alternatives on their farms or for different uses of tobacco.

3. Enhancing the economies of those counties most heavily dependent on tobacco.

1. Economic development and redevelopment options for counties that are heavily dependent on tobacco

 

4. Assistance to continuing tobacco farmers

1. Options for promotion of U.S. leaf (without increasing U.S. or foreign tobacco consumption). For example,

	development of bioengineered tobacco for medical purposes
	make sure foreign grown tobacco is required to use same standards as American-grown leaf;
	Look for ways to raise the quality of American tobacco to make American more desirable in competition with non-American tobacco;
	new markets (China);
	domestic content labeling;

2. Keeping but reforming tobacco price support program.

Ways to Reduce Tobacco Use That Are Consistent With Efforts To Assist U.S. Tobacco Farmers And Reduce Their Economic Problems

 

1. Provide FDA with authority over manufactured tobacco products and their marketing along the lines proposed by Senators Frist and McCain in 1998. This could even enhance the competitive position of the American tobacco farmer.
2. Maintaining the Tobacco Support Program to ensure that U.S. tobacco production does not expand to new areas, states, or farmers, and to help keep U.S. leaf prices higher -- thereby protecting current farmers from new competition or ruinous price declines.
3. Consider funding the buy-out or other farming, transitional, or public-health assistance for U.S. tobacco farmers and their communities through a tobacco excise tax increase or an increase on excess tobacco-manufacturer profits. This could provide an adequate stream of revenue and reduce consumption of manufactured products, particularly among children.

 

Conclusion: Principles to Guide Future Deliberations and Specific Recommendations