tobacco buyout - William Stephens, 2/11/01 7:34PM
I would commend this commission on it's effort to help the tobacco farming
communities, but let's first identify a couple of problems with a so called
buyout. Remember the days of the McCain bill, the Robb act and the Lugar bill
when it called for $8 a pound for quota holders and $4 a pound for farmers.
Nobody seemed to notice that a cap of $80000 a year was on that bill and if you
owned the quota and farmed it you were not able to collect both halves as we now
have under t-lap and phase II payments. I can name a whole lot of farmers who
lost more than than through equipment devaluation after all the quota cuts.
People have to understand that a quota buyout will not necessarily help farmers
that much as the quota and land are mostly owned by people who do not farm. Most
farmers own little land and most of their holdings are in equipment. A buyout
using excise taxes will cause the companies to withdraw their Phase II money
(even though it is woefully inadequate due to our quota losses and their so
called "volume adjustments") which half of which goes to farmers. I
personally do not think that congress will give 15-18 billion dollars to buy out
quota and then keep a program for farmers. I think fair and equitable would be
$8 for the quota holder and $8 for the farmers. Do completely away with the
program. Then the companies can set the price with the world market and can give
the allotment to whoever they want and in whatever part of the state they want.
What they are trying to achieve is to get things the way they want without
paying for it. Sounds like big business doesn't it? Buying out the
allotment will probably end up with farmers left in limbo without an equal
buyout for the farmer. I mean we now have a budget surplus of astronomical
proportions and the U.S. collects about $16 billion a year in taxes on
cigarettes. Surely a buyout of $24 billion is affordable. It is just hard to
believe that the state of Maryland can buy their farmers out because there are
no quota owners in the Maryland tobacco system.