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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.