Bishop for Congress

Moultrie Observer

House OKs Tobacco Buyout

by Lori Glenn

http://www.moultrieobserver.com/articles/2004/06/18/news/news01.txt

MOULTRIE -- A lucky strike for tobacco growers: The U.S. House of Representatives passed a $9.6 billion buyout Thursday.

After years of having their hopes burn out time and time again in stagnant proposals, tobacco state legislators are jubilant to finally bring home some good news. Although growers choked by foreign competition can't breathe a collective sigh of relief until the Senate passes the measure, the passage is a victory for tobacco states and may help President Bush's reelection campaign, which is already challenged with bumper stickers of "No buyout, no Bush."

The bill, known as the American Jobs Creation Act of 2004 (HR 4520) contains a provision that, if enacted, will provide economic relief for farmers at the same time eliminating the Depression-era quota system in favor of a free market for American tobacco. The bill passed 251 to 178.

An estimated 400,000 tobacco quota holders would receive a share of the five-year, phased buyout, based on their "allotments," which dictate how much they can grow each year, the Associated Press reported. Owners who farm using their own allotments would get $10 per pound of quota; $7 per pound would got to those who rent it to someone else to farm. In that case, the renting farmer would get $3 per pound.

One of Colquitt County's largest tobacco growers, Ray Saunders, said he was thrilled at the chance of shedding the golden handcuffs.

"I hope it works. We have to have some help one way or another," he said.

Saunders, who contracts with Philip Morris, thinks Colquitt County will continue to grow as much tobacco as it does currently, but some growers will certainly seize the opportunity to abandon leaf production.

"A buyout will give them a chance to get out from under the pressure," he said.

If this buyout becomes law, it would mean nearly $550 million for Georgia's economy, which would be an economic shot in the arm for farm families in Southwest Georgia, many of whom have seen their farms devalued by as much as 60 percent in recent years, said Rep. Sanford Bishop, D-Albany,

"Additionally, such a buyout would answer many tobacco critics by effectively removing the federal government from the business of supplementing its growth. While the American Jobs Creation Act is a far-from-perfect bill in its entirety, I was proud to support a measure that creates a win-win situation for so many of my constituents," Bishop said.

Bishop, who co-sponsored a couple of stand-alone bills, would have preferred that the tobacco buyout would have had the momentum to pass on its own, but is satisfied to piggyback on the tax bill.

"My priority first and foremost is the family farms and tobacco quota holders in Southwest Georgia. In order to serve their interests, we had to find a vehicle and that happened to be the vehicle that was available. It is, perhaps, the only vehicle that would be available this year, and we had to take advantage of that opportunity," he said.

Rep. Jack Kingston, R-Savannah, who co-sponsored tobacco buyout legislation with Bishop, said, the buyout would finally end an "antiquated, Depression-era government program that has been robbing our farmers of their assets."

"It provides our farmers with the opportunity to compete in a free and open market without unnecessary government constraints. This buyout is similar in structure to the past peanut buyout and will give our rural communities a healthy way to resolve the tobacco dilemma," he said.

"I realize we are living in tight-budget times, but this is something that will boost the job market, revitalize communities and allow our local industries to be competitive in world markets," he said. "The potential economic impact is enormous. It can create over 21,000 new jobs and approximately $14 billion in economic activity. ... Over the past five years, the tobacco industry has been unfairly damaged by the federal government. Our farmers ought to be compensated for this asset that has been taken away against their will."

Many Democrats criticized the bill as a political ploy designed to win Southern support for a larger measure that would rewrite the nation's corporate tax code, an Associated Press article said.

"This bill has nothing to do with taxes and nothing to do with international sanctions against the U.S.," House Ways and Means Committee's top Democrat, Charles Rangel of New York said. "It has everything to do with trying to pick up votes."

Another Democrat, Jeff Flake of Arizona, tried to remove the buyout from the package on the floor, but his amendment was ruled out of order, AP said.

"In the midst of a war, a deficit and a delicate economic recovery, now is the worst time to spend nearly $10 billion to bail out the tobacco industry," Flake said.

In addition to the tobacco buyout, HR 4520, a $155 billion package introduced by Chairman Bill Thomas in the House Ways and Means Committee, repeals a tax break for U.S. exporting companies that has been ruled illegal by the World Trade Organization and includes a wide array of tax cuts for businesses, including the Reforestation Tax Act for timber owners.