01/21/04 — Farmers hope for a leaf buyout

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Farmers hope for a leaf buyout

By Sam Atkins
Published in News on January 21, 2004 2:03 PM

MOUNT OLIVE -- A buyout, a cut in quotas and tough competition from other countries were hot topics at the annual meeting of tobacco farmers in the area.

The future of a tobacco buyout depends on whether it will be attached to FDA regulations on tobacco products, officials said at the District 5 Flue-Cured Tobacco Cooperative Stabilization Corp. on Tuesday. Representatives from Duplin, Greene, Harnett, Onslow, Pender, Sampson and Wayne counties attended the meeting, which was held in Mount Olive College's Murphy Center.

The North Carolina Farm Bureau hopes Congress will institute a buyout program this year as disagreements between the House and Senate have prevented a buyout so far.

Brian Briggs of the bureau said there was a lot of time spent on getting it passed in 2003. There ended up being five different buyout bills in the House and one in the Senate, but none reached a vote, he said. Those bills will now be up for debate again this year, although he is not sure if and when one will pass.

The Senate was unable to move forward with a bill last year authorizing FDA regulation of tobacco products. Senate members believe that for a buyout to pass, it must be linked to FDA regulation. House members want a buyout without regulation, he said.

Cigarette manufacturers also disagreed over FDA regulation, with one major manufacturer stating it would not support a buyout that did not have FDA regulation linked to it. Other tobacco companies oppose regulation.

Some Senators representing tobacco states tried to move an amendment without FDA regulation through an omnibus appropriations bill. Sen. Elizabeth Dole of North Carolina made a final effort to include a $7.2 billion buyout plan into a spending bill, but leadership rejected it.

Sen. Mitch McConnell of Kentucky said in December he will continue to make the buyout a top priority, said Briggs.

"Anything could happen at any time," he said. "We are still committed to try to work on it. I can't tell you where things are going to end up."

A buyout is needed for several reason, one being that quota has declined 814 million pounds since 1998.

The USDA announced in December that the 2004 flue-cured tobacco quota would be 471.3 million pounds, which is 10.45 percent lower than last year.

Domestic purchase intentions also continue to drop, the three-year export average has declined and the imported tobacco percentage in U.S. cigarette production is up to 55 percent.

Bryant Spivey, an extension agent in Duplin County, just returned from Brazil after spending several days observing its tobacco operations. He said the country is the U.S.'s number one competitor in the world market and also competes in soybeans, cotton, corn and other crops.

More Brazilian tobacco is being imported into the U.S. each year and it is exporting more to the same countries that the U.S. exports to.