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Mon 18 Oct, 2004 02:47 pm
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Quote:Joint effort pushes tobacco bill through
STACEY S. MANNING The Kentucky Standard
In days the president will likely sign the tobacco bill -- a plan that has been some six years in the making.
After starts and stops, changes and rewrites, U.S. Congressman Ron Lewis, who represents the Second District of Kentucky, is thrilled to see a plan come through that will aid the state's tobacco farmers.
Several months ago, Lewis said it didn't look as though the tobacco buyout plan would work. He thought if the bill didn't become law with this Congress, he would have to tell his constituents a tobacco deal wouldn't happen.
"Thankfully, we didn't have to do that," he said.
The tobacco buyout plan is part of the American Jobs Creation Act of 2004. The act was negotiated by the House and Senate in early October to repeal the foreign sales corporation/extraterritorial tax. The plan is designed to bring tax relief for creators of jobs in the United States.
Lewis played a key role in getting the Fair and Equitable Tobacco Reform Act and American Jobs Creation Act combined. This ultimately led to the passage of the tobacco buyout deal that is awaiting signature by the president.
"This is a monumental event in the history of the commonwealth," Lewis said. "This bill delivers long-awaited relief to hard-hit farmers in Kentucky and other states, replacing jobs and revitalizing thousands of communities who depend upon tobacco farming for economic stability."
The provisions first drafted
in a House plan called for a
$9.6 billion buyout that would have come from the Federal Treasury. The U.S. Food and Drug Administration (FDA) would not have had any regulatory control over tobacco products.
A plan drafted in the Senate was for a $13 million buyout that would have been paid for by tobacco companies. The FDA would have been involved in the Senate plan.
The plan awaiting the president's signature is included as a conference report to H.R. 4520. Under the plan, $10.4 billion would be available with about $2.5 billion expected to benefit Kentucky farmers. The final bill does not have any FDA involvement and will be paid for by companies that import or make tobacco products sold in the U.S.
"The FDA would not have passed the House," Lewis said.
The plan also includes $500 million to do away with outstanding loan costs and pool stocks.
Under the agreement, payments based on 2002 quota levels will be distributed over 10 years. The buyout would give payments of $7 per pound to quota holders and $3 per pound to growers.
With the buyout, about half to two-thirds of Kentucky farmers will likely get out of the tobacco growing business, Lewis estimated. With the average tobacco farmer in his 60s, many payments will likely go toward retirement.
For younger farmers who stay in, Lewis said, payments may be used to help eliminate overhead costs. The remaining farmers would then direct contract with tobacco companies meaning they would know exactly how much to grow and what they will get paid for it.
"I don't think we will continue to see small tobacco farmers," Lewis said.
With the new plan, the existing tobacco price support program is on its way out. The plan has been supporting farmers in market prices since 1938. It will be a transition for farmers to adjust to the change, but most farmers had been pressing for the buyout, Lewis said.
"It's been a way of life," he said. "It's going to be different."
Once the bill is signed into law, farmers can expect to receive the first payments sometime during the first quarter of 2005.
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....... or focus more on this:
Quote:Bill On Bush's Desk May Make Smoking Even More Harmful
October 18, 2004
WASHINGTON -- A bill that's awaiting President George W. Bush's signature would drop requirements for imported tobacco to be inspected for chemicals and pesticides banned in the United States but allowed elsewhere.
In other words, government officials would no longer be required to look for substances such as DDT in imported leaf.
The change in inspection policy is contained in a major corporate tax bill just passed by Congress.
A director of the American Cancer Society said this change could make cigarettes even more harmful. That's because U.S. tobacco companies are relying more on imported tobacco.
Agriculture, Homeland Security Department and FDA officials say such a policy change is unique because they didn't know of any other agricultural product that comes into the United States without some kind of inspection.
Source
Quote:U.S. to Quit Inspecting Tobacco
By NANCY ZUCKERBROD
Associated Press Writer
October 17, 2004, 6:56 AM EDT
WASHINGTON -- Legislation just passed by Congress abolishes the requirement that the government inspect imported tobacco to ensure it is not laced with chemicals and pesticides banned in the United States but permitted elsewhere.
That means imported leaf, which U.S. tobacco companies are increasingly relying on, could make cigarettes even more harmful, said Tom Glynn, director of science and trends for the American Cancer Society.
Glynn said about 60 of the 4,000 or so chemicals in cigarette smoke are linked to cancer. "What this may do is just add to that number, making an already toxic product even more toxic," he said.
The Agriculture Department, the Homeland Security Department and the Food and Drug Administration all have authority to inspect other imported agricultural products to ensure they meet U.S. standards. Officials at those agencies said they did not know of another agricultural product that comes into this country without some kind of inspection.
U.S. farmers are unhappy about the end of foreign inspections on tobacco. The change was included in legislation that will pay tobacco growers $10 billion and end a Depression-era program that set price and production controls on American-grown leaf.
The tobacco plan is part of a major corporate tax bill that is awaiting President Bush's signature.
The federal tobacco program included foreign and domestic leaf inspections. Lawmakers were reluctant to retain any part of the program, which growers and cigarettes makers had paid for, and did not want the public to cover any of the costs. The legislation requires cigarette makers to fund the buyout.
Growers had complained for years that the old quota system kept their tobacco prices too high to compete with imported tobacco. But they now say they would like assurances their foreign competitors will not try to lower production costs by relying on pesticides such as DDT, which is banned in the United States.
These farmers also say foreign growers use chemicals not permitted in the United States that make tobacco leaves more pliable and easier to harvest.
"If they know it's not going to be inspected, they're going to take the cheapest route whatever that might be," said Rod Kuegel, a tobacco farmer from Owensboro, Ky.
Kuegel worries that growers in developing countries may take this route. African and South American countries are among the leading exporters of tobacco.
Both Philip Morris USA, the nation's largest cigarette manufacturer, and leading rival Reynolds American plan to inspect foreign tobacco that they use and test for outlawed chemicals, company spokesmen said. Philip Morris spokesman Mike Farriss said the costs should be minimal.
Even so, small cigarette manufacturers that sell discount brands are unlikely to conduct such inspections, said Arnold Hamm, assistant general manager of a Raleigh, N.C.-based growers' cooperative.
Lamar DeLoach, president of the Tobacco Growers Association of Georgia, said he is concerned about relying on manufacturers that pledge to test.
"I guess my only problem with that is that other commodities that come into this country have federal inspections, and federal inspections ought to allow the people to know what's coming in," DeLoach said.
"If I'm bringing in bananas, and I just tell the government, 'Well don't worry about inspecting these. I'll do it myself,' how comfortable would you as a consumer feel about me doing that?"
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