[Congressional Record Volume 143, Number 144 (Thursday, October 23, 1997)]
[Senate]
[Pages S11034-S11037]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  By Mr. FORD (for himself, Mr. Helms, Mr. Faircloth, Mr. McConnell, 
Mr. Cleland, Mr. Hollings and Mr. Thurmond):
  S. 1310. A bill to provide market transition assistance for tobacco 
producers, tobacco industry workers, and their communities; to the 
Committee on Agriculture, Nutrition, and Forestry.


           THE LONG-TERM ECONOMIC ASSISTANCE FOR FARMERS ACT

  Mr. FORD. Mr. President, on June 20, the attorneys general of several 
States emerged from a Washington hotel conference room to announce a 
proposed national tobacco settlement. The announcement sent Washington 
spin doctors to work, pronouncing the defeat of public enemy number 
one--the tobacco industry. Press release after press release painted a 
picture of fat cat tobacco executives, rich at the expense of public 
health, finally being called to account.
  But this picture of tobacco is not what I see when I go home to 
Kentucky. There I see hard-working farmers trying to make an honest 
living off a crop that has helped hundreds of communities in my State 
thrive for centuries.
  Maybe you've forgotten about the farmer. That wouldn't surprise me. 
They weren't in the room during the tobacco negotiations. They were not 
included in the final settlement, and to date, the only plan that 
mentions them would put them out of business.
  Mr. President, it is as if the thousands of men and women who have 
been the bedrock of hundreds of communities simply no longer have any 
value.
  Sixty thousand farm families produce tobacco in 119 of 120 counties 
in my State. While tobacco uses only 1 to 2 percent of their acreage, 
it produces 20 to 25 percent of their farm income. Along with these 
farm families are tens of thousands of workers who warehouse, process 
and manufacture tobacco. They all live in communities where every 
tobacco dollar has a multiplier effect on the local economy, rolling 
over three to four times.
  And they're the reason I am here today.
  Mr. President, I am pleased to join several of my colleagues in 
introducing legislation which addresses the needs of tobacco farmers, 
tobacco workers, and their communities and should provide the framework 
for taking care of them in any comprehensive legislation.
  First and foremost, ``taking care of them'' means protecting the 
tobacco program.
  Opponents of the program claim they're not attacking farmers, but 
with the program goes stability, with the program goes the small family 
farmer, and with the program goes hundreds of small rural communities.
  Mr. President, the program is the key to preventing fence row to 
fence row production.
  It is the key to keeping tobacco prices high.
  And it is the key to keeping tobacco production in the hands of small 
family farms and keeping rural communities alive.
  Without the program, look for cheap cigarettes, look for the size of 
farms--at the very least--to triple in size. Look for family farms to 
go out of business, and look for the rural communities they sustain, to 
shut down.
  What are the benefits of killing the program? For hard-working family 
farmers there simply are none.
  That is why killing the program is a nonstarter. And even though 
criticisms are based either on misconceptions or misrepresentations of 
the program, we're willing to address them by covering all these costs 
with our legislation. But make no mistake, we're not willing to 
eliminate the program.
  The legislation we're introducing today follows the principles every 
one of my colleagues went on record supporting in a September 9 Sense 
of the Senate amendment. We all agreed that tobacco growers should be 
fairly compensated as part of any Federal legislation to implement the 
tobacco settlement. We all agreed tobacco growing communities should be 
provided sufficient resources to adjust to the economic impact of any 
settlement legislation. We all agreed compensation to farmers and their 
communities should come from funds provided within the parameters of 
the national settlement, as paid by tobacco manufacturers. And we all 
agreed the tobacco program should be maintained and operated at no net 
cost to the taxpayer.
  These four simple principles will mean the difference between a 
productive future for tobacco farmers and a ``for sale'' sign up at the 
end of the driveway--the difference between communities where a 
farmer's children stay to raise their children and a ghost town.
  At the core of the legislation is the establishment of a Tobacco 
Community Revitalization Trust Fund. The trust fund will provide 
compensation for farmers, investment funds for communities, and 
education and retraining funds, all within the parameters of the 
tobacco program and the national tobacco settlement dollar figure.
  First, the fund will provide tobacco quota holders with ``Payments 
for Lost Tobacco Quota'' based on the drop in the amount of tobacco 
they can grow. The national tobacco settlement could cause consumption 
to drop substantially, which would translate into deep cuts in each 
farm's tobacco quota and each farmer's income. Under our bill, quota 
holders will receive $4 per pound per year for every pound by which the

[[Page S11035]]

quota drops below their base quota. A maximum lifetime limit on 
payments will be set for quota holders at $8 times the number of pounds 
in their base quota. Those who lease quota or grow tobacco as a tenant 
farmer will receive $2 per pound, with a life time cap of $4 per pound.
  Second, the trust fund will make payments to cover all administrative 
costs associated with the production of tobacco. This will include 
salaries at USDA to administer the tobacco program, and any shortfall 
in the provision of crop insurance for tobacco farmers. This should 
finally put a stop to false claims that tobacco growers receive 
subsidies from the Federal Government.
  Third, the trust fund will provide Farmer Opportunity grants for 
higher education. Tobacco farmers and their dependents will be eligible 
for higher education grants of up to $1,700 per year--which is the 
current average size of a Pell grant--to attend a university, community 
college, vocational school, or other recognized institution. Academic 
eligibility standards will be modeled after Pell grants, including 
requirements that students maintain satisfactory progress toward the 
completion of their degree, and maintain at least a C average. Funding 
will be provided to cover up to 25,000 individuals from tobacco farm 
families.
  Mr. President, the tobacco program has long meant the difference 
between whether a family can afford to send their children to college 
or whether their education stops after grade 12. We need to do 
everything we can to preserve a farm family's ability to provide their 
children with access to higher education opportunities.
  Fourth, the fund will provide benefits to displaced workers from 
tobacco warehousing, processing, and manufacturing operations. This 
program is modeled after the NAFTA Trade Adjustment Assistance Program 
for Displaced Workers. Under these provisions, workers who lose their 
jobs can receive tobacco readjustment allowances, employment services, 
job training, job search allowances, and relocation allowances, all of 
which are modeled after the NAFTA benefits and services.
  And fifth, the fund will provide economic development assistance to 
tobacco growing communities hit hard by the national tobacco 
settlement.
  The economic development fund will begin at $400 million per year 
minus the amount used for administrative costs of the tobacco program, 
distributed through block grants to tobacco growing States.
  States can use the funding to provide several types of assistance 
including rural business enterprise grants, farm ownership loans, 
activities which create farm and off-farm employment, activities which 
expand infrastructure facilities, and services which help diversify 
local economies, long-term business technical assistance, grants to 
agricultural organizations to help tobacco growers find supplemental 
agricultural activities, and activities which create or expand locally 
owned value-added agricultural processing and marketing operations.
  Providing stability, preserving traditions, keeping farms in the 
hands of families, protecting hundreds of communities, Mr. President, I 
believe this legislation will give tobacco farmers, tobacco industry 
workers and tobacco growing communities the resources to deal with the 
national tobacco settlement likely to impact them.
  With the tobacco program completely funded by tobacco growers or the 
industry itself, antitobacco advocates can no longer take aim at the 
farmer under the pretense of fiscal responsibility. And with a sense of 
stability and predictability, farmers can begin to prepare for the 
future in a responsible and thoughtful way.
  I plan on sharing this proposal with my colleagues involved in 
writing comprehensive legislative proposals to implement the national 
tobacco settlement, but I hope all my colleagues interested in this 
issue and interested in preserving a farming tradition will take a 
close look at this program so that we can move forward in helping 
tobacco farm families and their communities.
  Mr. President, we have not just singled out the farmer. We have 
included the total community, from education to job opportunity, 
whatever it might be, so we have taken in the whole community. I am 
very pleased with the hard work and support that has been given to me 
by Senator McConnell, Senator Faircloth, Senator Helms, and others to 
make this introduction so important today.
  Mr. FAIRCLOTH. Mr. President, I rise as an original cosponsor of this 
bill, the LEAF Act. I want to thank Senator Ford for the hard work and 
the leadership role he has taken over his years in the Senate on this 
bill and in support of the tobacco industry as a whole and, especially, 
the farmers involved in it.
  There has been a lot of talk on this floor about farmers. Everyone is 
against tobacco, but they are for farmers. Everyone pledges to help the 
farmers. This bill is a blueprint for that help. This plan offers 
assistance to the tobacco community across North Carolina, Kentucky, 
and the entire producing area, including Virginia, South Carolina, 
Georgia, and Tennessee. These people are the men and women in tobacco 
fields and cigarette factories and their communities.
  There are 18,000 tobacco farmers in North Carolina and thousands more 
throughout the Southeast. The farmers of my State collect more than $1 
billion in receipts each year from tobacco alone. That is a big number, 
but it is spread over many small farms. Everyone in Washington talks 
about the small farmer, the family farm, but North Carolina is the 
State of small farms. The average farm size in North Carolina is just 
159 acres, one-third of the national average, which is 469 acres. It is 
difficult at best to make a living on a small farm. Tobacco kept these 
people alive on small farming operations over the last 60 years. 
Tobacco produces roughly $1,200 an acre in net profit. There isn't 
anything else they can plant that comes close to this, even remotely 
close. Tobacco keeps the family farm together, and, Mr. President, it 
keeps the family on the farm. That is why we are here with this bill 
and the reason I am here this morning.
  The impact of this proposed tobacco settlement would throw thousands 
of small farmers off their land and immediately into bankruptcy. It is 
up to us to step up and to help them through this transition.
  I have talked about farmers so far and only farmers, but the economic 
impact of tobacco and this proposed settlement is not limited to 
farmers. There are 20,000 working people in factories across North 
Carolina manufacturing tobacco products. They pay mortgages, buy 
groceries and struggle to meet tuition bills. They are simply middle-
class American people. However, tobacco is their livelihood, and 
Congress has set its sights on destroying their livelihood. That is 
simply what has happened here.
  The entire tobacco sector employs 100,000 people in North Carolina. 
That is $7 billion in business in the State. It is 8 percent of the 
work force and represents a lot of families. I am here to attempt to 
stand up for these people.
  Next year the Congress will take up an agreement that deals a real 
blow to the livelihood of these thousands of people. Tobacco production 
is expected to drop significantly under the proposed agreement. The 
farmers and factory workers are in the cross hairs of the tobacco 
settlement, and whether the antitobacco crowd is aiming at them or not, 
they are the ones who are going to be hit. This bill tells them that 
Congress will try to lessen the effects on the innocent parties, the 
hard-working men and women in the tobacco fields and on the factory 
floor.
  Senator Ford explained these transition payments to farmers. The 
Freedom to Farm Act moved farmers to an unregulated market and included 
substantial transition payments to assist them through this change. 
However, there was nothing in that bill designed to cut production of 
corn, wheat or any other crop. This proposed tobacco settlement takes 
aim at this crop, however, so the transition payments are a necessity.
  The amount of money in this bill for the farmers and factory workers 
is modest compared to the amount of money that others seeking from the 
settlement. Somewhere in the neighborhood of $28 billion would be 
involved in Senator Ford's bill. Now, it might interest you to know 
that the hundreds of trial lawyers involved in this potential 
settlement expect to receive up to

[[Page S11036]]

$45 billion, almost two times as much as we are asking for the more 
than 150,000 people effected by this settlement.
  The farmers face a situation where the Government will target their 
crop and cut its production. We need the transition money. How many 
people, farmers or not, could stand a quick reduction of 30 percent of 
their income due to the intended actions of the Federal Government? 
That is simply what we are talking about here--reducing the tobacco 
farmer's income by 30 percent. This bill is about the future of 
communities and literally big sections of our State. The bill includes 
farm opportunity scholarships to allow the farmers and their children 
additional educational opportunities. It also provides for rural 
development to enable these communities to survive the transition. This 
bill tells farmers that Congress is not leaving them without any 
options for the future. It tells them the rhetoric against tobacco is 
not really against them. At this moment they believe that it is and 
have every reason to think so.
  This bill is a chance to back up all the rhetoric about being against 
tobacco but for farmers. If we are for farmers, we will pass this bill. 
I hope my colleagues will join me, Senator Ford, Senator McConnell, and 
Senator Helms in support of this bill.
  Mr. McCONNELL. Mr. President, I thank Senator Ford for his important 
work and his leadership on this issue. It is so vital to the State we 
jointly represent.
  I am pleased to be on the floor of the Senate today to talk about an 
industry that has played an integral role in our country's history and 
continues to shape the cultural and economic landscape of the 
Commonwealth of Kentucky. The industry, of course, is tobacco. And for 
the next few minutes I want to discuss tobacco and the shifting 
political terrain that will affect the 136,000 farmers who produce this 
agricultural commodity.
  This summer a group of States attorneys general, representatives of 
the major tobacco companies, and public health officials negotiated an 
agreement that would limit the companies' legal liability in exchange 
for their promise to help reduce smoking and compensate States for past 
damages caused by use of their product. This agreement obviously must 
be passed by the Congress and signed by the President to have the force 
of law, and that process is now what best could be described as in its 
initial stages.
  To my deep disappointment, tobacco farmers were not included in these 
negotiations. They had no seat at the table. Not surprisingly, there is 
not a single penny in this $368 billion pool of money for tobacco 
farmers, even though they will be the ones most directly impacted by 
the agreement. On the other hand, the agreement allows for the 
compensation of well-heeled sporting enterprises such as auto racing 
and rodeos in the event they lose sponsorship dollars but not a penny 
goes to the hard-working tobacco farmers who may well be driven off 
their family farms because of an agreement to which they were not a 
party.
  Today, along with Senator Ford, the principal craftsman of this bill, 
Senator Helms and Senator Faircloth, I propose to right that wrong by 
supporting a package that will provide for these farmers' well-being. 
Today, my colleagues and I are introducing the Long-term Economic 
Assistance for Farmers Act, what we call the LEAF Act, which creates an 
umbrella ``Tobacco Community Revitalization Fund.'' The fund, to be 
paid for from moneys within the existing $368-billion settlement, will 
stabilize the incomes of tobacco farmers by providing payments for lost 
tobacco quota to tobacco quota holders, tenants and those who lease 
quota. Quota holders who produce their own tobacco will be paid $4 a 
pound in any given year for every pound their quota falls behind their 
average 1994-1966 quota level. In the case of leased tobacco and tenant 
farmers, payments will be $2 a pound.
  A portion of the fund will also be used for Tobacco Community 
Economic Development Grants which will help transition tobacco 
dependent communities to a more diversified economic base. The economic 
development grants will be used for costs incidental to the tobacco 
program, economic development grants to States, farmer opportunity 
grants for education and training, and assistance for displaced tobacco 
industry workers.
  Mr. President, most agree that tobacco farmers and their communities 
should not bear the brunt of the agreement's dislocating effects. For 
instance, Minority Leader Daschle has said that ``We need to address 
some of the concerns that were not addressed in the agreement * * * 
especially those dealing with small farmers.'' The President himself 
has said, ``Any tobacco legislation must protect tobacco farmers and 
their communities.'' Even tobacco's most committed foes such as former 
FDA Commissioner David Kessler recognize that, as he put it, ``farmers 
should not be left out'' of the agreement. The LEAF Act does provide 
for farmers. It provides compensation for reduced quota to owners and 
those who produce the tobacco. It provides opportunities for tobacco 
farmers to diversify their crops. It provides economic stability for 
small tobacco farmers and their tobacco communities. It provides 
education and training opportunities for tobacco farmers and their 
dependents. It keeps farmers like mine in Kentucky in the business of 
producing this legal agricultural commodity.
  So, Mr. President, I rise in support of the LEAF Act. I thank Senator 
Ford for his leadership and tireless efforts to protect our tobacco 
growers and their communities. I believe Senator Ford's bill provides 
the best alternative for our growers.
  Having said that, I realize we face an uphill battle. Today's 
political environment for tobacco interests is darkened mightily. In 
today's Senate, outrageously unfair amendments that deny basic crop 
insurance to tobacco farmers are only narrowly defeated. The ceaseless 
assault on tobacco has left the tobacco grower imperiled. In this 
context it may be difficult to sustain the political support necessary 
to enact all of the bill's provisions. I personally will fight for the 
Ford package, but I also will be cognizant of political reality. It is 
my fervent hope that we can incorporate the LEAF Act into any 
settlement legislation.
  If that is not achievable, I will not be discouraged from pursuing 
alternative ways to best provide tobacco farmers' needs.
  Finally, Mr. President, as Congress discusses the proposed tobacco 
settlement, I urge my colleagues to remember that our decisions will 
not affect some nameless, faceless machine. Rather, our actions here 
will bear directly on thousands of hard-working tobacco farmers, men 
and women who pay their taxes, go to church, raise their families, and 
do their best to provide for future generations. We owe it to them to 
ensure that today's changes in the tobacco culture leave them with a 
stable future as well.

  Mr. President, I yield the floor.
  Mr. FORD. Let me thank my colleagues for their remarks. One of the 
things that we have to take into consideration is that this bill is a 
bill that looks not only to the farmer but to his family, his children 
for education, and economic development in the community. I hope people 
understand, I hope my colleagues understand, that this bill 
incorporates payment for everything, even the shortfall in the crop 
insurance. So there should not be these so-called cheap shots, as my 
colleague from Kentucky explained, as it relates to the tobacco farmer, 
under this proposal. If you take a look, I would hope Senators will 
understand that. We have worked very hard putting this package together 
and hopefully it will be accepted within the parameters of any 
agreement.
  Mr. HELMS. Mr. President, I too am pleased to be an original 
cosponsor of Senator Ford's bill, titled the Long-term Economic 
Assistance for Farmers Act (S. 1310). The able senior Senator from 
Kentucky is to be commended for offering this legislation.
  Mr. President, as farmers and rural communities in tobacco-growing 
States come to terms with the national tobacco settlement, this bill 
will address some of the needs sure to arise during this critical 
economic adjustment period. I believe this legislation is a good 
starting point for helping these farmers, their families, and their 
communities.
  Obviously, it is too much to hope that everybody affected by the 
settlement will be satisfied with every provision in this bill, but it 
is important

[[Page S11037]]

that we begin to take steps to ensure farmers the same stability and 
predictability that the tobacco companies sought when they negotiated 
the national tobacco settlement.
  Mr. President, let me make it clear that--and I believe Senator Ford 
and all other supporters of this legislation agree--that this is only a 
starting point. It may be--after consultation with growers, companies 
and other affected parties--that only minor changes in this legislation 
need to be made. Or, it may be--that a significant overhaul in our 
approach to this issue is needed.
  Whatever the future holds, of this tobacco growers may be assured: I 
will do everything proper in my power to protect their interests. I 
have often been criticized for standing up for the livelihoods of 
tobacco farmers--and I suppose I will be criticized many times more in 
the future. Let the critics proceed, but I shall never retreat from my 
convictions that the hard-working families deserve to be recognized for 
the good citizens and splendid families that they are.
  So, Mr. President, again I commend my friend from Kentucky, Mr. Ford, 
for his tireless effort to protect tobacco farmers, and I am honored to 
stand with him once again.
                                 ______