[Congressional Record Volume 149, Number 115 (Wednesday, July 30, 2003)]
[Senate]
[Pages S10189-S10193]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TOBACCO MARKET ADJUSTMENT ACT OF 2003
Mr. McCONNELL. Mr. President, I rise today to introduce the Tobacco
Market Adjustment Act of 2003. This is truly a key moment in the
history of tobacco as each of the Senators from the leading tobacco-
producing States stands united in support of changing the Government's
involvement with tobacco.
This legislation enjoys the support of farm bureaus from Kentucky,
North Carolina, Virginia, Tennessee, South Carolina, Georgia, Florida,
as well as the support of the Burley Co-op, Burley Stabilization, and
the Council for Burley Tobacco.
I ask unanimous consent to have letters indicating their support
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
July 16, 2003.
Tobacco State Senators: For many tobacco dependent states
in the Southeastern United States, tobacco buyout
legislation, possibly coupled with FDA regulation of tobacco
products, is the most important potential federal legislative
initiative for 2003. The undersigned Presidents of State Farm
Bureaus believe this is the year to accomplish a tobacco
buyout. For that reason, we urge you to endorse the
legislative language developed by many meetings of Senate
staff and eventually pledge your willingness to cosponsor the
legislation as it is introduced.
We continue to believe there are some details yet to be
ironed out in the legislation and we look forward to working
through those as we continue the process, but we believe that
to move forward, it is imperative that all tobacco state
Senators support one bill and we believe the legislative
language developed by the Senate staff gives all of us the
best shot at accomplishing a buyout this year.
We appreciate all the work you have done up to this point
in ensuring that tobacco farm families have a vibrant future,
and we look forward to continuing to work through this
process in the weeks ahead.
Sincerely,
Sam Moore,
President, Kentucky Farm Bureau.
Flavius Barker,
President, Tennessee Farm Bureau.
Bruce Hiatt,
President, Virginia Farm Bureau.
Carl Loop,
President, Florida Farm Bureau.
Larry Wooten,
President, North Carolina Farm Bureau.
David Winkles,
President, South Carolina Farm Bureau.
Wayne Dollar,
President, Georgia Farm Bureau.
____
The Council for Burley Tobacco,
Lexington, KY, July 25, 2003.
Hon. Mitch McConnell,
U.S. Senate,
Washington, DC.
Dear Senator McConnell: The Council for Burley Tobacco,
Inc. believes that during the 2003 Legislative Session is the
best and maybe the only time to pass a Tobacco Buyout Bill.
We are concerned about the lateness of the legislative
session.
We appreciate very much your leadership in developing a
consensus buyout bill with the Senate Tobacco Group and we
fully support your effort to introduce and move forward in
the Senate the consensus bill.
Please let us know how we can help you with this process
and again we thank you for your leadership and support.
Sincerely,
Johnny Bullock,
President.
Dean M. Wallace,
Executive Director.
____
July 29, 2003.
Hon. Mitch McConnell
U.S. Senate,
Washington, DC
Dear Senator McConnell: We are writing to thank you for
your ongoing effort to help tobacco farmers and our
communities and to offer our support to secure Senate passage
of your newly-drafted tobacco buyout legislation.
Our organizations and the farmers we represent firmly
believe that the Congress has a unique opportunity to
establish a new visionary tobacco policy in this country--one
that will allow tobacco-producing communities to adjust to
the realities of the permanently altered marketplace while
simultaneously protecting public health. We are united in our
view that the Senate consensus bill is a major step toward
achieving that objective.
While we look forward to continued discussion on a few key
provisions in the Senate bill, we intend to work vigorously
to secure Senate passage of this legislation.
Again, thank you for your leadership and commitment to
tobacco farm communities. We stand ready to work with you
side-by-side to pass historic tobacco legislation in 2003.
Sincerely,
Henry S. West,
President, Burley Tobacco Growers Cooperative Association.
George Marks,
President, Burley Stabilization Corporation.
Mr. McCONNELL. Mr. President, tobacco was in the United States before
Europeans arrived here. It is depicted in various places here in the
Capitol. George Washington and other Founders of our country grew
tobacco. It has been an integral part of our history.
It is also no secret that the use of tobacco is dangerous to the
health of Americans. Increasingly that view is held by a large number
of Americans. The unfortunate side effect of that from an economic
point of view in a State such as mine, which still has 44,000 tobacco
growers, is that their income continues to plummet.
Back in 1998, I first suggested a buyout might be an appropriate
direction in which to go. Ironically, at that time, that was roundly
criticized by all the farm organizations in my own State and across the
burley belt and flue-curing areas, the argument being that it would
lead to the end of tobacco production.
It is interesting, as I go across my State, that I am treated now as
a visionary because it is now virtually the unanimous view of our
growers and certainly the unanimous view of our farm organizations that
a buyout is the only appropriate measure to take at this particular
juncture in our history.
The reason for that is the quota established under the tobacco
program back in the 1930s, which has been adjusted year to year all of
these years, has declined dramatically--up to 40 percent in the last 3
or 4 years alone. Our growers realize they are sitting on a declining
asset that lowers the value of their property and their farm values and
it is time to act and to move in a different direction.
Simply putting together a buyout proposal everyone could agree to--
that is the various farm organizations as well as Senators from tobacco
States--has not been easy. In fact, we have been working on this for 6
months to get to the point of actually introducing a bill, which as we
all know around here is just the beginning. When you introduce a bill,
it is not easy. It has not been easy to get to this point, which many
people would argue is just the start. We have, however, almost total
consensus. We have 100 percent consensus among tobacco State Senators
and almost total consensus among those involved in the production of
tobacco. We feel that is a significant accomplishment although it
certainly doesn't guarantee the result we all would like to see, which
is a law.
We understand this issue is likely to go forward in the Senate in
conjunction with an FDA tobacco regulation bill which is being worked
on in the Labor Committee under the leadership of Senators Gregg,
DeWine, and Kennedy. It is our hope at some point after the recess to
link those two measures together with what we hope will be a formidable
coalition here in the Senate across an ideological divide to move us in
the direction of achieving both of these goals.
Frankly, accepting an FDA bill is a bitter pill for this Senator to
swallow, and I think some other Senators from the burley belt and flue-
cured tobacco areas. But that simply is the reality which we confront
today. These measures are likely to move in transition.
I also want to commend my colleague from Kentucky, Senator Bunning,
who I know is here on the floor. He has been
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an integral part of the development of this bill, as well as our new
colleague from North Carolina, Senator Dole, who is also here, both of
whom will be speaking momentarily. They have been completely involved
in the formulation of this product from the very beginning. As I said,
it has not been easy to get to this point. We all understand it is
going to be difficult to move the ball even further down the playing
field. But today we begin with unity. We begin with an aggressive
effort to achieve this buyout for our farmers.
America's history is closely linked to tobacco. It provided the early
settlers with a key crop fro trade and barter, and it provided
gentleman farmers throughout the colonies with livelihoods that sparked
the first inklings of the dream of an independent country. Throughout
this beautiful Capitol there are depictions of tobacco leaves
signifying this crop's importance to the founding of this country.
George Washington, Thomas Jefferson, and James Madison all raised
tobacco. Almost no crop in the history of agriculture has provided so
many with a living off of so little land.
In agriculture, it is popular to speak about the importance of
supporting the small farmer. In reality, the number of small farms has
declined as competitive forces have forced most farms to consolidate
and diversify to compete. Many farmers now must work second jobs in
addition to farming just to get by. However, over centuries, small
farmers with limited land have been able to carve out a living farming
tobacco. The average acreage per tobacco farm is 6.7 acres--for my
friends from the South and the Great Plains, you know that these are
some small farms.
In my home of Kentucky, tobacco production is intimately connected to
the history and the culture of the State. In fact, the basis of
agriculture in the State of Kentucky has been inextricably tied to this
crop. Home mortgages have been based on crops, loans for small
businesses, and even children's educations have been funded through the
performance of an individual's tobacco crop. It has been said that ``A
good crop is a good Christmas.''
At harvest time, families gather: sisters, brothers, aunts, uncles,
cousins and children all set about the hard work of bring in a tobacco
crop. In the late fall, when the markets open for crop, entire
communities hold celebrations and ceremonies. The marketing process
along with the auctions have a particular significance as the
livelihood of an entire family is dependent on a good crop.
Throughout Kentucky, tobacco has helped small communities construct
schools and convention centers, it has supported local governments, and
most importantly, it has supported the small family farmer. In
Kentucky, tobacco is considered the 13 month crop, since there is
virtually no time during the year that difficult and labor intensive
work is not required. Despite the difficult labor required, it has
provided generation after generation with the opportunity to make a
living.
However, the very qualities that have allowed tobacco production to
continue through the years have also led to the dependence of a
culture, and a region, on this crop. There is no simple solution to the
problems facing tobacco farmers, but there are clear steps that we can
and should take to help these individuals transition into a new era.
Most of the key tenets of the tobacco program were established by the
Agriculture Adjustment Act of 1938. The program implemented a system of
supply restrictions and price guarantees aimed at stabilizing tobacco
prices and income. Under this program, farmers agreed to restrict
supply via acreage/marketing allotments--or quotas--in exchange for
minimum price guarantees. The levels of production were set each year
to best ensure that the prices received for tobacco would meet or
exceed the guaranteed price.
These marketing quotas were originally divided among active growers,
but this production right was then handed down to heirs or sold to
others as an asset. As a result, much of the quota is now controlled by
non-producers who rely on proceeds from renting or leasing this
production right to growers. It is regarded as an inheritance and has
been relied upon to support many seniors' retirements.
In 1982, the first major modifications to the tobacco program were
made, requiring the program to operate at no-net-cost to taxpayers.
Since then, Federal funds have been prohibited from being used for
export promotion of American tobacco or research relating to tobacco
production, marketing, or processing. As a result of many international
and economic factors, the price supports have been reduced several
times since the 1980's as well.
Under the current program, levels of production are cut in an effort
to ensure a stable price. With lower consumption and increased foreign
competition, the levels of quota have been cut significantly and
farmers are paying much higher quota rents to continue producing.
In 1998, I proposed a buyout of the tobacco program, but this measure
failed due to a lack of support from grower groups and a lack of
consensus among elected representatives from tobacco producing States.
Since my effort in 1998, the programmatic decline of production has
imposed severe economic hardships on tobacco producing communities.
During a time when most agriculture production in this country has had
to consolidate into larger operations to remain competitive due to
economies of scale and foreign competition, tobacco farmers, faced with
the same challenges, have actually been forced through this program to
simply cut production. While manufacturing needs have only declined
slightly, production quotas have been reduced by more than 60 percent.
Such production cuts have forced domestic producers to vacate ever
larger amounts of market share to foreign producers. As a result,
domestic production levels have not been this low since 1908.
Despite financial help in the form of tobacco loss assistance
payments, the crisis imposed by the program is plunging rural farm
families in Kentucky and throughout the tobacco belt into poverty,
bankruptcy, or simply eliminating the ability of entire communities to
remain engaged in agriculture.
In less than a decade the number of tobacco farms in the United
States has declined from 123,000 individual farms to right around
90,000, with 44,000 of those in Kentucky. At the same time the annual
value of domestic tobacco farm production has fallen from an average of
$2.8 billion per year during the 1990's to $1.7 billion in 2002. In
Kentucky, tobacco represented 24 percent of total cash receipts for
agriculture products during the 1990s. By 2001, cash receipts for
tobacco dropped to 16 percent, and further quota cuts have continued to
reduce the amount of tobacco that can be sold by producers.
Imports have also had a significant impact as the quality of foreign
leaf has improved, domestic production has been restricted, and the
price of U.S. tobacco has been kept artificially high by quota rent
costs. These factors have led to dramatic increases in the amount of
imported tobacco, with imports increasing by 25 percent between 2001
and 2002 alone.
Simple put, 165,000 of my constituents and 44,000 rural family farms
in Kentucky are facing financial ruin due to the continuation of a
program that we in the Congress have the power to change. In 1998,
growers were divided on the issue and no consensus could be reached.
Today, the introduction of this bill signifies the unified support of
tobacco state Senators and growers to achieve the reforms.
The Tobacco Market Transition Act represents months of hard work and
negotiation. Such an undertakiing has required input, debate and
compromise over every element of the legislation ranging from the
funding mechanism to the health consequence of the changes that we are
proposing. It provides tobacco growers with a fair level of support for
transition and tobacco quota owners with a fair level of compensation
for their asset. We also worked to ensure that these payments are fully
decoupled from current production, to avoid any possibility of trade
implications.
The changes we propose represent a radical shift in the way that
tobacco production will occur in this country. The current tobacco
program has outlived its usefulness, and now represents a hurdle and a
threat to the economic health of communities in tobacco producing
states. Therefore, it is important to end the quota system and do
[[Page S10191]]
away with the strict production control price support system to usher
in the necessary reforms.
This legislation will provide $8/lb on 2002 basic quota for quota
owners and $4/lb on effective quota for 2002 for growers over 6 years.
The funds required will be obtained from manufacturers and importers of
all tobacco products sold in the United States and shall total no
greater than $13 billion. Many quota owners and growers would like to
be compensated at higher levels, while many companies claim that the
levels are too high. This bill represents our extensive efforts to take
both the needs of the growers and the concerns of the companies into
consideration.
No longer will quota owners have control over the right to grow
tobacco, a right that has been handed down from generation to
generation regardless of their actual involvement with production. In
doing so, this bill eliminates the increasing expense of quota rent,
which has artificially increased leaf prices without any benefit to
actual growers or manufacturers. This requires that these assets,
assets that were created and given value to through government
policies, be compensated. The impacts on the growers will be immediate
and the reduced costs of tobacco produced in the U.S. will reduce leaf
prices for manufacturers who utilize domestic tobacco.
However, in our consideration of the problems facing the farmers and
the manufacturers of tobacco products, it was essential to consider the
adamant opposition of health groups to the unrestrained growth of
tobacco throughout the United States. For years, tobacco production has
been limited in both the area it could be grown and the amount that
could be produced. Our proposal addresses these concerns by limiting
tobacco production to traditional tobacco producing regions and
providing a mechanism for producers to limit the amount of acreage
grown for each kind tobacco to historically established levels.
The key difference between the programs of yesteryear and the reforms
we are proposing today is the removal of the price guarantee for every
pound of tobacco grown. Under this new system, production will reflect
the market realities of the tobacco industry. This system provides key
elements for tobacco dependent communities to transition out of tobacco
production, while affording those who accept the risk, the opportunity
to continue and compete in a shrinking and every more competitive
market. Should these individuals choose to continue, we have created in
this bill the opportunity for growers to insure themselves--at no
expense to the U.S. taxpayer--against disastrous market conditions that
might emerge.
In addition to the buyout of quota, transition payments to growers,
and the new regulations governing tobacco production, this bill
provides significant support to assist small tobacco dependent
communities as they attempt to adjust to diminishing tobacco
production.
This legislation will not solve all the problems that face small
tobacco farms, but it does set in motion a system of reform and
transition that will allow these individuals and these communities a
chance to continue or move into new industries. Such continuation or
transition will not be possible without this legislation. These
communities are suffering due to problems with a government program
that we have the power to change. As elected representatives, we have a
responsibility to fix these problems, improve the lives of thousands of
small farmers and greatly impact the future of an entire region.
I salute my colleagues from tobacco producing states for their hard
work and willingness to compromise to reach this consensus legislation.
It has been a long and difficult process, but this is only the first
step in addressing this issue. For this exercise to have any meaning
whatsoever, we need to enact this legislation and make these reforms as
soon as possible.
The worst thing that can happen is nothing. So, I ask my colleagues
from all 50 States for their support of the Tobacco Market Transition
Act of 2003.
The ACTING PRESIDENT pro tempore. The Senator from Kentucky is
recognized.
Mr. BUNNING. Mr. President, I rise today in support of S. 1490, the
Tobacco Market Adjustment Act. Since Daniel Boone first came through
the Cumberland Gap in 1775, farming has provided the economic and
cultural backbone of Kentucky.
The family farm is the foundation for who we are as a commonwealth.
And for over a century, the family farm in Kentucky has centered around
one crop--tobacco.
Tobacco barns and small plots of tobacco dot the Kentucky landscape.
We are proud of our heritage and proud of the role that tobacco plays
in our history. Recently, we have recognized that we cannot rely upon
tobacco forever. We have seen the handwriting on the wall. In fact, in
1998 the Senate had a long debate about the future of tobacco. Nothing
passed then. But ever since we have known that sooner or later the
subject was going to return to the Senate floor.
Back in Kentucky, we have over the past few decades begun to
diversify and to prepare for the future.
We have tried to broaden our agricultural base. And we have had some
success with vegetables, beef cattle, raising catfish and expanding
into other areas like ethanol production.
But, at the end of the day, nothing brings as much of a return to the
small farmer and tobacco quota holder in Kentucky as tobacco.
Whatever the opponents of tobacco say, there is no denying that the
future for thousands of family farms and small communities across the
south is tied directly to tobacco.
This is a complicated issue. Many tobacco quota holders are not even
full-time farmers and hold off-farm jobs.
And even full-time farmers usually do not raise only tobacco but grow
it as only part of their total crop. But it is a crucial part, and for
many families it is absolutely irreplaceable, because the money they
get from tobacco pays their mortgage, puts their kids through school or
allows them to keep farming.
Outside of the western part of our State, Kentucky does not have tens
of thousands of acres of flat land. We need a crop that grows on
rolling hills, that thrives in our climate and can be profitably raised
on small plots that cannot accommodate other crops. Tobacco does that,
and economically it is the only crop that can.
Farmers get a yield of over $4,000 per acre of tobacco. They get less
than $300 per acre for corn, soybeans and hay. That is how big the
difference is. This is what has made tobacco the economic linchpin for
rural Kentucky. It is profitable and farmers rely on it. That might not
be popular today but it's an economic reality we have to face.
This Senate cannot--and if those of us from tobacco States have any
say about it, it will not--work on tobacco legislation without taking
care of tobacco farm families. Time have been getting tougher and
tougher for small farms and rural communities in Kentucky. Plus, as I
am sure most of my colleagues know, there is no tobacco subsidy.
We do have a price support system and production control program. But
even the quotas have lost 60 percent of their value since 1998. No
business would be around if it lost 60 percent of its income in 5
years, and we have lost a lot of growers.
Many farmers are barely holding on. They need help.
We believe that the time has come to assist them and to get the
Government out of the tobacco business at the same time.
Our bill, which has the full support of the grower community, will
buy out the tobacco program. We will give our growers relief and end
the Federal price support program.
We will let many growers, whose average age is 62, retire with
dignity.
Dr. Will Snell, the highly regarded agricultural economist at the
University of Kentucky, estimates 70 to 75 percent of tobacco growers
will get out of the business with a buyout.
In recent years tobacco has come under fire from all sides. And while
the antitobacco forces might not have intended it, their attacks are
hurting tobacco farm families and rural America.
In Kentucky, we have counties that depend on tobacco for as much as
85 percent of their revenue.
Without a tobacco base, land values will collapse and rural
communities could fall into an economic death spiral.
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Falling land values mean lower property tax revenues and eventually
severe cuts in services such as police, fire, and emergency services,
schools, sewers, and roads.
For decades farms and small communities have been built around the
cultivation of a legal crop. To change that now without accounting for
the consequences would be devastating.
Our bill recognizes this reality and would offer some degree of
economic certainty for tobacco farm families that toil at the mercy of
forces more powerful than themselves.
Mr. President, I am a realist. I know that passing any sort of
tobacco legislation in Congress is a difficult, uphill fight. And I do
not know if we are going to be successful with this bill. But I do know
that if any tobacco legislation passes, it must include help for
tobacco farm families. It is the least we can do for them.
I urge my colleagues in this Senate to understand this problem we are
having in these six tobacco States.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from North Carolina.
Mrs. DOLE. Mr. President, tobacco farmers across the Southeast have
been anxiously waiting for this day--the day when they can see hope for
the future. During the past 6 months, Senator McConnell, Senator
Bunning, and I have been working with all of the other Senators from
major tobacco States to craft legislation that will enable tobacco-
dependent communities to survive.
The Tobacco Market Transition Act, which we are introducing today,
will mark a major change from the current tobacco program, and it will
bring a major sigh of relief to countless farm families across the
Southeast.
For years, the Federal tobacco program created economic opportunity
for farm families in North Carolina and other tobacco-producing States.
It allowed towns to prosper that would have been hard pressed to make
it otherwise. It provided stability when other commodities suffered low
prices. It was the standard bearer of all farm programs. Buyers of
tobacco would come from all over the world to purchase America's leaf.
America's tobacco farmers held the world standard for quality, and they
still do today. But the environment in which they find themselves is
much different. And it is not of their own making.
The current tobacco program was never designed to accommodate the
significant changes that have engulfed this industry during the past
decade. Extensive litigation has forced the companies to cut costs and
thereby purchase increasing amounts of cheap foreign tobacco. The
increasing cost of U.S. leaf as a result of the current tobacco program
has caused more and more foreign buyers to look elsewhere for their
supply. The numbers do not lie: The United States now accounts for only
7 percent of all flue-cured tobacco production in the world.
We must not forget that behind every economic statistic is a human
element. The tobacco farmer bears the brunt of these changing forces
with nowhere to turn. Unlike the companies that can, and most often do,
pass their extra costs on to the consumer, the tobacco farmer must
absorb any extra cost and hope for better days ahead.
During the past 6 years, the amount of tobacco allowed to be grown--
also known as quota--has been cut more than 50 percent. In fact, not
since 1874 has so little been grown.
Let me explain what that really means. The tobacco farmer's paycheck
has been cut in half. They only get that if they can produce a good
crop. The weather, disease, and insect infestation make it all the more
challenging. Costs continue to rise. And making this even more
unbearable is the increasing cost of leasing quota.
In North Carolina, more than 60 percent of quota is leased--a major
factor in the increasing cost of production. As quota has continued to
decline, farmers have sought to rent more quota in order to maintain
the economic viability of their operations. The quota owners, trying to
maintain their income stream with less, demand a higher price for the
use of their quota. It is simple supply and demand, with an aim at
meeting a bottom line. But you can only go on like this for so long--
until you reach the breaking point.
This is where the growers are today. Many have hung on and have
continued to produce in hopes that things will get better, knowing that
if they got out they would have to sell their farm and liquidate other
assets to settle up their debt. Even then, many would still be short.
Every week my office receives calls from farmers in desperation. They
have worked hard all their lives, sent their children to college,
contributed to their community, but now--now--all of that is passing
before their eyes. There is a deep feeling of helplessness.
It is estimated that more than 60 percent of the tobacco farmers
today will exit the business entirely if a tobacco buyout is achieved.
Most are at retirement age, just hanging on a little while longer in
the hopes of being able to pay off their debt. Those who would like to
continue to produce know their market is shrinking, not because of a
lack of demand in the world for tobacco but because the price of U.S.
tobacco is too high as a result of the current tobacco program. All
they can do is watch as Brazil and other countries take their market
share.
Many say: Well, why don't they just produce another crop? The truth
is, they are. North Carolina ranks third in agricultural
diversification, behind only California and Florida. Our farmers are
very diversified but, as other Members from farm States will attest,
prices have been at historical lows for every commodity over the past 5
to 6 years--further exacerbating the problem for tobacco farmers in the
Southeast.
Tobacco farmers are at a crossroads but, unlike most people who reach
a point of decision in their lives, these salt-of-the-Earth folks have
no options because the current tobacco program does not accommodate the
changes needed for them to have an opportunity to survive in this new
marketplace. To them it is like standing on the tracks while watching a
train speed closer and closer and yet they can't move. They strain and
try but they are shackled with nowhere to go.
This is why a tobacco buyout is so sorely needed. It will allow those
who want to retire the opportunity to do so with dignity, the
opportunity to know that all they have worked for has not been in vain.
It will allow the widow whose sole source of retirement income is from
quota rent and Social Security the opportunity to get a fair return in
exchange for the taking of her quota. It will allow young farmers who
want to continue to produce the opportunity to compete in the world
market--and compete very well because of their skills.
Let me bring a little more perspective to the buyout of quota. This
program was created in the 1930s. Right or wrong, the Federal
Government has allowed quota to be bought and sold. Rather than
investing in stocks and mutual funds, as many Americans have, tobacco
farmers and their spouses have invested in quota over the years to
prepare for their retirement. But they never predicted this massive
change in the environment for tobacco that has led to such a steep
slash in quotas. And how could they? Unlike a stockholder whose shares
lose value if the market tanks, the quota holder has lost not only the
value from this steep decline in quotas but the quota itself--for good.
Unlike the stock market where time is a prudent investor's best friend,
those who have invested in quota will never get that investment back.
In the legislation we are introducing today, the Federal tobacco
program is eliminated. Quota owners are compensated for their
investments--for the taking of their asset--just as the owners of the
peanut quota were compensated with the peanut quota buyout in the 2002
farm bill.
Traditional producers are provided direct payments over a 6-year
period in order to allow them to better transition into this new
marketing environment--again, mirroring what Congress provided for all
program crops under the 2002 farm bill.
There is no recreation of price supports or a new quota program.
Rather, this legislation keeps tobacco production in traditional areas
and on a traditional level of acreage while allowing private industry
to develop insurance products so farmers will be better able to manage
their price risk in the free market.
Perhaps the most important point for my colleagues in the Senate:
Every penny that this buyout will require is
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paid for in full by all manufacturers and importers that sell tobacco
products in this country.
Status quo is simply not an option. If nothing happens this year,
many of these farmers will be forced to give up all they have. After 6
years of loaning on collateral, there is nothing left for the banks to
do except foreclose. There will be no holding out for just a little
while longer. This may sound like rhetoric to some but it is the
precise truth for countless numbers of farm families. The lenders who
call my office confirm it. Status quo is simply not an option.
I thank Senator McConnell and his staff for working so diligently to
address this issue. It is vitally important that this legislation is
achieved this year.
I am grateful, indeed, for Senator McConnell's commitment and Senator
Bunning's commitment to making this a reality. I look forward to my
continued work with them and all the other tobacco State Senators on
this important legislation. It is either now or never. Many livelihoods
hang in the balance, and with it the future of rural communities in
North Carolina and other tobacco-producing States. These rural
citizens, the very ones who have helped make this country great, have
been caught in a battle between corporate interests, some greedy trial
lawyers, and those whose true desire is to ban tobacco from the face of
the Earth. Let us allow these farm families who have been trapped in
this battle to move on with their lives. They deserve it.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Kentucky.
Mr. McCONNELL. Mr. President, I thank the Senator from North Carolina
and the Senator from Kentucky for their important contributions to the
development of this legislation. I also want to make clear to our
colleagues this is a bipartisan bill. Senator Edwards of North
Carolina, Senator Hollings of South Carolina, Senator Miller of
Georgia, and Senator Bayh of Indiana are also cosponsors. In fact,
there are 13 cosponsors of this important legislation. This is critical
to our section of the country. We are going to work as intensely as we
can to achieve the result for which our farm families are hoping.
With that, how much time remains on this side?
The ACTING PRESIDENT pro tempore. The Senator from Kentucky has 7\1/
2\ minutes remaining.
Mr. McCONNELL. I will reserve that time. I yield the floor.
The ACTING PRESIDENT pro tempore. Who yields time? Who yields to the
Senator from Pennsylvania?
Mr. McCONNELL. I will be happy to yield such time to the Senator from
Pennsylvania as he desires.
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