[Congressional Record (Bound Edition), Volume 149 (2003), Part 15]
[Senate]
[Pages 20109-20113]
[From the U.S. 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

[[Page 20110]]

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 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 for 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

[[Page 20111]]

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.
  Simply 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 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

[[Page 20112]]

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.
  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.

[[Page 20113]]

  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 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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