[Congressional Record (Bound Edition), Volume 150 (2004), Part 17]
[Senate]
[Pages 23307-23308]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          TOBACCO QUOTA BUYOUT

  Mrs. DOLE. Mr. President, this is a truly historic day! The tobacco 
quota buyout is a monumental achievement--and I am absolutely delighted 
for our North Carolina farm families and rural communities and those in 
other tobacco producing states.
  On their behalf, I am deeply grateful. Senator Mitch McConnell has 
been a stalwart ally, and his leadership was absolutely critical in the 
Senate. Sometimes it felt like David and Goliath! But persistence pays 
off!
  And thank you to Senate Finance Committee Chairman Chuck Grassley. 
Chuck was kind enough to let me track him down at Reagan National 
Airport as he was getting on a plane to Iowa--to stress the need for 
this long overdue legislation.
  I want to thank my colleague from North Carolina, Congressman Richard 
Burr. He cleverly laid the ground work that got the buyout into the 
FSC/ETI bill. It was Richard Burr's hard work that brought us to the 
point of success today.
  Also, I appreciate so much the efforts of Congressman Mike McIntyre 
on getting this bill through the House. He has been a real statesman in 
taking care of the needs of our constituents. And Richard and Mike 
could not have done it without the blessing of Chairman Bill Thomas and 
the House Leadership. Let me express my warmest appreciation to all of 
them.
  I also want to thank Senator Jesse Helms. Jesse worked so tirelessly 
for tobacco farmers and their families for 30 years during his tenure 
here in the Senate. He said then that achieving a tobacco buyout would 
be the hardest thing that he had ever tackled in his long career in the 
U.S. Senate. We are here today because he began laying the groundwork 
so many years ago.
  For his last 5 years, Jesse's right hand on tobacco issues was David 
Rouzer, and David has been my senior adviser as we have worked through 
this buyout.
  At a young age, David began working on his family's tobacco farm in 
Johnston County, NC. He understands the stress that tobacco farmers 
have been under, and he has labored tirelessly to get us to this day.
  I made the buyout a top priority when I arrived in the Senate because 
our tobacco-producing communities have suffered terribly--terribly--in 
recent years. The rigid Government program created in the 1930s was not 
designed for the intense world competition of today. It was not 
designed to withstand the consequences of the master settlement 
agreement.
  In past years, our farmers led the world in tobacco production. Now 
they account for only 7 percent of flue-cured tobacco sold worldwide. 
The time has come to end the last of the Depression-era farm programs. 
Our farmers want to operate in a free market.
  As the U.S. market share of tobacco has slipped, the quota system, 
with its price supports, kept U.S. producer costs artificially high. 
These high prices led to tobacco imports from lower cost countries, 
such as Brazil and China. Under the current tobacco program formula, 
the decline in demand for American tobacco produced a cut in quota, the 
amount of tobacco a farmer can grow and sell.
  In just the last 5 years, the tobacco quota has been cut almost 60 
percent. That is the equivalent of cutting your paycheck by 60 percent. 
There is not a business in America that would not take a serious hit 
with a 60-percent cut in revenue. And according to agricultural 
economists, these farm families were about to get an additional 33-
percent cut in quota for the 2005 crop-year. These cuts have had 
profound impacts on North Carolina's tobacco communities. For almost 70 
years, the U.S. Government-issued tobacco quota was something you could 
take to the bank, literally.
  Under permanent law, they could expect a yearly return on investment. 
Farmers used it as collateral for loans in order to put the next year's 
crop in the field. Families handed quota down from generation to 
generation. That paid the death tax as part of keeping family farms 
alive. Widows have counted on quota as an investment to supplement 
their Social Security.
  By buying out these quota holders, we give families the option of 
retiring with dignity. We give them the ability to pay off the banks 
for loans made against an ever-shrinking collateral. By getting the 
buyout done before the next quota cut, literally thousands of families 
in rural North Carolina will be saved from bankruptcy.
  Rather than having to quit the farm, this buyout gives our farmers 
the ability to compete in the free market, and if farmers want to 
continue to grow

[[Page 23308]]

leaf, they can compete worldwide without the artificial cost increase.
  Many will also use this opportunity to invest in new equipment and 
transition to other crops. This tobacco buyout will help not only the 
farmers and their families, but their hard-pressed communities. It is 
the retailers, equipment dealers, chemical and fertilizer dealers, and 
a whole array of small local businesses that will also benefit from the 
tobacco buyout. These are the very small businesses that create the 
majority of new jobs in tobacco-producing States--jobs that are much 
needed.
  With our action today, we come to the end of an era in tobacco 
policy. We stop conceding tobacco production to countries such as China 
and Brazil. We stop foreclosures to thousands of farmers, and we stop 
the negative economic ripple effect throughout rural communities in the 
Southeastern States. For that, we can all be extremely proud.
  To those who have worked so hard on the tobacco quota buyout, on 
behalf of the thousands of farm families in North Carolina and 
throughout the Southeast, a heartfelt thank you. What has been 
accomplished is a legislative miracle and a monumental achievement. It 
has been a great privilege to work with you.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. Cornyn). The Senator from Massachusetts.
  Mr. KENNEDY. I ask the Chair--I believe I have 30 minutes--when I 
have 2 minutes left to notify me.

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