[Public Papers of the Presidents of the United States: William J. Clinton (1998, Book I)]
[April 9, 1998]
[Pages 535-542]
[From the U.S. Government Publishing Office www.gpo.gov]
Remarks in a Roundtable Discussion on Tobacco in Carrollton, Kentucky
April 9, 1998
The President. Well, good morning, everybody. The first thing I'd
like to do is thank Mr. Lyons for hosting us, and thank all of you for
being here. I thank the members of the panel, and also I'd also like to
thank Governor Patton and Senator Ford and Congressman Baesler
for being here and riding down with me from the airport. And I thank
Lieutenant Governor Henry, your State
Auditor Edward Hatchett, Senate
President Saunders, Senator Blevins, Speaker Richards. And I want
to thank County Judge McMurry and Mayor
Welty, who came to meet me as well. And again,
I'd like to thank Melvin and Brett Lyons for hosting us here. And I thank all of you for being
here on the panel.
I know Secretary Glickman has already been
down this way and been doing some work, but I'd like to make a few
comments about where we are now in the evolution of this tobacco
legislation. The first thing I'd like to do is to say a special word of
appreciation to Wendell Ford. His work on
the tobacco bill that's now moving through the Senate I think has been
very valuable in trying to provide clear and certain protection to
tobacco farmers, to warehouses, to communities without compromising our
long-term goal of reducing teen smoking. And I really want to say that
he's been talking to me about this for years. He and Congressman
Baesler have done a very good job of pushing
your interests there in a way that is consistent with what we're trying
to do in reducing teen smoking.
I also ought to say that while I'm here, Governor, I think it's only fitting that I begin these remarks by
congratulating the University of Kentucky for winning the basketball
tournament. As you know, Hillary and I were in Africa and I was getting
up at amazing hours in the morning to watch these games. I had to watch
the championship game on a tape, but that was really good.
Let me also say to those of you who are here and to the many
thousands of people outside this warehouse that are listening to us or
will be watching this, I am well aware that the people who farm tobacco
and who work in this whole area have difficult jobs. I know that it's
family work, small farms, hand work, that there was a flood in '97 and,
the year before, blue mold which made the work more difficult, and that
there is a lot of uncertainty now among people in this community, as I
saw up and down the road all the way in here.
Last year, a settlement was announced between the tobacco companies
and the State attorneys general to try to settle all their lawsuits with
a set of agreements which would dramatically reduce teen smoking and
provide some reimbursement to the State governments and to the Federal
Government for the public health. But when that settlement was
announced, there was absolutely nothing in there that would protect
farmers in the event the overall volume of tobacco sales went down. And
so, when I announced my reaction to their proposed settlement and what
kind of legislation
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I would support in the Congress, I said that we had forgotten that and
that tobacco farmers deserve protection and that I would not sign
legislation that didn't have it in there. And I want to reaffirm that to
you today.
Yesterday, some tobacco executives indicated that they were going to
withdraw from the discussions with the Congress about legislation, but,
despite that, I want to tell you that I believe there's still a good
chance we can get comprehensive legislation this year that will not
leave the farmers behind. And again I want to say to them, we have no
interest, whatever, in putting the tobacco companies out of business. I
just want to get them out of the business of selling tobacco to
children.
And I think it's important--I think every American recognizes that
the tobacco farmers have not done anything wrong. You grow a legal crop,
you're not doing the marketing of the tobacco to children, and you're
doing your part as citizens. So what I want to hear from you today is
about what you have to say to me that you want me and every member of
our administration, every Member of Congress, and the country to know
about this issue and where we go.
But let me just clearly state again what my concern is. We know that
even though it's against the law in every State, 3,000 children a day
start smoking and 1,000 of them will have their lives shortened because
of it. That's my concern, overwhelmingly. But I do not want to do
anything in dealing with that concern which will not honestly take
account of the communities and the people and the families that are
involved in tobacco farming.
It seems to me that you have a big interest in actually seeing
legislation enacted as soon as possible if it provides adequate
protection for the farmers because then we'll be helping the children,
which I know you all want to do anyway, and we'll be doing it under
terms where you'll actually have some certainty there, where you'll
actually know what is going to happen, and you'll feel some level of
security. And if the structure of Senator Ford's proposal prevails, then it would, as I understand it,
would be consistent with the wishes of over 97 percent of the farmers in
this area which voted in the referendum that's required every 3 years to
keep the tobacco program intact.
So I've tried to get prepared, and I got an earful on the way down
here, as I always do, from Wendell and
Scotty and Paul,
and I thank them for that. So I'd rather spend the rest of the time just
listening to you. And I'd like to ask our host to open and maybe
explain--keep in mind, you've got several members of the national press
here, too, and they will be reporting this to the country as a whole.
And maybe, Mr. Lyons, it would be helpful if
you could just very briefly explain what goes on in this warehouse, as
if none of us knew anything about it, and how that fits with the tobacco
farmers and what your concerns are with the legislation now pending in
Congress.
There's a microphone. I think we can turn it up so you can speak
into it. If you want to sit, you can; if you want to stand, you can. Do
whatever makes you feel most comfortable.
[Melvin Lyons, owner of the warehouse, thanked
the President and gave a brief description of the warehouse and the
process for moving tobacco from farms to manufacturers.]
The President. I want to ask Mr. Kuegel to
talk next, but I want to point out, and we'll get into it because this
is one of the things that's important for the American people to
understand why we need the kind of approach that Senator Ford has recommended, that Mr. Baesler has a bill on in the House of Representatives.
You say that this will bring the farmers approximately $5,000 an
acre.
Mr. Lyons. Approximately.
The President. And what will be the net income to the farmer out of
that $5,000?
Mr. Lyons. It would vary. Some people are
more efficient than others--probably $2,000, $2,500.
The President. Now, Mr. Kuegel, you're the
president of the Burley Tobacco Growers Cooperative, and yet you've also
been involved with the Campaign for Tobacco-Free Kids. So why don't you
just comment--and bring that microphone over closer to you--why don't
you tell us a little bit about the economics of tobacco, what you're
trying to do, and how you believe that we can vigorously pursue this
Campaign for Tobacco-Free Kids and protect the interests of people whom
you are elected to represent.
[Rod Kuegel described efforts to work with health
groups to find common ground and described how Senator Ford's ``Leaf
Act'' would advance agricultural and economic development
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in Carrollton and protect the farmers from the tobacco companies.]
The President. And basically, it protects you by preserving the
structure of the program you now have, so that when the co-op buys the
tobacco, the farmers get the income immediately. The co-op holds the
tobacco in storage until market conditions support the release of
tobacco, its sale at an acceptable market price. Isn't that right?
[Mr. Kuegel concurred with the President's
summary and expressed concern about some of the other proposals in
Congress.]
The President. Well, based on what I understand--and I agree with
you about that--I want to just make sure everyone understands this--the
way the Ford bill works--and Wendell, if I
make a mistake, pipe in here----
Senator Ford. You can bet on it.
[Laughter]
The President. Poor, shy man. [Laughter]
The bill offers an up-front, generous buy-out proposal to people who
want to get out, and the assumption is that there will be some older
people or others who want to get out, and that would, therefore, reduce
the total number of producers. Then it keeps the program in place. Then,
if at some future date the demand goes even below that, there are
substantial transition payments and assistance payments offered to
communities, warehouses, and farmers.
And along the way, there are the kind of education and training
benefits offered that we provide, for example, to people that are
displaced when there are trade changes, changes in the American economy
caused by trading flows that may benefit the overall economy but
disadvantage people, so we owe them an extra bit of help to get started.
And I think there are two points to make here to those who would be
skeptical about the approach that is being advocated. The first and the
most important one is the one you've already said: At least to date, no
one has figured out how to tell a tobacco farmer with a straight face
that you should produce another crop and we will facilitate you getting
into alternative crop production. The average farm in Kentucky is how
big? Four acres, five acres?
Mr. Kuegel. Average tobacco production.
The President. Tobacco production; not farm, but tobacco production.
There is no known crop with the same income per acre. So if you were
going to pay somebody to transition, one of the things you'd have to do
is buy them all a whole lot more land. And I think that's a very
important point to make.
The second point that needs to be made is, if you dismantle this
program, you would not end the production of tobacco. You would end the
ability of all these family farmers to produce tobacco, and you would
probably create a structure more like what you see in some parts of
California, where the ultimate processor in California, food processor--
in this case the processor would be the cigarette companies--would
control the farming, and everybody would be a hired hand. And the income
would all flow up except for a salary.
Isn't that basically your conclusion of what would happen?
Mr. Kuegel. I don't think there is any
question that's what would happen. And it would be inevitable with
Senator Lugar's bill if it does away with our tobacco program.
The President. So I think it's very important for the Members of the
Congress, the members of the press, and people out in the country to
understand that we don't want to be guilty of the law of unintended
consequences here. What we're trying to do is improve the public health,
cut teen smoking, get enough money into this program to deal with some
of the larger health consequences in our society that have already
developed. But we need to think a long time before we break down the
structure that you see from the Cincinnati airport--which is in
Kentucky--all the way driving here. And I think it's very, very
important because I think this is a not very well-understood point.
I'd like to call on Amy Barkley next who is
the director of the Coalition for Health and Agricultural Development
and involves public advocates actually working with farmers to address
both the health and the economic issues. Amy, would you like to say
anything about what we're discussing here?
[Ms. Barkley thanked the President and stated
that health advocates had supported the tobacco program because they did
not want tobacco farmers to become employees of tobacco companies. She
said that while she was a firm supporter of stopping teen smoking, she
believed both goals should be reconciled to protect both the health of
our youth and the future of the tobacco farmer.]
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The President. Let me ask you a question that I didn't ask
Rod, and maybe anybody can feel free to comment.
One of the things that occurs to me is, if we allow this program to
lapse--let's suppose we have some version of the McCain bill. Now, the
fight is going on now in Washington with tobacco companies as they say
that it raises a lot more money from them than we had estimated. They
say it will raise the price of cigarettes even more than we had
estimated. They say it will cut consumption more than we had estimated.
Therefore, they say they will be at great risk, and it's inconsistent
with the original agreement.
And so we've got to work through all that. But one of the things
that--the provisions for the tobacco farmers get almost no notice, but
it occurs to me that if we were to abolish the program altogether, give
everybody some sort of a cash payment for their allocation, and then
just abolish the program, then what you think would happen I think would
happen--first of all, that there would be no restrictions on production.
And what I think would likely happen is there would be more tobacco
grown at a lower price, which would make it uneconomical for you so the
companies would take it over directly.
But from the point of view of our public health objective, if more
tobacco is grown at a lower price, that undermines our desire to make a
pack of cigarettes high enough in price that it will be part of what
discourages children from smoking.
It seems to me that that's the public health angle here that someone
like you, Amy--we need this highlighted from a public health point of
view so that people in the vast, vast majority of our country that don't
know anything about tobacco farming, don't have a dog in this hunt, and
don't understand it, and don't want to make sure we're not doing
something funny here, they need to understand that, ironically, if we
dismantle this program, we might undermine the goals of reducing teen
smoking.
I'd like to call on Mattie Mack now to talk
a little bit about this from the point of view of an individual farmer.
She's had an interesting family history on her farm, and I think I'll
let her tell it to you, especially since we've apparently gotten her a
local reporter in here. I hope we have. [Laughter]
[Ms. Mack stated that tobacco farmers should not
be penalized because children smoke and suggested that parents must play
a greater role in preventing their children from smoking. She described
her life as a tobacco farmer, the economic struggles and benefits, and
how she had raised her own 4 children and 38 foster children on the
farm, concluding that tobacco had made some good things possible.]
The President. You guys didn't oversell her. [Laughter] It was just
like you said it would be.
Let me call next on Karen Armstrong Cummings, because she's the managing director of the
Commodity Growers Cooperative, which develops markets for family farm
products. And they're interested in preserving the future of small
farms.
So how are we going to preserve the small farms and do something
about teen smoking? What options are there?
Could you give the microphone back, Rod?
[Ms. Cummings described her
participation in the Agriculture Department's National Commission on
Small Farms, which developed over 140 recommendations to get USDA's
policies focused on the family farm, and said that the tobacco program
was essential to the continued existence of family farms in the
Southeast.]
The President. Thank you. This is really not exactly the time or
place for this, but if you get beyond tobacco and you look at other
small farm issues, the reason this program has worked for small farmers
is that you've had--first of all, you've had an allocation system which
keeps the price within some bonds, although it varies still quite a bit
as all of you know, depending on weather conditions and other things.
And because you've got this co-op system that really works to give
the farmer cash money on the front end, even if the big tobacco
companies, cigarette companies don't pay you right away, the co-op will.
And I think we really need to look at this again. It's off the subject
we're here to meet about today, but before I leave office in 2001, I
really hope that we will have been able to set up an alternative
framework of policies that will enable family farmers who live in places
where this is not even an optional crop, where they've got to do
something else, and where they're doing what most tobacco farmers do,
they have some income from off
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the farm and some income from on the farm to be able to continue to do
that.
The whole theory behind this whole going to a completely free market
in agriculture was that you would get more efficient production. But the
truth is the family farmers that have been put out of business, by and
large, have not been put out of business from inefficiency of
production; they have been put out of business because they didn't have
enough cash to stand the bad years. At least that is my belief. That is
what I think based on my experience in a totally different agricultural
environment.
[Ms. Cummings stated that the whole
issue of access to capital and the lending system needed to be reviewed,
and noted that her organization recommended a Presidential commission to
look at market concentrations in the agricultural sector.]
The President. If you look at how you sell cattle or, especially,
how increasingly hog operations are going and you compare that to how
the tobacco co-op works as a buyer of last resort, so that the cash is
transferred to the farmer immediately and someone else basically is
holding the crop until it can be sold and paying the price of holding
the crop--I mean, it gives you some idea of what--it would be good if we
could figure out a way to do.
Now, it's very different with live animals you still have to feed,
you still have to--they don't warehouse too well, and you still have to
feed them. So I don't--none of these issues are simple. If they were
simple, we wouldn't have to worry about them. But I do think you made a
good point.
And I want to get back to the subject at hand, but I promise you
I'll spend some time on this because it's very important to me to see
that we don't lose every small farmer in America just because of the
structure of the money economy, the finance economy, as opposed to the
efficiency of the operation. I'm not interested in protecting any
inefficient operators who can't compete, but I have seen enough crops
come in now over the course of my life in enough different areas to
believe that it's more the way the money economy is structured and the
way the products are brought to market than the efficiency of the farmer
that's changed the structure of farming.
The reason you've got all these small farmers here is you've got the
allocation, the limited production, and the cooperative buyer. I believe
that.
Mr. Sprague, do you want to go next? You're
the president of the Kentucky Farm Bureau, and I understand you're a
fifth generation farmer. And you have 3,000 acres of crop; that makes
you a big tobacco farmer--it makes you a small rice farmer in Arkansas
and a big tobacco farmer in Kentucky. [Laughter]
[Bill Sprague stated that tobacco generated $1
billion worth of income for Kentucky farmers and 3 or 4 times that much
as it moved through the economy. He indicated that the present situation
regarding tobacco created uncertainty in the whole tobacco industry and
said that the Nation needed a policy at the national level that would
give stability to the industry.]
The President. Let me, if I could--and I would invite--I know I've
got two more panelists I want to call on, and I would invite any of you
to kick in. You have stated a sort of summary of where you are and where
you think the farmers are so well, I think it might be worthwhile to go
back to the beginning here.
Let's remember how this whole thing came up. There were two things
going on. First of all, the Federal Food and Drug Administration opened
an inquiry and found, as a factual matter, that there was an effort made
to market tobacco products to young people, that it was not only against
the law but it was likely to become more addictive to them if kids
started smoking when they were young rather than if they started after
they were adults when they might use it more in moderation and all that,
and that the health consequences were considerable. That was the
finding.
Simultaneously, they had a number of States that filed suits against
the tobacco companies, claiming that they had marketed cigarettes to
children in violation of the law all these years, and that that had led
to not only injury to the individuals, but vast costs to the States
through their medical programs. And then there were the private
lawsuits, the people that got lung cancer and all.
And all these things came together, and the tobacco companies and
basically the State attorneys general and the representatives of the
private plaintiffs came up with their proposed settlement in which they
agreed, among other things, to pay more money to defray some of the
health care costs, to run up the price of
[[Page 540]]
cigarettes some to make it less attractive, and to reduce--change their
advertising practices.
But in order to get all that done comprehensively, they had to pass
a bill through Congress, because they also have to deal with the Federal
Food and Drug Administration program. So now we're in a situation where,
as you pointed out, there are lots of different agendas here and lots of
different things going on.
I do believe, however, that there is a bipartisan majority of people
in the Congress in both Houses, in both parties, who honestly just want
to do as much as they reasonably can to reduce smoking by young people
as quickly as they reasonably can, in a way that does not put the
tobacco companies out of business and, even more important to most of
us, is not really unduly unfair to you.
So what you're saying to me is that right now the uncertainty is the
worse enemy you have and what we need is to get this thing done in
Congress this year, do it in a way that achieves our goal of driving
down teen smoking as much as we can, as fast as we can, and let you know
what the rules are.
Now, let me ask you just specifically--I mean, I assume you believe
this, but you didn't say it explicitly--it seems to me that the greatest
balance of certainty for the farmers in our efforts to reduce teen
smoking is in some version of what Senator Ford has proposed. That is, if you assume that--let's just
assume that through whatever means the American Medical Association, for
example, says that because there are so many kids out there more or less
on their own, that the advertising has a bigger impact on inducing kids
to start smoking even than peer pressure does. So if you assume all
that, then it seems to me the best proposal is something like--something
that would offer a buy-out that is generous and fair and adequate to
people that want to get out because there is no easy substitution, as
all of you have said.
Then for all those that don't get out--because you assume that if
all the kids start--if you cut teen smoking in half, then, within some
number of years, the aggregate demand for tobacco in America will go
down. So some people get out, and you pay them a legitimate price to get
out; then the other people who are still in operate under a program that
controls production and gives the family farmers a chance to survive.
That's basically what Wendell wants to do.
And in addition to that, since maybe there won't be enough people
get out for the market reduction--we don't know that--it also provides a
structure within which you get aid to warehouses, aid to communities,
and aid to individuals for continuing education and training, as I've
said, just the same way we would with people that are dislocated from
trade. If we pass something like that, is that the best thing to do? I
mean, is that basically what you would recommend that we do?
[Mr. Sprague said that he believed so, but that
about half the tobacco grown was for export and that efforts to reduce
exports would be detrimental to farmers. He indicated he would like to
see the exports continue.]
The President. Okay. Marissa, would you
like to talk a little bit about how you view this issue?
[Marissa Vaught, whose grandmother died of
cancer, expressed her opposition to youth smoking but said raising taxes
on cigarettes would make it harder for people from Kentucky to put food
on the table.]
The President. What do you think the most effective--I should say
that Marissa is, I think, a junior at Carroll
County High School; is that right? What do you think the most effective
thing we could do would be to reduce teen smoking? Let me just say,
there are lots of people who think the most effective thing you could do
is just make cigarettes a lot more expensive. There are other people who
think the most effective thing you can do is to stop the cigarette
companies from doing any advertising that could be specifically or extra
appealing to young people. Then there are people who think that there is
nothing you can do except to try to get the parents and the religious
leaders and the community leaders to try to teach kids not to do it in
the first place.
What is your sense of what the most effective thing that we could do
to discourage your peers from beginning to smoke?
[Ms. Vaught suggested it would be helpful to
show the positive side of not smoking, rather than to stress
punishment.]
The President. Do you believe that most teenagers actually do know
and believe that it is dangerous?
Ms. Vaught. I do believe that they
actually do. But sometimes people really don't care.
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The President. When you're 16 you think you're going to live
forever, don't you?
Ms. Vaught. Exactly. They don't know----
The President. I did. [Laughter]
Ms. Vaught. ----that it's going to hit you. Consequences are hard,
and they do come fast and slow. They think they're going to live
forever, and I'm going to die anyway. But it's how you die that is
important. I think that your health and safety is important, especially
on teens.
The President. So you think if we could--that's what Bill said. He
said, if his daddy gave him $1,000 if he didn't smoke by the time he was
21----
Ms. Vaught. Yes, that's positive incentive.
The President. So you think a positive--some sort of positive
incentive program would be effective?
Ms. Vaught. Exactly. I do think that. It
worked for you, obviously. It works for teens.
The President. Thank you.
Dr. William Goatley is the pastor of the
First Baptist Church in Eminence, Kentucky. I thought we ought to give
him a chance to say whether he thinks the religious community should
have any role in this whole issue.
Doctor?
[Dr. Goatley said that tobacco was a way of
life, providing a livelihood for people in Kentucky, and that part of
the solution had to be an alternative livelihood. He said the President
should continue his crusade against youth smoking.]
The President. Thank you very much. That was a very moving statement
to me. No one knows exactly why, but, for whatever reason, we know that
teen smoking has, in fact, been on the rise. And the overwhelming--I say
again, we can't lose sight of the big issue; the overwhelming evidence
is that 3,000 children begin to smoke every day, and 1,000 of them will
have their life shortened because of it, and that the rest of us as
taxpayers will pay enormously for them. But the most important cost is
human, not economic.
And the question is whether we can pursue a reasonable course to
deal with that and deal with the human reality of the livelihood and the
life and the structure of life that all these fine people have been
talking around the table and have described today.
I think the answer is yes. And as I said, I think, ironically,
trying to preserve the structure will actually--since no one suggested
tobacco is not a legal crop and that adults should not be free to buy
it, that that is not a position advocated by anybody--nobody's
advocating prohibition here--ironically, it seems to me, that our
objectives in reducing teen smoking by making it both more expensive and
less attractive in other ways, and dealing with the advertising is
actually furthered by preserving this program because it will reduce
production and keep the price up.
If you abolish the program, you put a lot of these folks out of
business, but you will not reduce production. You'll probably increase
production, lower the price of tobacco and, therefore, make cigarettes
cheaper, notwithstanding whatever we do with the tax or a voluntary
payment or whatever we wind up calling it when Congress acts.
So anyway, I thank you for that. Secretary Glickman, would you like to say anything?
[Agriculture Secretary Dan Glickman described
his visits to Kentucky and efforts underway to deal with the situation,
saying that he was considering economic development options rather than
alternative crop programs as a significant part of the solution.]
The President. Let me just make one other request of all of you. I
will certainly try to do what you've asked me to do; that is, I'm going
to do my dead-level best to get the legislation passed this year that
will not only dramatically reduce teen smoking, but will provide some
certainty to you and some legitimate protection for the tobacco farmers
and the warehouses and their communities. So I will try to do that.
But let me ask you to do something, because you've really piqued my
interest here, both what our pastor said and what Marissa said, what you
said, Bill, what you said, Mattie, about parents' responsibility. I have
spent quite a bit of time with young people's groups, the youth
organizations all over the country, from New York City to small towns in
California, of young people who are organized to try to get their peers
not to smoke and who also often go from store to store to store to test
whether the sellers of cigarettes are actually even making modest
efforts to do anything about it.
[[Page 542]]
And I respect that because I think it's wrong to put all the
responsibility here on the manufacturers. It's not like these children
and their parents and their families and their schools and their
churches are just ciphers that have no will, have no knowledge, have no
nothing. I mean, they get up every day and go through life, too. And I
wish you would give some thought to--as a practical matter, I don't know
that the Government could offer every 18-year-old $1,000 on their 18th
birthday if they could prove they never smoked a cigarette, but there
may be some other things we could do in the area of getting young people
to assume more responsibility and providing some rewards and doing some
things that we haven't thought.
And Marissa, the other thing, we may not have been as creative about
that whole element of this as we can be, and I'd be willing to think
about that.
Ms. Vaught. There is a teacher who talked
to me about this, and he said maybe college scholarships for nonsmokers,
maybe a non-smoking scholarship for students who happen to do well in
school and are non-smokers.
The President. We'll look at that. We'll figure out what the cost of
that would be. You may be right; it may be cheaper than some of the
other stuff we're doing. [Laughter] I'll do that, I'll look into that.
You were great all of you. Thank you very much. Let's give them a
hand. Weren't they great? [Applause] Very impressive. Thanks.
Note: The discussion began at 11:08 a.m. at the Kentuckiana Warehouse.
In his remarks, the President referred to Gov. Paul E. Patton and Lt.
Gov. Stephen L. Henry of Kentucky; State Auditor Edward B. Hatchett,
Jr.; Senator Larry Saunders, president, and Senator Walter Blevins, Jr.,
president pro tempore, Kentucky Senate; Representative Jody Richards,
speaker, Kentucky House of Representatives; Gene McMurry, Carroll County
judge; Mayor Bill Welty of Carrollton; and Melvin and Brett Lyons,
owners, Kentuckiana Warehouse.