Etheridge Hails House Passage of Buyout Legislation

WASHINGTON - U.S. Rep. Bob Etheridge (D-Lillington) today applauded the passage of tobacco buyout legislation in the U.S. House of Representatives as part of H.R. 4520, the American Jobs Creation Act of 2004. The legislation, which passed by a vote of 251 to 178, now faces a vote in the U.S. Senate and a conference committee.

"Today's House passage of tobacco buyout legislation is an important first step to give struggling farm families an honest chance to survive. But, we have a tough row to hoe in the Senate and with the White House, and farmers have to keep up the pressure. Today I reminded Chairman Thomas of the advice ancient Spartan women gave to their sons before a battle, 'Come back with your shield, or on it.' The conference committee better come back with this buyout or not come back at all."

The buyout language included in H.R. 4520 would pay $7 to quota holders and $3 to growers based on 2002. It does not contain regulation of tobacco products by the Food and Drug Administration (FDA). The value of the buyout is estimated to be $9.6 billion, and it would inject billions into North Carolina's rural communities. The legislation would also preserve Phase II payments through 2010 estimated to value more than $3 billion.

H.R. 4520 is necessary to lift European trade sanctions by repealing an export tax break that the World Trade Organization has ruled violates international trade laws. The legislation must now go to the floor of the U.S. Senate and then move to a conference committee to iron out differences between the House and Senate bills. Ultimately, each chamber will have to vote on the legislation that comes out of the conference committee.

Several Senators have predicted a contentious conference committee, including Senate Finance Chairman Charles Grassley (R-Iowa). Senators Trent Lott (R-Mississippi), Mike Dewine (R-Ohio), John McCain (R-Arizona) and others have expressed their objections to including the buyout without FDA regulation.

Because of declining tobacco leaf purchases from tobacco companies, the federal government has reduced tobacco quotas by more than 50 percent since 1997, cutting in half the incomes of both tobacco growers and quota holders. A tobacco buyout would reform the current tobacco quota system, compensating tobacco quota holders for the elimination of quota and assisting tobacco farmers with the transition.