Speeches - Stabilization Remarks

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At Tobacco Meeting, Etheridge Again Calls on Bush to end Federal Lawsuit Against Tobacco Industry
Remarks from the annual Flue-Cured Tobacco Stabilization meeting
May 25, 2001

"Good Morning. I always enjoy coming to your annual meeting because it allows me the chance to see so many old friends and make many new ones. Flue-Cured producers are a big family; and I must tell you, it is good to be back home after a busy week in Congress.

"As a member of the House Agriculture Committee, it's great to be here to talk with you about the issues important to tobacco growers across our great state. And I bet I can guess what has been topic number one among tobacco growers and quota holders for the past two weeks: the report by the President's tobacco commission. I know y'all are proud of Andy and Jimmy for the job they did as members of the Commission and for proudly representing the interests of flue-cured tobacco growers. I have seen their report; and if you haven't had a chance to read it yet, I highly recommend it. It is a solid piece of work.

"One thing that the report does particularly well is spell out clearly the reasons tobacco farmers are experiencing problems. The cigarette manufacturers are putting less and less U.S. leaf and more foreign leaf into their products made here at home. Plus, they are moving more of their production facilities overseas, and those facilities use even less U.S. leaf than is found in domestic production. Demand for tobacco products among American consumers has been slipping steadily since 1981. All of this has put growers between a rock and hard place.

In recent years, we watched our quota get cut for three years in a row and our income drop by half. "Now, flue-cured farmers face the experiment of contracting. Some of you here may have a contract; others of you don't want to touch them. Regardless of what position you are in, I know, many of us out there openly wonder whether in a couple of years there will be any more warehouses left, whether there will be any alternatives to contracting. This is the environment the Commission had to address when it tried to develop ways to assist tobacco dependent communities. Considering the tough prospects for tobacco growers in the future, it should come as no surprise to anyone that the Commission recommended a buyout.

"The buyout proposed by the Commission would provide for five years $8 per pound to every quota holder, $4 per pound to every grower who quits growing tobacco, and $2 per pound to tobacco growers who want to stay in the business. Owners of 1,000 pounds or less basic quota could receive their full buyout payment in the first year if they give up growing tobacco. For those continuing to grow tobacco, quotas would be substituted with production permits that would limit the amount of tobacco a farmer can grow. These permits would have no value and would not be sold, leased, rented or transferred. The federal tobacco price-support program would continue to exist for farmers. To finance the buyout, the Commission recommends increasing the federal excise tax on cigarettes by 17 cents.

"The commission's recommendation for a buyout of the tobacco quota holds merit. And I understand the Commission's dilemma of trying to find a pot of money to pay the billions of dollars necessary to buyout growers and quota owners. But I cannot support more tobacco tax increases, even for buyout. As an alternative, I recommend that the commission's recommendations for a buyout be funded through existing tobacco excise taxes, including the dime increase in the tax that went into affect in 2000 and the nickel increase in the tax that is set to begin in January. It may take a year longer to pay out all the benefits, but it would impose less of a burden on those farmers wishing to continue growing tobacco.

"The Commission also recommended that the Food & Drug Administration (FDA) be given authority to regulate tobacco products. Throughout my career, I have opposed and will continue to oppose letting the FDA extend its power to the farm - let there be no doubt about it. Now, the Commission says - point blank in its report - that is not what they want, and I believe them. However, I remain extremely concerned about the potential for unforeseen consequences of FDA regulation to farmers who choose to continue growing tobacco.

"What is the likelihood that new FDA requirements would trickle down to farmers and force them to make expensive changes to the way they grow, harvest or cure tobacco? Regulation ultimately could add new input costs to growing tobacco, and hence price many small tobacco farmers out of the business. The burden of proof of the benefits of FDA regulation rests with the supporters of regulation, whether they come out of the public health sector or the tobacco industry.

"For those of you who support a tobacco buyout, you must believe me when I tell you that - politically - it just might not be possible to gain support for a buyout in Congress without also granting the FDA regulatory authority over tobacco products. Members of Congress that represent primarily urban and suburban districts almost certainly will insist on linking the two together. As growers, you must decide whether FDA regulation is too high a price to pay to achieve the goal of a buyout. The Commission's report challenges us to fundamentally rethink the way we look at tobacco in America. If (pause) and I mean if, farmers decide to accept that challenge and want to move in the directions recommended by the Commission, I am willing to do my part by leading that effort in Congress.

"Before I conclude, I want to briefly touch on two additional issues. Almost four months ago, I called on Attorney General Ashcroft to end the federal lawsuit against the tobacco companies. As you know, this lawsuit not only threatens to put tobacco companies, and consequently tobacco farmers, out of business, but also threatens the funds that North Carolina receives through the settlement negotiated by Governor Easley.

"No decision on this matter has been made public by the U.S. Justice Department, so I again renew my call to both the President and the Attorney General to end this destructive lawsuit now, so farmers no longer have this threat hanging over their heads.

"And finally, I understand the Board of Directors of Stabilization voted to seek an adjustment in the tobacco reserve level from 100 million pounds down to 75 million pounds for 2002 and at 10% of the previous year's basic quota thereafter. Lowering the reserve level not only decreases Stabilization's costs on interest rates, storage and insurance decrease, but also reduces in the likelihood of quota cuts in the long-term. Changing this level requires an act of Congress. I promise you, I will work with my colleagues in the delegation to enact this change into law. As the representative from one of the largest tobacco producing districts in the country, I proudly fight for your interests and against the efforts of those who would threaten the livelihoods of hard-working, god-fearing Americans like you.

"You who work in tobacco are worth fighting for. You are some of the most honest and hardworking people I have ever known. You deserve the same chance to succeed and prosper as other Americans. You deserve to be treated fairly and not discriminated against. I'm glad you are continuing to fight for your right to produce and I intend to continue fighting for you. Thank you again for giving me the opportunity to talk to you today and have a great meeting."