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SC Farm Bureau President Applauds Congress for Passing Tobacco Buyout Plan Washington, D.C. – SC Farm Bureau President David Winkles, a Sumter County Farmer, said Monday, October 11, 2004, he is pleased Congress passed a bill that includes the long awaited tobacco quota buyout plan. “South Carolina Farm Bureau leaders and our Congressional delegation have worked hard to see this plan come to fruition. Our tobacco farmers have struggled under the pressure of not knowing what their futures held. Now, they know. If the President signs the bill into law, our tobacco farmers will be able to make plans with some degree of certainty,” Winkles said. Winkles, who was in Washington during the week the conference committee debated the specifics of the buyout, was able to meet with a number of Congressional leaders asking them to resolve the matter before their election-day recess. “I knew that if Congress waited until they came back from their election recess they would not be motivated to act on any type of buyout plan. There are those who say we should have waited and held out for more, but my experience with government has typically been the longer you wait, the less your chances are of coming away with anything.” The tobacco quota buyout was inserted into a complex corporate tax bill. Different versions of the bill passed in the House and Senate before a conference committee, led by House Ways and Means Committee Chairman Bill Thomas of California, worked out a compromise in the final week before the Congressional election-day recess. The compromise included provisions for a tobacco quota buyout without any provisions granting the FDA the authority to regulate tobacco products. Winkles said, “Essentially what Congress did through their vote was eliminate the long-time federal tobacco quota and price support program.” Under the bill, quota owner payments are $7 per pound multiplied by 2002 basic quota. Grower payments are $3 per pound multiplied by 2002 effective quota. The buyout is funded by assessments on tobacco product manufacturers and importers. Payments will be made in 10 equal annual installments from 2005 through 2014. In exchange for the buyout, phase II tobacco payments will be terminated. There are no provisions in the bill that would provide a post-buyout safety net for tobacco growers or geographic restrictions on future tobacco production. The most recent statistics for South Carolina grown tobacco (2002) show 30,500 acres of tobacco were planted producing nearly 59.5 million pounds. That was down from the previous year’s 78.4 million pounds of tobacco produced. The highest production year was 1955 when farmers grew 197.2 million pounds of tobacco.
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