|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Issues >Agriculture
> Printer Version $840
million
The U.S. Department of Agriculture (USDA) provides financial assistance to tobacco producers through price supports, non-recourse loans, crop insurance, research services, and most recently, direct payments. First established in 1933, the tobacco program stabilizes tobacco prices above market prices by setting production quotas that limit the quantity of tobacco farmers are allowed to grow and bring to market. In addition, federal price supports for tobacco farmers are guaranteed through "non-recourse" loans that allow farmers to use the crop as collateral and to forfeit that crop rather than paying back the loan. Under
a "no net cost" requirement enacted in 1982, growers
and manufacturers are required to contribute to a fund that covers
losses resulting from loan program operations. This program was
established to ensure that the federal government was not losing
money through the price support and loan system. However, administrative
expenses to run the loan program are not covered by this fund.
Green
Scissors Proposal Current Status Two provisions in the fiscal year 2001 Agriculture Appropriations bill (H.R. 4461) expanded existing subsidies to tobacco farmers. The first allows holders of tobacco quotas to receive program payments even if they transfer their rights to produce the crop to other farmers. This provision will cost taxpayers $3 million. The
second provision allows tobacco cooperatives to buy low quality
tobacco (called Burley tobacco, which is grown in Kentucky) that
has not been bid on by cigarette companies and then sell this
inferior tobacco to the government at inflated prices. This measure
waives the no-net cost provisions for tobacco for the 1999 crop
and will cost the government $100 million for each of the next
five years during which a tobacco crop is marketed, for a total
of at least $500 million. Moreover, the provision blocks the
government from selling the tobacco in the United States, for
fear of displacing sales by private farmers. Thus, taxpayers
will be left with an expensive, useless investment in a product
that the federal government is actively discouraging the use
of for health reasons. The federal government should not be in the tobacco business. This subsidy supports expanded tobacco production at the same time that the federal government is spending millions actively discouraging the use of tobacco for public health and safety reasons. For the first time, federal taxpayers are directly paying more than $340 million to tobacco farmers to make up for lost income because of low prices and tobacco litigation settlements. These direct payments are in addition to subsidies in the form of tobacco crop insurance, administrative costs for price supports, and non-recourse loans.
Program Hurts the Environment Tobacco use causes 430,000 deaths per year in the United States, according to the Centers for Disease Control, including deaths from cancer, lung disease, stroke, and coronary heart disease. Moreover, smoking costs the economy at least $100 billion in health care and lost productivity. Tobacco farming is also
extremely chemically intensive, in part because it depletes soil
nutrients at a heavy rate. Soil on which tobacco is grown consequently
requires large amounts of fertilizers. In addition, more than 25 million pounds of pesticides
are used on tobacco crops each year, according to the U.S. Geological
Survey, including more than 1 million pounds of methyl bromide,
a neurotoxin that depletes the ozone layer, and 12 million pounds
of 1,3-D, a probable carcinogen. These pesticides pose a risk
not only to farm workers but to surrounding communities as well,
because the chemicals can leach into groundwater or vaporize
into the air.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|