AFEW WEEKS AGO a multibillion-dollar buyout for U.S. tobacco farmers was a critical piece of a delicate legislative package that included giving the Food and Drug Administration reasonable regulatory authority over tobacco products and did not cost the public a dime. House Republicans have managed to transform this worthy public policy into an expensive corporate handout, paid for out of the public till and without any public health benefit.
The buyout bill has for some time been a priority of tobacco state legislators. It is designed to get rid of the antiquated "quota" system of tobacco farming, a Depression-era system under which farmers maintain the right to grow certain amounts of tobacco. As previously conceived, it was to be funded by the tobacco companies. The hope was that by merging it with the bipartisan FDA legislation, which is supported by both anti-tobacco activists and tobacco giant Philip Morris, tobacco regulation finally would win congressional approval.
Yet the bill that passed the House of Representatives as part of a flawed corporate tax overhaul is a disaster. It would cost nearly $10 billion in public, not industry, money. It does not contain the FDA provisions. And, it turns out, the buyout would not even protect the struggling small tobacco farmers in whose name it is being pushed. According to an analysis by the Environmental Working Group, the money would go disproportionately to the biggest farming interests, which have amassed large quota shares over the years. Sixty-seven percent of the buyout money, in fact, will go to less than 10 percent of farmers, who will average $144,414 a year in proceeds over five years. One company will receive an estimated $8.1 million. The bottom 80 percent, meanwhile, will get on average just over $1,000 a year.
The corporate tax bill will require many changes when it goes to conference committee. Among them must be making sure the buyout doesn't become a sellout. Either it needs to be complemented with the FDA legislation and a reasonable funding mechanism or it must be stripped out entirely.