Peering down like judges from their high bench, the members of the International Trade Commission (ITC) seemed a bit amused, but Rep. Charlie Rose (D-N.C.) went ahead with the introductions anyway.
"My dear friend," is how Rose presented his companion at the witness table. The congressman's pal was a neatly potted, bright green tobacco plant.
Rose's dear friend was making a special appearance in Washington that day last week because the folks from flue-cured tobacco country are pulling out every stop in its defense.
The tobacco plant is in big trouble in Congress these days and needs whatever help it can get. Spurred in part by mounting problems in the federal price-support program and in part by the Reagan administration's proposed free-trade philosophy, controversy is roaring around tobacco.
This controversy is unlike anything the industry has seen since the smoking-and-health issue flared up in 1964. In the past, the issue was health, which it still is. But now, more than at any time in history, Congress is also raising serious questions about the federal support system itself, and the leaf's southern champions are on the defensive.
Rose was at the ITC urging that limits be placed on imported tobacco, which officials in the Carolinas and other flue-cured tobacco-growing states in the South claim is ruining American farmers. Even though U.S. exports far exceed imports, the blame for problems here is being aimed at foreign growers.
On a variety of fronts, the small-arms fire directed at tobacco and the federal price-support program that props it up is gaining momentum. Here are some examples:
The ITC, after hearing two days of testimony, must rule by Aug. 14 on a request by growers and the Department of Agriculture that quotas on foreign flue-cured tobacco be established to prevent further undermining of the price-support program. Many experts fear that quotas would invite retaliation against other U.S. farm products by other countries.
USDA conceded that despite efforts to curtail U.S. production to keep supply in line with demand, more and more low-grade leaf is going into the federal loan pool, raising the prospect of losses of $123 million or more to taxpayers from tobacco that can't be sold. Future crops are not factored into that estimate.
Rep. Thomas E. Petri (R-Wis.) has introduced legislation in the House that aims at abolishing the federal price-support program. The bill faces an uncertain fate, but Petri is pushing the Reagan administration's free-market and anti-regulation line, saying that the program has outlived its usefulness. Petri will attempt to attach his measure to the pending farm bill.
Sens. Howard M. Metzenbaum (D-Ohio) and Thomas F. Eagleton (D-Mo.), prompted by an earlier Senate roll call on which 44 senators went against tobacco, are preparing new legislative efforts to kill or shrink the program. They hope to raise the subject when the Senate begins debate on its four-year farm bill after the Fourth of July recess.
Two of tobacco's chief defenders, North Carolina Republican Sens. Jesse Helms and John P. East, recently put out an unusual notice, construed by some around the Senate as a direct threat, that any further tampering with the tobacco program could lead to action against other farm commodities in which the 44 dissenters are interested.
Even within the once-solid front of flue-cured and burley tobacco legislators, fissures are showing up. A break for flue-cured farmers, engineered by Helms and Rose, exempting them from new payments for federal grading this year, rankled the burley people. Burley failed to win a similar exemption from the grading fee for 1981.
Underlying all of this back-and-forth is the price-support program, established in the 1930s to regulate production and set a floor under prices to assure farmers an adequate return for their crop.
Generally, most agriculturalists agree, the program has worked well, costing taxpayers far less than the other major federal commodity price-support loan programs. Growers have agreed from time to time -- including four of the past six years -- to reduce production to keep the support program in balance.
But U.S. flue-cured tobacco, the major component of cigaretts, has experienced a gradual erosion of its world market dominance during the past decade, even though global demand has increased. Imports of less costly foreign flue-cured tobacco, meanwhile, have about doubled during that time and American cigaretts' foreign component has grown from 11 percent in 1965 to about 30 percent last year.
As the cheaper imports have come rolling into this country, more and more U.S. tobacco has been put on loan with USDA's Commodity Credit Corp. (CCC). In his testimony before the ITC late last month, USDA's Hoke Leggett conceded that much of the leaf in the federal pool is of such low quality that its prospects for being sold to manufacturers are slim.
Tobacco-state legislators' response to this growing problem has been to blame the imports for throwing a monkey wrench into the U.S. support program. The ITC probe, to determine if the support program is undermined by imports, was requested by former president Carter, two days before he left office, as a favor to North Carolina Gov. James B. Hunt Jr.
The Carter request added up to a hot potato for the incoming Reagan administration. As a candidate, Reagan expressed support for the tobacco program. As president, he espouses free trade. As a politician, he must balance wishes of his farmer-supporters and such congressional figures as Helms, chairman of the Senate Agriculture Committee.
In that context, the administration sent Leggett before the ITC with the apparently contradictory but official call for the imposition of import call for the imposition of import quotas. The ITC will make its ruling in August, which Reagan can then accept or reject.
USDA and farm groups from the flue-cured states argue that the quotas would be used only as temporary relief while the CCC works to unload the growing stocks of unsold tobacco in the loan pool. Tobacco traders consider this an iffy prospect. They say much of the unsold leaf is of such poor quality, with potential for deteriorating further in the warehouses, that it will be difficult to sell.
Throughout the increasing debate, USDA and the tobacco-state senators have carefully skirted a major underlying difficulty in the federal support program, the practice of nonfarming landowners leasing their government-granted tobacco allotments to the farmers who actually grow the leaf.
Standard lease rates average between 40 and 50 cents a pound, according to some estimates, which means that a typical flue-cured farmer, averaging around 2,000 pounds per acre, must pay a rental fee upwards of $1,000 per acre for the privilege of growing tobacco. No one, including USDA, knows for certain how much flue-cured acreage is leased.
Critics of the price-support program contend that this additional production cost impairs the farmer's ability to compete with the lower-cost foreign tobacco, which comes mostly from Brazil and Thailand.
"This allotment system is an anachronism, an aspect of feudalism," Petri said. "It is a franchise, an unfair advantage given to people who had ancestors fortunate enough to be growing tobacco at the time the program was set up.
"We've got to get more competitive as a country. We have to tear down the government barriers to competition and this one, in tobacco, is a barrier that we can't afford to retain," Petri said.