Smoke and fire are rising again over Capitol Hill, heralding a new skirmish in the tobacco-subsidy war that was supposed to have ended once and for all last year.
Tobacco growers weathered an all-out attack by free-market advocates and antismoking forces on their controversial price-support program. They agreed to changes aimed at ending federal subsidies and modifying a growing-franchise system the critics called "feudal."
The critics were mollified by changes that required tobacco farmers rather than the Treasury to underwrite any losses in the program, by slight changes in the acreage-allotment system and by new authority for the secretary of agriculture to hold down price-support levels.
But the changes aren't working, and tobacco-state legislators who promised that the 1982 revisions would end the controversy are back again, hats in hand, looking for more help from Congress.
The billion-dollar flue-cured and burley industries of the Southeast are plagued by oversupply and falling demand, high price supports that make imported leaf more attractive to cigarette companies, and new complaints about the allotments that give non-farmers a lucrative role in the program.
And another group of legislators, led by Rep. Thomas E. Petri (R-Wis.) and Sen. Thomas F. Eagleton (D-Mo.), is waiting in the wings, eager to take on the tobacco program again. Petri, backed by a coalition of major health organizations, recently introduced a bill to kill the program and return tobacco to a "free market" basis.
"We are a little more optimistic than last year," Petri said. "We are trying to go after the program on its lack of merit. It can't be defended on its own ground. I still can't understand why little old ladies in Florida allotment holders should be paid by farmers growing tobacco in their fields."
Petri and Eagleton, among others, described the allotment as a device that added to the production costs of tobacco, making it less competitive with increasing amounts of imported foreign leaf and reducing U.S. markets abroad. The U.S. market share overseas has gone from 64 percent to 39 percent in about a decade.
What makes the battle different this year is that the usually united lawmakers from Tobacco Road are squabbling among themselves and jockeying for political position as Rep. Charlie Rose (D-N.C.) prepares to run the the legislative gauntlet one more time. Rose has begun a series of hearings with his Agriculture tobacco and peanuts subcommittee as a prelude to a bill that would freeze price support levels and bring new pressure on non-farmers to give up the government-granted allotments that they rent to farmers.
But Senate Agriculture Committee Chairman Jesse Helms (R-N.C.) apparently is having none of it. He said, "There are problems with the program, and it is a matter of great concern . . . . But the North Carolina Farm Bureau and most farmers I talk with don't want any legislation in Congress this year.
"The reading as of now is that we should not reopen this in the Congress," he said. "I am pleading with all sides to help restore integrity to the program. There has to be unity in the tobacco family--and even with that, it's not certain we could hold off the critics in Congress."
Helms was quoted recently in the North Carolina press as calling Rose a "Lone Ranger" who was going around "shooting his silver bullets into the air." Rose would say only that he "resented" the suggestion "that I should do nothing because of Helms' possible problems in the Senate with his colleagues."
Although Rose got the 1982 changes through the House with relative ease, Helms had trouble in the Senate. And after Helms' time-consuming filibuster against a highway-gasoline tax bill last December, GOP colleagues put him on notice that any more favors for tobacco would be out of the question. Helms and Rose have taken potshots at each other at home over who should get the political credit for saving the program. But buoyed by a Helms vote last year for a cigarette-tax increase, Democrats believe they can stop his reelection to the Senate in 1984 and elect instead Gov. James B. Hunt, a likely opponent.
Helms, meanwhile, is drawing fire from tobacco exporters in North Carolina for his support of other changes in the program that they regard as anti-private enterprise and a threat to important U.S. agricultural sales overseas.
Under pressure from Helms, Agriculture Secretary John R. Block last fall authorized the farmer-operated government marketing association for the first time to sell tobacco from federal stocks overseas, rather than going through exporters.
Helms also has pressed Treasury Secretary Donald T. Regan to raise import duties on certain types of tobacco, a move that critics say they feel will bring retaliation from abroad. Helms said he has "what amounts to a commitment" from Regan for a favorable Treasury ruling on the issue.
All of this has obscured the debate over the future of the tobacco support program. "Without changes, this program is going to self-destruct in a few years," Rose said after the first of his panel's hearings.
About one-fourth of last year's flue-cured tobacco crop, 260 million pounds, was not sold and went into the government-controlled loan pool. Farmers last year were assessed 3 cents a pound to cover interest and carrying costs of the pool but it wasn't enough. This year, the fee will be 7 cents, putting new price pressure on farmers. The burley crop in 1982 also was under stress. The burley pool took 268 million pounds--about a third of the record crop--under loan. Burley farmers, who paid 1-cent-per-pound fees, also will have to pay more this year.
Rose predicted that, as prices continue at high levels, as rents for allotments continue to increase and as the per-pound assessments are raised to cover potential losses, tobacco producers will rebel.
"Farmers will vote the program out--and that would mean great economic dislocation for thousands of people who have spent their lives nurturing tobacco," Rose said. "If the allotment owners who do not raise tobacco are not willing to recognize this and support us in reform measures, that may happen. We have to get the allotment holder--the non-grower--out of the picture somehow. He is going to have to sharecrop it or reduce his rents or simply lose the allotment. It's going to be difficult politically to do this, because these people vote, too."
The General Accounting Office said last year that the allotment system impaired competition and reduced farmers' incomes because of 25-to-90-cent-per-pound rents they were required to pay for the right to grow the tobacco. In 32 selected counties the GAO found that 68 percent of the allotment owners were not in farming.
"Nationally," said Petri, "there are about 500,000 allotment holders. That is one of every 400 Americans, roughly. It is a government income-support. No wonder it's so popular."