More than two-thirds of the $9.6 billion tobacco-grower buyout approved by the House would go to only 10 percent of the people and companies eligible for any compensation, according to a study by the nonprofit Environmental Working Group.
The buyout of tobacco growers and holders of government "quota" rights to market tobacco would give at least $1 million to 463 companies, individuals or estates, the report found, and would provide more than $8 million to one North Carolina company.
The study, based on information from the Department of Agriculture obtained through the Freedom of Information Act and scheduled to be released today, showed that the overwhelming majority of recipients -- 354,000 of the 437,000 eligible -- would collect only $1,000 a year over five years.
"The House buyout plan is an incredible rip-off of the taxpayer, mostly to benefit a handful of large tobacco interests and tobacco companies," said Ken Cook, president of the research and advocacy group.
"I really didn't think the control of tobacco quotas would be so concentrated because I had heard and half-swallowed the rhetoric of this being about small farmers," he said. "But this is no different than with commodities like cotton and rice, where the big players control a huge part of the industry."
The sponsor of the House buyout bill, Rep. Ron Lewis (R-Ky.), said in a statement that the buyout is not a large-grower issue and would help the 8,000 tobacco growers in his district.
"Recipient payments are a simple case of economics: Those who have invested more also have had more to lose; those less, less," Lewis said. "Kentucky farmers have been very supportive of the buyout measure because they understand that any reform to the current program will allow them to be more competitive."
The tobacco buyout legislation, which was attached to a corporate tax relief bill by House Republican leaders last week, has been a central goal of growers and quota holders for several years. They argue that the quota system, established by the federal government in the 1930s to regulate tobacco prices, has over time reduced their ability to compete and, many say, has led them to near bankruptcy.
The buyout has become a hot political issue in tobacco states such as North Carolina and Kentucky, where candidates have debated who is most likely to deliver on the long-discussed relief. Democrats such as Erskine B. Bowles, a candidate for the U.S. Senate in North Carolina, have argued for a buyout bill that would be paid for by the tobacco companies and would be tied to a bill giving the Food and Drug Administration authority to regulate tobacco. Bowles's opponent, Rep. Richard Burr (R), has argued instead for a taxpayer-funded bill that would not take up the FDA regulatory issue.
Cook said the Environmental Working Group released the information now about who would benefit from a quota buyout because the bill that passed the House was never debated, and will go into conference with a Senate bill that has no buyout provision. "This is a huge taxpayer-funded buyout, and so far it hasn't been debated," he said. "Before this goes any further, people need to know what the taxpayers will be paying for."
Tobacco is grown in 21 states, but the USDA information showed that holders of a quota to market tobacco -- which has been bought and sold for decades -- live in all 50 states. More than 700 quota holders were listed in the District, and they would receive almost $4 million over five years under the buyout.