Smokey and the Bandits
The cigarette companies have
become national pariahs, endlessly reviled as heartless merchants of death and
disease. But amid the chorus of demands for punishment of the industry, one
group of profiteers continues to enjoy public sympathy and the favor of
politicians: tobacco farmers.
You might
expect that any financial settlement would require compensation not only from
those who packaged and marketed cigarettes but also from those who made a
living growing and selling tobacco to those manufacturers. But the farmers have
succeeded in portraying themselves as innocent victims deserving to be made
whole by the settlement.
In September, growers trooped to Capitol Hill to request
continued indulgence. "I was born to a tobacco farmer," Rod Kuegel of
Owensboro, Ky., told the Senate Agriculture Committee. "I do not like being
condemned because I was not born to a rice farmer or a wheat grower." Kuegel
and his fellow tobacco farmers would like not only to preserve the current
tobacco program, perhaps the most lucrative of federal agriculture subsidies,
but also to get a share of the loot from the proposed tobacco deal. "We deserve
to share equitably in any proceeds distributed as a result of a settlement,"
said North Carolina Farm Bureau President Bob Jenkins.
Congress
and the president appear ready to accede to their demands. House Commerce
Committee Chairman Thomas Bliley, R-Va., said financial arrangements would have
to be made to prevent hardship. Sen. Wendell Ford, D-Ky., has made it known
that he will not go along with any deal that includes the dismantling of the
tobacco program. Even anti-tobacco crusaders don't dare disparage tobacco
growers. "There was never any intention to hurt the farmers," said Matthew
Myers of the Campaign for Tobacco-Free Kids.
Among the changes demanded by President Clinton
when he finally took a (vague) position on the proposed settlement was greater
protection for farmers and their communities: "We have a responsibility to
these people. They haven't done anything wrong. They haven't done anything
illegal. They're good, hard-working, taxpaying citizens, and they have not
caused this problem." The proposals being discussed on Capitol Hill include
paying billions in aid to help growers switch to other crops and compelling
cigarette makers to use more domestic leaf in their products.
The
existing tobacco program, however, looks as though it will survive--which is
even more notable, considering that last year Congress enacted legislation
putting most other farm subsidies on the path to extinction. Tobacco farmers
are especially loath to relinquish the embrace of the Department of Agriculture
because they have been treated with unusual generosity. Defenders insist the
program shouldn't be called a subsidy because it costs taxpayers virtually
nothing. But the only reason taxpayers get off easy is that consumers don't.
The program works by requiring either a federal acreage allotment to grow
tobacco, a marketing quota to sell it, or both. By thus restricting output, the
Department of Agriculture keeps prices artificially high. If the price drops
too low, the government will effectively buy it at a floor price. To prevent
low-cost foreign producers from snatching away sales, Washington also limits
imports. It all adds up to a very good deal.
The federal government is often accused of gross hypocrisy
for discouraging smoking while rewarding farmers for growing the weed. In fact,
there is a weird and wholly accidental consistency in these policies. By
raising prices, the tobacco program reduces smoking, though to only a modest
extent. (The cigarette industry sells about $50 billion worth of cigarettes
every year, but the tobacco in them costs only about $2 billion.) But it
certainly encourages the growing of tobacco. When Agriculture Secretary Dan
Glickman toured farms in North Carolina in August, local growers told him they
didn't want to have to raise other crops because an acre of tobacco can yield a
bigger profit than 50 acres of corn. A University of Kentucky study estimated
the average net per-acre profit on tobacco at more than $1,800--compared with
$73 for soybeans and $30 for corn.
So it's
easy to understand why tobacco farmers want to maintain the status quo. The
question is why the rest of us should be prepared to give them what they want.
True, they are honest, hard-working taxpayers who didn't break the law--but the
same thing could be said for the managers, employees, suppliers, and
shareholders of the cigarette companies, and no one has given any thought to
their bleak fortunes. Glickman defended the program as a way to keep farms from
getting big and corporate. But that's been done only by rewarding inefficiency.
Corn farmers could make a living off 100-acre spreads, too, if the Department
of Agriculture was willing to tightly limit output and mandate high prices.
Besides, the specter of agribusiness concerns taking over farms is largely a
fantasy. Only 12 percent of American farmland is owned by corporations, and
most of those are small, family-owned concerns.
Nor can the farmers be depicted as hapless
bystanders blindsided by an unfair change in government policy. If the
cigarette makers are guilty of an assault on public health, those who grew
tobacco certainly deserve to be charged as accomplices. Paying them a share of
any settlement to make up for the loss of sales due to expected reductions in
smoking borders on the absurd. When a builder gets socked with a damage award
because one of his houses falls down, we don't allot a share of the money to
the subcontractors on the theory that they will lose work if business falls
off. Any help should come from the taxpayers at large, not from the purported
victims of smoking that the settlement is supposed to compensate. But the help
should be modest. Like everyone else, tobacco farmers have known for years that
the future of the cigarette business was not bright. If they failed to prepare
for a decline in demand or the dismantling of the tobacco program, that's their
fault. The rest of us shouldn't feel the obligation to keep supporting them in
style.
What they deserve is no more
nor less than they would deserve even if there were no cigarette deal (which
there may not be). Sen. Richard Lugar, who chairs the Agriculture Committee,
proposes to buy them out over a few years and then leave tobacco to the market.
His model is last year's farm bill, which phased out most other commodity
programs while providing transitional assistance during the changeover. Tobacco
growers managed to avoid that fate last year. If they're not willing to settle
for it now, let them go cold turkey.
