Iowa Public Television


Tobacco Goes With Buyout

posted on August 1, 2003

Hello, I'm Mark Pearson.

Thanks to business spending, there were more indications this week of economic recovery.

The government reports the economy grew at an annual rate of 2.4 percent during the second quarter. That's the strongest showing in nearly a year.

Even so, consumer confidence sank in July as skepticism over the job market lingers. Indeed, the unemployment rate dropped in July, but only because a half-million people stopped looking for jobs.

Changes in the job market also are affecting agribusiness, especially the tobacco industry. The question is whether Congress should fund the buyout of tobacco quota holders and thus end the time-honored system that subsidizes growers of the golden leaf.


Tobacco Goes With Buyout

Tobacco state senators reached a consensus earlier this week on a bill to buy tobacco farmers out of the federal program. In the buyout, the government would end quotas and the price support system, allowing a free market for tobacco.

The buyout proposal before the Senate would pay farmers 13 billion dollars over a six-year period with tobacco manufacturers footing the bill.

Farmers and anti-smoking groups support the buyout, while cigarette makers have specific conditions they want met. Most do not want to pay for the buyout, have concerns regarding trade agreements, and do not want the Food and Drug Administration to have the authority to regulate tobacco products.


Tags: agriculture news plants smoking tobacco