Commission Proposes Tobacco Quota Buyout

The report states that "tobacco farmers should be compensated for their quota at a fair and equitable value in order to address their current crisis and reduce their dependency on tobacco."

The quota program, implemented during the Great Depression, controls the amount of tobacco farmers can grow through price supports and production controls to ensure farmers' economic stability.

The tobacco commission, established in September by former President Bill Clinton, warns of an unprecedented crisis in tobacco-growing regions as farmers try to switch from tobacco crops to agricultural alternatives.

The commission's report states that buyouts would help reduce farmers' dependence on tobacco, while helping them find other ways to make a living.

The tobacco commission's final report is due out in May.

Doug Richardson, executive director of the commission, said it is an open question as to whether the buyouts will actually occur -- and if they do, to what extent. "Any buyout would have to be tied to some program changes," Richardson said.

But he said the commission has not yet received any reaction to its recommendations from the Bush administration.

Some state leaders are skeptical as to whether a buyout would receive the necessary funding.

Brad Woodhouse, press secretary for Rep. Bob Etheridge, D--N.C., said Etheridge, who is a member of the U.S. House Agriculture Committee, has reservations about a buyout. "Where's the money?" Woodhouse said. "The congressman has never favored a buyout because no one has ever shown him what the source of revenue for that would be."

And N.C. Agriculture Commissioner Meg Scott Phipps stated in a press release that "the idea of a quota buyout raises more questions than it does answers."

"This is a preliminary report, and there are simply too few details to determine whether a buyout would be an economically viable option for farmers, where funding would come from and even how it would work," the press release stated.

But Steven Troxler, a tobacco farmer from Browns Summit and an unsuccessful Republican candidate for N.C. agricultural commissioner, said buyouts would give some farmers an advantage. "A buyout would at least allow farmers of retirement age to get out under more favorable circumstances," Troxler said.

Troxler, who both leases and owns tobacco quotas, said the current quota system is hurting N.C. tobacco farmers in the world market. "The quota is so ingrained in the price of tobacco that the extra money has made us less competitive," he said. "For 15 years, the quota system has kept prices stable, but meanwhile, production costs have increased."

Troxler added that farmers will take a particularly large hit this year because of price increases in fertilizer and fuel.

Despite a diversity of crops raised in North Carolina, Troxler said growers must still work to establish new crop markets for tobacco crop replacements.

He said alternative crops such as nurseries and turf grass will have to become better established over time, but that no single crop can replace tobacco in the state's economy.

The State & National Editor can be reached at stntdesk@unc.edu.