|
|
[Because of the sensitivity of these discussions, and concerns that statements intended as inquiry or preliminary proposals might be interpreted otherwise, no effort is made to relate specific statements or ideas with individuals except for formal presentations. If you have questions about any portions of the meeting, we suggest that you contact a participant or Frank Dukes (804-824-2041).]
A Dec. 3 briefing and discussion sponsored by the Southern Tobacco Communities Project , which focused on recent national legislative proposals related to tobacco production, attracted about 50 health advocates, community development experts and tobacco growers to Washington, D.C.
Brief presentations were made by Karen Armstrong-Cummings, Commodity Growers Cooperative, on the work of the National Commission on Small Farms; by Michael Sligh, Rural Advancement Foundation International (RAFI-USA) from the Working Conference on Tobacco Community Development; and Scott Ballin, National Center for Tobacco-Free Kids, on General Public Health Interests for Tobacco Production Public Policy.
Ms. Armstrong-Cummings noted that the Commission has focused on the need for farm-based rural development. Among the most important Commission recommendations is the need for agencies to look at the benefits of small farms and to pay attention to the future of such farms. The importance of sustainable agriculture in sustaining rural communities is increasing. A continuing concern is credit and access to capital. She emphasized the need to understand agriculture and economic development in their totality, and economic development strategies need to focus on alternative structures and markets rather than alternative crops or jobs. The Commission is receiving high visibility for its work, and will be meeting with the President on Dec. 17. Ms. Armstrong-Cummings invited advice and comment about their draft recommendations before Dec. 11.
Mr. Sligh reminded participants of three lessons from earlier farm crises, including the need to be proactive, the need to have people who are most impacted at the center of policy initiatives, and the need to integrate economic and environmental considerations. A group of farm and rural development advocates has developed general principles to guide how community development money is spent and distributed. These are: 1) there should be farmer and local control over how the money is spent; 2) the flow of dollars should take the shortest route to the community; and 3) the focus should be on agricultural-based enterprises.
Mr. Ballin reiterated the value of these discussions between
public health advocates and growers. He noted that many members of the
public health community view growers as their constituents, as grower health
concerns are the same as those of other citizens.
TOBACCO PROGRAM PROPOSALS
Detailed presentations were offered by staff for Sens. Ford, Lugar, Robb, and Kennedy, each of whom already has submitted or will shortly submit legislation concerning tobacco producers and the tobacco program. Meeting participants had copies of the proposed legislation of Sens. Ford, Lugar and Kennedy, and the detailed outline of Sen. Robb's proposal as presented on the Senate floor. [NOTE: the following includes highlights of what these proposals entail; for more detail see the proposals themselves.]
Key aspects of Senator Ford's proposal included the following:
DISCUSSION
In the discussion of these proposals and the earlier presentations, the following themes garnered the most attention:
Free Market vs. Tobacco Program of Price Supports
and Production Controls
Participants generally agreed that changing to a free-market
approach to tobacco production, with elimination of the tobacco program,
would likely have little effect on the demand for tobacco products. The
price of a pack of cigarettes would likely decrease by only a few cents,
and this decrease is trivial relative to the likely increase under the
proposed global settlement. And for some public health advocates, the possibility
of reducing the numbers of growers dependent upon tobacco, a likely outcome
of a free market approach, would appear attractive.
On the other hand, a free-market approach to tobacco production would most benefit the tobacco leaf purchasers and manufacturers (the industry). Price supports and limits on production through mechanisms such as quotas or licenses provide a higher income to most tobacco growers than that which would be provided by a free-market system. The price of tobacco in the United States affects the price of tobacco world-wide; a limited supply and higher price in the U.S. is considered helpful to farmers in developing nations as it helps them obtain higher prices from tobacco companies. In the absence of price supports and quotas or licenses, the price for raw leaf is likely to decline substantially in the U.S. and around the world, and industry expenses are estimated to decline by up to $3 billion/year worldwide. Of course, a large price reduction will reduce the average tobacco farmer's margin of income as well.
In addition, a free market system - considered beneficial in most instances and for most commodities - aims to create an abundant supply at low prices. From a public health perspective, this is not a desired outcome for tobacco. A free market system also could lead to direct contracting between growers and leaf purchasers or manufacturers, thus reducing growers' independence. It was argued by public health advocates that tobacco production policy ought to assist grower independence from the industry.
Thus, despite concerns that free market approaches in general have a good deal of political support, and that a program with production controls and price supports is no longer politically viable, participants generally agreed that any legislation governing the future of tobacco in the United States should not aim to establish a "free market" system for tobacco production.
Burley and Flue-Cured Tobacco Policy
Burley and flue-cured tobacco growers have different
needs. Burley growers on average operate smaller farms than do flue-cured
growers, and quota is generally easier to obtain. Burley is more price
sensitive, while flue-cured is more sensitive to quota. For example, flue-cured
operators who have a relatively high capital investment in equipment must
find enough quota each year in order to make the best economic use of that
investment.
Thus, a proposal such as Sen. Ford's, which compensates quota holders as demand declines but does not include a buyout, is considered by some flue-cured growers as more appropriate for burley growers than flue-cured growers. Similarly, a proposal such as Sen. Robb's may not be seen in as positive a light by burley growers as it may be by flue-cured growers. There was some concern that burley growers may face a situation similar to flue-cured growers in a few years, if demand diminishes and economies of scale drive the market. The differences may yet be worked out; however, it may be necessary, if it is even possible, to have separate plans for burley and flue-cured growers.
Harm Reduction Strategies
Prohibition of the use of tobacco products is not a viable
or realistic option. For the foreseeable future, it is generally agreed
that adults will continue to have the right to choose to smoke. Public
policy should recognize that fact and be directed at reducing harm from
the use of tobacco products. Among the most important harm reduction goals
agreed to by both growers and public health advocates is restricting youth
access to tobacco products.
It was generally agreed that consumers have the right to full information about the ingredients of the product being purchased, particularly information that can affect their health and well-being. For example, tobacco grown overseas may be grown with harmful pesticides and other chemicals currently prohibited in the United States. Consumers should be given information about types of tobacco used, where the tobacco is grown, growing and inspection standards, and the percentages of nicotine and other essential chemicals. There was agreement to further examine the issue of imported vs. domestic tobacco.
A final concern was raised about the impact of any settlement-related policy changes on the international community.
Community Development
Communities dependent on income from tobacco farming
should be assisted in developing a broader economic base, so that they
are less dependent on a single cash crop and have a "soft landing" in the
likely event that tobacco production declines. Funding for this economic
assistance should be distributed in the most direct route possible to the
communities themselves. Administrative costs should be clearly defined,
separating the costs for research and crop insurance from overhead expenses,
which need to be kept as low as possible.
A substantial portion of the population places a high value on maintaining the tradition of the small family farm. While this value is most apparent to rural communities, it is also believed that the American populace at large views small farms as a part of our culture and heritage which should be sustained and encouraged. Since the advent of agri-business, tobacco is one of the few crops that can still be grown competitively on a small farm scale. There are also some public health advantages to small farming, considering some of the consequences of large-scale hog and poultry operations, for instance.
There is some thought that funding for economic assistance should be used to expand the agricultural base of the community through such strategies as on-farm diversification, improved marketing, and value-added processes. The development of non-agricultural jobs and industry should be seen as complementary to the goal of maintaining an agricultural based economy for such regions, not as the primary goal itself. It was pointed out, however, that some of these communities already have a substantial industrial base.
Funding
It was argued that funding mechanisms need to be created
that will establish an income stream independent of direct payments by
tobacco manufacturing companies, as payment by the industry will depend
on a host of factors. The program must be self-sufficient in that it will
not depend either on the location of the tobacco manufacturers or on their
willingness or ability to pay. Some participants argued that only an excise
tax would provide such an independent, reliable income stream.
CONCLUSION
Participants were asked to find ways in which they could educate others about what they have learned through these discussions. There was interest in polling the general public about tobacco production issues. Participants also sought to find ways to analyze the implications of proposed changes for issues such as the price of tobacco products and distribution of income.
There was some sentiment expressed about the need to have growers publicly support those public health initiatives that they view as appropriate. A number of growers stated that they had indicated their support for a document of principles concerning both tobacco production and public health first circulated by Scott Ballin. It was agreed that these principles, if satisfactory to enough parties, could serve a powerful role as legislation related to the proposed global tobacco settlement is considered. The document will be sent out along with the meeting summary.