MAXWELL HOUSE COFFEE?! NO WAY! 
Posted on 09/28/2002 7:04:43 AM PDT by tomball
WASHINGTON (AP) - Lawmakers are considering ways to overhaul the decades-old price and production controls on U.S. tobacco that farmers say no longer provide economic security in the face of declining cigarette sales and cheaper leaf from abroad.
Tobacco-state legislators are advocating a federal buyout, paying farmers for surrendering government-granted allotments that dictate how much of the crop can be grown. A further step could mean abolishing minimum prices for tobacco and moving to a free market approach.
"Now is the time to stop the uncertainty that has surrounded the tobacco program," Rep. Mike McIntyre, D-N.C., said during a hearing on the issue last week.
In response to the new competition from abroad and declining sales, the Agriculture Department in recent years has reduced the amount of tobacco farmers can grow under its stabilization program.
Lamar Vickers, a tobacco farmer from Nashville, Ga., told a House Agriculture subcommittee he lost half his income as a result of the cuts. "Imagine trying to pay your bills with half your income lost," he said.
Under buyout proposals being considered on Capitol Hill, owners of the government allotments could receive up to $12 a pound. Farmers leasing the quotas could get as much as $4 a pound.
The market price for rented quotas is roughly 70 cents a pound. Doing away with them would reduce farmers' production costs, say economists, lowering the price of U.S. leaf and making it more competitive with foreign tobacco.
A presidential commission previously put the cost of a buyout at about $16 billion over five years, assuming that about three-quarters of tobacco farmers stopped growing the crop. Some proposals before Congress would pay for the buyout with a new fee on cigarette manufacturers, which would be paying less for their leaf.
Michael Szymanczyk, chief executive officer of Philip Morris USA, said the only way for a buyout to get approval from Congress is for the cigarette makers to pay for it.
"Buyout proposals with no funding source, that seek to utilize existing revenue streams or that include new federal taxes, in our view simply won't get the job done," Szymanczyk said.
But executives from R.J. Reynolds Tobacco Holdings Inc. and Lorillard Tobacco Co. told lawmakers they do not want to pay for a buyout.
Philip Morris is supporting a bill by McIntyre and Rep. Tom Davis, R-Va., that would give growers a buyout and allow the Food and Drug Administration to regulate tobacco products.
Health groups have been seeking such regulatory legislation since the Supreme Court two years ago struck down the FDA's regulations on tobacco. The court ruled that the agency had overstepped its bounds because Congress never gave it the specific authority to regulate tobacco.
Philip Morris says FDA regulation would offer stability. But R.J. Reynolds and Lorillard contend that proposed FDA marketing and advertising restrictions could hinder their ability to woo customers away from Philip Morris, the nation's leading cigarette maker.
Health groups say the FDA's regulatory authority in the McIntyre-Davis bill is not strong enough. Some farmers also oppose the bill because it does away with all price supports as well as the quotas.
Szymanczyk says tobacco companies should not have to pay for a quota buyout and then also have to accept a new price-support system that would keep tobacco prices artificially high.
Many growers are rallying around a bill by Rep. Ernie Fletcher, R-Ky., that would let the government still set minimum prices for U.S. tobacco after the buyouts.
Fletcher does not include the FDA provision in his bill, but he acknowledges that tobacco-state lawmakers will likely have to accept such regulation in any deal on the quota buyouts. Some lawmakers want to make a run at trying to get a bill passed if there is a lame-duck session of Congress after the election. More likely is that it will get put off until the new Congress convenes in January.
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On the Net:
House Committee on Agriculture: http://agriculture.house.gov/
In a nutshell this explains PM's position on the byouts and FDA regulation.
While I have nothing against a corporation seeking ways in which to keep their shareholders happy, corporations can't keep shareholders happy if they have no customers. Ergo, it should be in the best interest of PM to STOP screwing their customers.
STOP BUYING PM TOBACCO PRODUCTS.
And they can stick their cheese products where the sun don't shine as well! heh!
Cheese products????? You mean the stuff listed on the package as (whey, whey proteing concentrate, salt, sodium tripolyphosphate, citric acid, sodium phosphate, yellow5, yellow6) - you mean those cheese products?????
Yep! Greasy Cheese Products sold by PM! heh!
MAXWELL HOUSE COFFEE?! NO WAY!
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