Smokey and the Bandits

Tobacco farmers, already blessed with price supports, now want a chunk of the tobacco settlement.

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.