Chapter 30 Tobacco farmers

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The U.S. tobacco subsidy takes the form of a price support system, which guarantees

a minimum price for the crop. The system was established during the 1930Æs, when

a period of market instability threatened to put many farmers out of business. One

could argue that it still offers at least one public benefit; it tends to inflate prices, which

may help discourage consumption. But the security that the system confers on

tobacco farmers also offers a huge benefit to the cigarette companies. It does more

than effectively guarantee them a crop. It has allowed them to build a powerful political

base: a farm constituency. To understand the value of this constituency, you have to

see it in action, providing political cover for the manufacturers. Whenever Congress

threatens to raise tobacco taxes, the companies bring a few tobacco farmers and

their families to Washington - to display at a press conference, or to testify before the

appropriate congressional subcommittee. Voting for a tax increase that might put

family farmers like these out of work is not a politically appealing prospect. The

industry is spared the extra taxes, and the tobacco companies score PR points by

portraying themselves as representatives of rural America.

Quote from World Watch magazine, July-August 1997, p. 26 (Anne Platt McGinn)

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Most politicians from the southern tobacco states have used their clout to blindly back

the tobacco industry's agenda instead of truly helping the tobacco farmer. They

mistakenly assume that if the manufacturers prosper, as they have been with rapid

growth in sales and profits, the struggling farmers will also.

Tobacco Use: An American Crisis, p. 85

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The government guarantees tobacco farmers a minimum price for their crop, and

when the free market doesn't meet that price, taxpayers make up the difference. Ever

some staunch defenders of tobacco criticize the public cost. "The American taxpayer

got stuck for $800 million," says Rep. Charlie Rose (D-NC), former chairman of the

House subcommittee on tobacco.

Common Cause magazine, April 1991, p. 9

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Monday, July 24, 2000

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