Jenkins submits bill to end tobacco quotas

From Staff Reports

   Congressman Bill Jenkins (R-Tenn.) announced Friday that he has introduced legislation designed to end all federal tobacco quota and price support programs while providing fair and equitable compensation for tobacco quota holders and active tobacco producers adversely affected by the termination of such programs. The legislation, titled the "Fair and Equitable Tobacco Reform Act of 2004," includes 34 cosponsors.
   "This legislative product produces a fair compensation package at a cost far less than many proposals had offered in recent years," said Jenkins, who added the bill would help tobacco farmers who had experienced years of sharply reduced tobacco marketing quotas.
   Jenkins, chairman of the House Agriculture Subcommittee on Specialty Crops and Foreign Agriculture Programs, has been working with colleagues in recent months to produce new legislation. The new bill will cost around $9.6 billion and would be funded using a portion of the federal Excise Tax already collected on the sale of tobacco products.
   Jenkins stated, "Last year, estimates for a buyout reached $18 billion. This legislation presents costs at half of that level, and it would not require additional revenue to be raised. It would be solely funded with the existing excise tax on tobacco products. Also, under this legislation, farmers would continue to receive Phase II payments through the National Grower Settlement Trust Agreement."
   Under Jenkins' legislation, quota owners who were owners of quota on July 1, 2002 would receive payments of $7 per pound of tobacco marketed that year. Growers who actively produced tobacco during the 2002 growing season would receive payments of $3 per pound of tobacco marketed that year. The bill, if enacted into law, would go into effect on Jan. 1, 2005, and payments would occur over five years from 2005-2009. Future tobacco production after the buyout would be limited to those counties that had at least one tobacco producer in 2002 or counties directly contiguous to eligible counties.
   The bill is House Resolution 4033. A copy of the legislation may be found at: http://frwebgate.access.gpo.gov.