Tobacco Buyout Creates Major Decision For State's Farmers
Posted October 11, 2004 6:30 a.m. EDT
RALEIGH, N.C. — The U.S. Senate overwhelmingly passed a $10 billion buyout Monday as part of a massive corporate tax cut package. The buyout is bittersweet for a lot of farmers. It is a chance to get out of the business, but for many, it is the only way of life they know.
Over the next 10 years, tobacco growers and quota holders will be paid for their investments in the federal price support program. People in all 50 states, and the District of Columbia, as well as 4 U.S. territories and 16 foreign countries will get money from the buyout.
North Carolinians will collect the most. More than 91,000 quota holders will receive more than $3.8 billion in payments. Kentucky is next in line with nearly $2.4 billion in payments, followed by Tennessee and the rest of the southeastern seaboard.
When word came that the tobacco buyout legislation passed, Jimmy Hawks was busy plowing his tobacco fields, getting ready for the next crop. However, he is doing a lot of serious thinking about whether he will ever plant tobacco again.
"At some of the prices that have been mentioned, I won't be interested. There is no fun in producing tobacco without a profit in mind," he said.
"I know what my cost is and I know what I need to make," tobacco grower Ronald Stainback said. "If it falls in that category in tobacco, we can't make a profit. We're out of business."
One thing the tobacco buyout will do is put cash in the pockets of growers and owners of tobacco allotments. Some claim it is a long overdue economic shot in the arm for rural poor counties.
"It's just a snowball thing. Money that the farmer gets creates money for the fuel dealers, tire dealers, the car dealers, the tractor dealers -- that's a lot of money and it will have a big impact," Stainback said.
The buyout will be based on the amount of tobacco grown in 2002. Sen. Elizabeth Dole voted for the measure. Sen. John Edwards did not vote on the measure. He was campaigning in Iowa and Missouri. President George W. Bush is expected to sign the bill.