To my dismay, the USDA's interpretation of the bill provided Kentucky's farmers with a tobacco producer payment policy that is contrary to the wording of the law itself, giving cigarette manufacturers a break to the detriment of family farmers. The USDA used not the "effective tobacco marketing quota" but the number of pounds marketed. As a result, many of our farmers will not receive the amount of buyout money from the cigarette manufacturers that Congress intended.
Unusually adverse weather conditions highlight the disparity between the legislation and the USDA-mandated policy. In 2002, Central Kentucky was declared a National Disaster area due to drought conditions. Drought prevented many producers from marketing all the pounds the quota system allotted them. If the USDA had based producer payments on farmers' effective quotas as the law directs, the drought would have had no effect on these payments under the buyout.
The USDA seemingly made up for this shortfall in payments by taking into consideration disaster leases and transfers, despite explicit bill directives to the contrary. To the casual observer, it would seem that drought-affected farmers could simply have leased out their unproduced quota pounds to other farmers to produce. However, two obstacles impeded most farmers. First, existing regulation states that a farmer must fall short of his or her quota by 20 percent or more to be eligible to disaster lease. While many farmers suffered significantly, most of them fell short of the required 20 percent. Second, because so many disaster pounds flooded the market, there was not enough demand for them so these pounds remained unleased despite the 20 percent rule.
Farmers are facing a triple whammy: First, they were unable to sell to the market their full quotas. Second, they were either prohibited from or otherwise unable to lease out quota pounds to other farmers. Third, buyout regulations will not compensate for these quota pounds through producer payments. The cigarette manufacturers will be paying producers only about $9.3 billion, a $300 million savings over what was set forth in the legislation.
Many farmers and farm groups made their objections known prior to the finalization of USDA tobacco producer payment policy. Nevertheless, the USDA failed in its responsibility to implement policy consistent with the intentions of Congress, giving the cigarette manufacturers a $300 million break, at the expense of family farmers. I will continue to be a vocal supporter of farmers and will fight for fair implementation of our laws that impact them.
Editor's note: U.S. Ben Chandler, D-Ky., represents the 6th Congressional District, which includes Jessamine County and most of the Bluegrass region of Central Kentucky.|10/13/05|***