Tobacco Buyout Leads to Crop Dustup

FUQUAY, N.C. – Roughly 225 million pounds of tainted tobacco sits in warehouses all over the United States, unwanted, unusable and paid for with $663 million of U.S. taxpayer cash.

"I dare say that if it had not been for that buyout, half of the farmers would have been gone today," said Keith Parrish, a fourth generation North Carolina tobacco farmer.

Parrish and his community were saved from bankruptcy by the good offices of Kentucky Republican Sen. Mitch McConnell.

In 1999, Mother Nature nailed tobacco country with a double whammy: first, floods in the Carolinas and then droughts in Kentucky.

Fearing financial ruin for his state's tobacco farmers, McConnell authored a bill to bail them out, forgiving farmers hundreds of millions of dollars in loans.

The bailout is called the "McConnell miracle" by those who benefited from the deal.

"I think all family farmers are really a dying breed," said Parrish, whose $30,000 crop, and those of his neighbors, were wiped out by Hurricane Floyd.

Under federal law, the tobacco can't be sold in the United States and nobody wants to buy it overseas. It now sits in warehouses at a cost of $270,000 a month, $3.3 million a year.

"Temporary assistance is one thing," said Pete Sapp, president of the National Taxpayer's Union, "but when the government attempts to manipulate supply and demand, consumers as well as taxpayers suffer."

Supporters of the government's storage plan say keeping the stock on hand is the best method for staying competitive.

"If farmers are decimated by drought, flood, what have you, the government needs to step in, come to the rescue to keep us independent from other nations," argued Arnold Hamm, a member of the North Carolina Tobacco Cooperative.

But Sapp said that comparison is incompatible.

"Computers are essential to our national security but no one proposes buyouts and price support programs when the costs of microchips fall," he said.

If the Department of Agriculture can't get rid of the stock, it may have no other choice but to send it up in smoke.

Regardless of the current conundrum, McConnell said he is pleased with the bailout.

"This legislation helped brighten the future of Kentucky's hard-working tobacco farm families ... I will continue to fight for their interests for years to come," he said.