Tobacco Buyout Plan Lights Fire in South

Iraq and the economy may dominate the national political landscape, but for some Southern voters, it's tobacco that will dictate their Election Day decision.

Southern farmers are generally reliable Republicans, but with the prospect of a federal tobacco buyout (search), they could become single-issue voters, and recent remarks by President Bush don't bode well for the Republican ticket.

In a recent campaign stop, Bush said he supports the current quota system, which allows the Department of Agriculture (search) to tell farmers how much of the crop to produce in order to keep supply and demand in equilibrium and guarantee a particular price.

The problem is the tobacco quota system (search), which dates back to the 1930s, isn't as profitable as it used to be.

Tobacco was once king in the upper South — in states like Kentucky, North Carolina and Tennessee — but cheap imported tobacco and rising production costs coupled with decreasing demand have made it more difficult for farmers to turn a profit. As a result, many would be happy, with federal help, to switch to a different crop.

On the campaign trail, presumptive Democratic nominee John Kerry has signaled his support for buyout legislation, a position his spokeswoman affirmed.

"He thinks the buyout is important for rural farmers throughout the South," spokeswoman Allison Dobson told Dobson added that Kerry has long been a supporter of a tobacco buyout, and this position is about good policy. "It's not about politics. It's about fairness."

But when a reporter asked the president an impromptu question about tobacco regulation during a campaign stop in Cincinnati early last month, Bush said he opposed a buyout.

"They've got the quota system in place, the allotment system," Bush said. "And I don't think that needs to be changed."

That response surprised Republican lawmakers from tobacco-growing states, who said they are not happy with the president's position and have warned about possible consequences in November.

"Obviously we're disappointed with the president's remarks. We'll wait to see before we gauge the administration's true position on this," said Richard Vaughn, spokesman for Rep. Bill Jenkins (search), R-Tenn.

In March, Jenkins introduced the Fair and Equitable Tobacco Reform Act of 2004 (search), which would end federal tobacco quota price support programs and compensate farmers for lost value.

In a boost for what has been slow-moving legislation, House Republican leaders are considering sending buyout legislation to the floor as part of an unrelated corporate tax package demanded by the World Trade Organization. The leadership hopes that by adding the buyout, they will entice Southern lawmakers to vote for the tax package.

A leadership aide told that the talks are in preliminary stages and no decision has been made on what the buyout language would say.

Jenkins, chairman of the House Agriculture Subcommittee on Specialty Crops and Foreign Agriculture Programs, said his bill would cost around $9.6 billion and be funded using a portion of the Federal Excise Tax (search) already collected on the sale of tobacco products. The existing quota program poses no cost to taxpayers. It is paid for with a fee on tobacco producers, cigarette markers and consumers.

The Senate has already passed the corporate tax bill without any buyout language. Sen. Mitch McConnell, R-Ky., has sponsored a separate buyout bill, and indicated that he is in discussions with the White House about it.

Prominent Republicans such as Virginia Sen. George Allen and North Carolina Sen. Elizabeth Dole, who called the tobacco buyout one of her top priorities, said they also have spoken with the White House about the president's remarks.

But not all lawmakers have been so cautious with their words. Rep. Virgil Goode (search), R-Va., has warned that the president is losing Virginians' votes.

Rep. Richard Burr, R-N.C., said he's mad about the president's comments and hopes he changes his position. Burr has aligned himself closely with the president and is in a close Senate race against former Clinton Chief of Staff Erskine Bowles. Bowles has made the tobacco buyout a top issue in his campaign.

The Bush campaign has declined to comment on the impact of Bush's opposition to a tobacco buyout, and the White House did not return phone calls requesting a statement. In other media reports, the White House declined to offer a clarification for the president's comments, and no retraction has been issued.

Larry Sabato, director of the University of Virginia's Center for Politics (search), called Bush's comments a "big mistake" that appear to have been made off the cuff rather than from a thought-out policy position.

"All he had to say was that it's an interesting idea and we'll look at it," Sabato said. "If he's smart, he'll find a way to backtrack. There's no sense causing problems in states that ought to be secure."

Sabato said with such a close race, the president doesn't need to create a "self-inflicted wound." But he added that because the buyout battle is taking place in "red" states like Kentucky, Tennessee, North Carolina, Virginia and Georgia, all of which went to Bush in 2000, the wound probably would not be lethal.

"My guess is in the end, the states that are heavily tobacco-oriented will all be in the Bush column," he said.