Date: 1982-06-21
Speaker: ROBERT W. DANIEL (republican)
Chamber: H

Mr. Speaker. I rise in support of the No Net Cost Tobacco Program Act of For the 370 yeah since John Rolfe planted the first commercially viable crop. tobacco has been an economic mainstay of the tidewater and southside Virginia areas which I represent. In fact. this crop alone saved Americas first permanent Englishspeaking colony from economic extinction. In the years immediately after the first crop. production grew rapidly from 2.500 tons in1615 to 1.5 million tons in 1630. During this time. demand seemed limitless. So much energy was being expended in tobacco production that one Virginia Governor had to require each farmer to plant a certain percentage of his land in corn in order to insure a sufficient food supply. However. in 1660 England imposed the Navigation Act. which closed nonEnglish markets to Virginias tobacco exports. and tobacco farmers found themselves with excess production capacity and falling prices. From that time on. producers working privately or with colonial and State governments devised several pro. duction control systems. Each of these s.-stems lasted until prices rose significantly. then each system was discarded. When prices again dropped. new production controls were devised. Fifty years ago. during one of the bleakest periods American agriculture has ever known. the Federal Government set up the most efficient. and the most longlasting production control system ever used by the American tobacco industry. This system allowed many small family farms to survive not only the Depression. but also to resist the trend toward consolidation during the forties. fifties. sixties. seventies. by guaranteeing an adequate farm income and a reasonable market price. Tobacco can be stored easily for long periods of time. and therefore the CCC is able to hold reserves it purchased from bumper crops and sell these reserves during years in which poor crops are produced. This system has provided tobacco with impressive market price stability and has made America a reliable export trading partner. However. over the years. the CCC has incurred some losses on lower quality leaf which it was unable to sell. While tobacco program losses have been substantially less than those incurred by the dairy. corn. wheat. cotton. rice. barley. sorghum. oats. and soybean programs. various legislative and administrative program changes have been necessary from time to time to keep the price of American tobacco competitive and to minimize program costs. When improved technology allowed farmers to produce an oversupply of pricesupported tobacco on the acreage allotment. which had formerly grown only a supply which could be consumed by demand. then Congress instituted a poundage quota to .Aiminate overproduction. and reduce Government expense. Apparently it is time to again adjust the tobacco program to bring it in line with market realities. However. what needs to take place is a fine tuning of the current program. We must not demolish a good structure when all it needs ts a new coat of paint. The two main concerns over the present program are its cost to the CCC. and the alleged competitive disadvantage at which it places American tobacco on the international market. The committee bill addresses both of these areas. It charges each farmer who participates in the price support program a capital stock fund contribution or an assessment which will cover any loss that might be incurred by the CCC other than administrative expenses common to other price support programs. The other major feature of the bill allows the Secretary of Agriculture discretion to limit increases in price support levels dictated by the legislative formula in response to changing economic and market conditions. This discretionary authority should be sufficient to offset any competitive disadvantage caused by the program. However. the price support program is the least significant of the three factors which are causing American tobacco to lose its international market share. The program comes in a distant third behind nontariff trade barriers and high U.S. labor costs. Again. I urge your support for these amendments which continue a program that has for 50 years assisted the survival of many family farms and brought stability to an important sector of American agriculture.