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July 22, 1981 EXTENSIONS OF REMARKS 16935 EXTENSIONS OF REMARKS SECTION 22 TESTIMONY I have worked for lower tariff rates on flue-cured tobacco farm in Pitt County, U.S. tobacco entering the European commu­ North Carolina, over the past six years has nity and other areas of the world. At my re­ ranged from 5.2 percent in 1975 to an aver­ HON. CHARLES ROSE quest a group of farmers went to Europe to age of 3.7 percent in 1978-80. For the farm OF NORTH CAROLINA talk with tobacco buyers and manufacturers owner who received one-fourth share of the IN THE HOUSE OF REPRESENTATIVES as a follow up to preliminary discussion crop as rent, profit as percent of tobacco which I had there. sales price rose from 2.8 percent in 1975 to Wednesday, July 22, 1981 As you can see, I have a close familiarity an all-time high of 13.0 percent in 1978 and e Mr. ROSE. Mr. Speaker, on June 24, with the tobacco program. And I fear that then fell to 11.2 percent in 1979 and 4.5 per­ 1981, the International Trade Commis­ program is endangered today. cent in 1980. sion held hearings in its section 22 in­ The flue-cured tobacco program that we These and other data available on the Pitt have today has evolved over a period of 48 County farm show that by any standard of vestigation on the importation of for­ years, and it is a great success story. eign scrap tobacco and its effect on measurement used in business today, the Since 1965 the control program has been profits have not been excessive. the U.S. tobacco price support pro­ based on both acreage allotments and gram. poundage marketing quotas. This means the In one respect the tobacco program occu­ Among those persons testifying at grower is limited not only as to the acres he pies a unique place in the agricultural histo­ can plant but also the pounds he can sell. ry of America. It has been in operation for this hearing was North Carolina Gov­ more than four decades, and its cost to the ernor Jim Hunt. I would like to share These are the tightest controls ever applied to a major farm commodity in the United federal government during that period of with you his comments. States. time has been very small. In fact, tobacco TESTIMONY BY GOVERNOR JIM HUNT-INTER­ In referendum after referendum, flue­ growers have received less than one percent NATIONAL TRADE COMMISSION HEARING ON cured growers have voted overwhelmingly of the federal funds spent on all types of ScRAP ToBAcco to continue their supply control and price commodity support programs over the past Mr. Chairman and Members of the Com­ support program. Usually the proportion of 50 years-or for that matter during the mission: Thank you for allowing me to favorable votes has been between 95 and 98 entire history of the country. appear before you today. As Governor of percent of the total number cast. I submit that tobacco growers have reason the nation's largest tobacco producing and Growers have had to make genuine sacri­ to be proud of their program and of the manufacturing state, I am deeply interested fices in order to keep their program. There part they have played in keeping the pro­ in matters affecting the future of the tobac­ have been many times in the past 30 years gram on a sound basis. Despite the fact that co industry. when they had to accept sharp quota reduc­ all segments of the tobacco industry have I am here today, at the request of the tions. Just since 1975, the basic flue-cured been caught up in a "technological tornado" North Carolina Farm Bureau, to emphasize quota has been reduced by about one-third. over the past 30 years, tobacco growers have to you the importance of the tobacco indus­ A 40-acre allotment in 1975 would have been able to maintain the basic principle of try-and the tobacco quota and support pro­ shrunk to only 27 acres in 1981. their program-control of supply in return gram-to the people of my state. It has not been easy over the years for for fair realistic price support-even though In 1979, tobacco provided jobs for 148,000 growers to live with these quota cutbacks, structural modifications became necessary North Carolinians. That includes 44,000 but growers know that the cutbacks were es­ from time to time. farmers who depend on tobacco for a liveli­ sential in order to make the program work. In the past few years, however, our tobac­ hood. It includes many small farmers. They have also made it work by continuous co farmers have become worried by the In two recent years <1978 and 1980), the fine-tuning of various features of the pro­ rising tide of imported leaf. According to gross income from tobacco on North Caroli­ gram. the North Carolina Farm Bureau, in 1969 na farms exceeded $1 billion a year. Under the tobacco program, growers have imports amounted to 237 million pounds, or In 1978, the latest year for which compre­ efficiently produced an adequate domestic only 18 percent of the tobacco used in ciga­ hensive figures are available, North Caroli­ and export supply of quality leaf. All seg­ rettes. By 1979, imports accounted for 31 na farmers received gross income of $1.1 bil­ ments of the industry and all sectors of the percent <or 478 million pounds) of the to­ lion from tobacco. That was more than economy have benefited from the stability bacco used in cigarette production. The Kansas farmers received for wheat-and that the program has brought-stability of most alarming increases came in the "scrap" Kansas is the number one wheat state. supply as well as price. Between marketing category, which increased from 10 million It was more than Arkansas farmers re­ seasons, on a year-round basis, buying firms pounds in 1969 to 204 million pounds by ceived for broilers-and Arkansas leads the have been able to purchase tobacco from 1979. nation in broiler production. the loan inventory held by the Flue-Cured A number of factors account for the in­ It was more than Texas farmers received Tobacco Cooperative Stabilization Corpora­ creases in imports. for cotton-even though Texas is number tion. In effect, loan stocks have been used as The smoking and health issue has result­ one among the states in cotton production. a reserve supply available to the companies ed in low-tar, low-nicotine, filter-tip ciga­ North Carolina's tobacco farm income was whenever needed. rettes. Manufacturers have been able to in­ greater than California farm income for Prices paid to growers for their tobacco crease the use of imported flue-cured leaf of eggs-and California is number one in the have increased over the years, but not ex­ lower quality than domestically produced nation in egg production. cessively so. Year-to-year adjustments in flue-cured without the smoker being able to I grew up on a tobacco and dairy farm the support price have been based on in­ recognize the cheaper leaf. near Wilson, which has the largest tobacco creases in farmers' costs. Thus, most grow­ market in the world. My thesis for a mas­ ers have been able to survive despite the The tobacco companies have a responsibil­ ter's degree in agricultural economics from soaring costs of such production items as ity to their boards of directors and their North Carolina State University was the fuel, fertilizer, pesticides, labor, machinery stockholders to make a profit. They have basis for the acreage-poundage controls for and others. If the price support formula had become truly international companies, and flue-cured tobacco. not been written so as to help growers meet they have encouraged the production of to­ Since becoming Governor nearly 4% years today's highly inflated costs, how could the bacco in many parts of the world. ago, I have actively championed the cause medium and smaller growers hope to sur­ At the same time, they have increased of tobacco, working with the State's delega­ vive? their exports of manufactured cigarettes tion in Congress when anti-tobacco forces No one should conclude, however, that re­ from 29.15 billion cigarettes exported in have tried to eliminate or weaken the quota turns to flue-cured tobacco farmers for the 1970 to 81.99 billion in 1980, an increase of and price support program. resources used have been excessive. That more than 250 percent. In 1979 I led the first tobacco trade mis­ simply is not the case. Another factor in the increase of imports sion to China in 30 years, taking with me a Through the North Carolina State Uni­ has been that United States foreign policy group of 12 farmers, industrialists and to­ versity Electronic Farm Records Program encourages the importation of goods from bacco specialists for several meetings with and from other sources, data are available less developed countries. Many of them Chinese trade and tobacco officials. showing that return on investment for a have the large supply of labor and limited e This "bullet" symbol identifies statements or insertions which are not spoken by the Member on the floor. 16936 EXTENSIONS OF REMARKS July 22, 1981 supply of land needed for tobacco produc­ This system is carefully balanced, depend­ gressional authorization and oversight tion. ing on the cooperation and understanding process. We wish him well in his next Foreign countries have subsidized their to­ of the farmers, the warehousemen, the bacco exports in order to earn the U.S.

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