WASHINGTON, December 15, 1997 -- The U.S. Department of Agriculture today announced the provisions of the 1998 flue-cured tobacco program. The national marketing quota for the 1998 crop is 807.6 million pounds, down from the 1997 quota of 973.8 million pounds, and is based on the following:
| Million pounds ---- | |
| -- Purchase intentions by domestic cigarette manufacturers: | 454.6 |
| -- Unmanufactured exports (3-year average): | 371.9 |
| -- Reserve stock adjustment: | - 42.4 |
| -- Discretionary adjustment: | 23.5 |
| 807.6 | |
The national average yield goal remains unchanged at 2,088 pounds per acre. The price support level for the 1998 crop is $1.628 per pound, up 0.7 cent from 1997. The national acreage allotment for the 1998 crop is 386,782 acres, down from the 1997 allotment of 466,379 acres.
For each farm, the 1998 basic quota will decrease about 16.5 percent from 1997.
The national effective quota is expected to be about 813 million pounds, or 20 percent below 1997. For Georgia, the 8 percent shortfall in production in 1997 will result in a Georgia effective quota of approximately 8.5 percent less than for 1997.
The marketing assessment will be .814 cent per pound, which is paid by both growers and buyers, for a total of 1.628 cents per pound for the 1998 crop of flue-cured tobacco. Importers of flue-cured tobacco will be responsible for the full 1.628 cents per pound marketing assessments for imported tobacco. The amount of the no-net-cost assessments will be announced later.
For further program information, contact Verner Grise, telephone (202) 720-5291, E-mail address vgrise@wdc.fsa.usda.gov
Uncertainty in the tobacco industry has prompted the tobacco industry and all parties involved in current litigation -- plus the medical community -- to negotiate a proposed resolution 68 pages in length. This was completed in June 1997.
The resolution calls for expenditures of $368.5 billion by the industry over the next 25 years to settle all general and class action lawsuits -- plus any future lawsuits. Individuals could still file suits for compensatory damages -- but not punitive damages.
Further, the resolution calls for $15 billion to be spent annually after the initial 25 year period for an unlimited time. Now the resolution will be considered by Congress -- and must be approved before it can be implemented.
In effect, it is an attempt to bring some degree of certainty to the industry -- to shareholders and to farmers.
There are proposals currently in Congress -- as a part of the proposed resolution -- to compensate tobacco farmers for any expected losses. Two proposals have been offered in the U.S. Senate to assist tobacco growers as a part of the national tobacco settlement. One is from Sen. Richard Lugar of Indiana and is called the Lugar Proposal. The other is from Sen. Wendell Ford of Kentucky and is called the LEAF Act. Also, Sen. Charles Robb of Virginia is preparing a proposal, referred to as the Tobacco Production Control Corp. It has not yet been offered to the legislative body.
The Lugar proposal is a buyout plan which would end the Federal tobacco program.
The Ford proposal would compensate growers for lost quota while maintaining the Federal program.
The Robb proposal would buyout the quota, end the Federal tobacco program, and privatize the program by issuing licenses to grow and sell tobacco based on the average quantity of tobacco grown during a base period. Buyers and sellers of tobacco would pay all the program expenses.
All are merely proposals at this time. Congress will consider various proposals for compensating the industry for the loss of quota during its 1998 session. The Georgia Farm Bureau will be conducting county meetings which will allow for grower input into formulating a proposal which will be supported by the Georgia tobacco industry. More details on the Settlement and the Buyout proposals will be available in the media, your local Farm Bureau Office and from your local county extension agent
Thank you for calling the Georgia Tobacco Hotline, presented by the University of Georgia Extension Tobacco Team and brought to you by the makers of Orthene 75S.
