Lost in the Weed
2nd July 2009
When President Obama signed legislation in mid-June to bring tobacco under FDA regulation, few seemed outraged that the legislation had been co-written by Philip Morris USA (PM). The bill was designed, critics say, to stabilize the place of cigarettes in our society: to diminish the threat of health-related lawsuits, to prevent competitive yet possibly safer products from being introduced, and to lock in Philip Morris’ market share. It’s not just the Harvard School of Public Health leveling these charges but even Sen. Bob Bennett, Republican of Utah, a supporter of the intent of the bill who was nonetheless “convinced we would do better if we told Philip Morris to stay out of the process of writing tobacco legislation.”
Five years after the tobacco buyout, and with the second prong of tobacco legislation newly passed, it’s worth checking in. As with other crops, the government had for years been paying some farmers not to grow tobacco to maintain prices for those who did. By the time 2004 rolled around, nearly 85 percent of tobacco permit holders weren’t growing tobacco at all. The permits were being bought and sold for their annual cash payments, like some sort of strange tobacco bond. The quota system, which could have been used to end domestic tobacco production altogether, worked in that it kept prices high and kept small farmers in business.
According to one story on the buyout, some farmers have stopped growing commodity crops like corn and wheat to switch to the wildly more profitable tobacco crop. “A reasonable profit for an acre of corn is about $100. For tobacco,” T.J. Vaughan said in that story, “it’s $1,000 to $1,500.”
With this new FDA move, no doubt tobacco will soon be added to the War on Drugs. I’m sure the Mafia is rubbing its hands and counting up the potential profits, with memories of Prohibition fresh in everyone’s mind — except that of the bureaucrats in Washington.
Those who do not learn from history are condemned to repeat it.