Tobacco Company

The Changing Political Environment For Tobacco – Implications for Southern Tobacco
Farmers, Rural Economies, Taxpayers and Consumers
A. Blake Brown, William M. Snell, and Kelly H. Tiller
Since the early settlers discovered tobacco being grown by native North Americans,
tobacco has been an important commodity in the south. But it also been a very controversial one.
The tobacco debate has intensified during the 1990's. Existing and proposed regulations and
restrictions, excise tax increases, health issues, changing social attitudes towards tobacco use,
litigation, and international competition have induced much uncertainty regarding the future of the
tobacco program, tobacco farming, and many southern rural economies. All of these issues were
intensified and highlighted during last year's lengthy debate over a national tobacco settlement.
The debate prompted visits to tobacco-producing states by President Clinton and Secretary of
Agriculture Glickman and consumed an unprecedented 3 ? weeks of debate on the U.S. Senate
floor. Although national tobacco settlement legislation never materialized in 1998, the tobacco
companies and the states' attorneys general were successful in developing an agreement to settle
existing state Medicaid lawsuits in exchange for tobacco industry agreement to change some of
their marketing practices and payments in excess of $200 billion over 25 years. While the
growers were not part of the settlement, the following statement was included in the agreement:
"Whereas, the participating manufacturers recognize the concern of the tobacco grower
community that it may be adversely affected by the potential reduction in tobacco
consumption resulting from this settlement, (the manufacturers) reaffirm their commitment
to work cooperatively to address concerns about the potential adverse economic impact
Paper Presented at the Southern Agricultural Econ…