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Leaf buyout tolls end of era
Blake Brown, economics
Lawyers
vie in District 11
NCSU Alum, politics
Two vie
for Wake District Court seat
NCSU Alum, politics
Burr,
Bowles share credit
Andrew Taylor, political science
CAREER
MOVES: On the boards
NCSU Entrepreneurship Education Iniative of the College of Management elected
2004-2005 board of advisors
'Hallelujah':
Buyout hailed
Andrew Taylor, political science
N.C.
State's new chief
Chancellor-elect James Oblinger
Buyout
clear for signature
Blake Brown, economics
Passage
of quota is a win for Burr
Andrew Taylor, political science
Oct. 12, 2004
News and Observer
By KRISTIN COLLINS
© Copyright 2004
Congress voted Monday to end the federal tobacco price support program that, for more than six decades, allowed tens of thousands of North Carolina families to pull a living from the land.
In its place, those who invested in and profited from the system nationwide will get $10.1 billion and a chance to rebuild a failing industry.
The U.S. Senate voted 69-17 to dismantle the program. Farmers can continue to grow tobacco, but without government supports its price will fall sharply.
Those who farm tobacco in North Carolina or own rights to grow it here will get about $3.8 billion, or 40 percent of the total. A large share of the money will go to rural Eastern North Carolina, the state's poorest region.
"A way of life we've known for 60 years is gone," said Keith Parrish, a Harnett County tobacco farmer and head of the National Tobacco Growers Association. "It is a happy day and a sad day. There's a lot of mixed emotions among the farmers. But we've got some jingle now in our pockets, so we have options."
The buyout was passed as part of a $136 billion corporate tax bill. It was approved in the House last week and needs only the president's signature to become law, a step widely considered a formality.
Its passage concludes more than two years of fierce political battle between farm advocates and legislators who saw it as a giveaway.
It ends a program that limited the amount of tobacco grown, which propped up the price and made tobacco North Carolina's most lucrative crop. The quota system allowed farmers to make a secure living on as little as 10 or 20 acres. But during the past decade, the demand for pricey American tobacco dropped sharply as cigarette companies looked to countries such as Brazil and China for cheaper leaf.
Since 1997, declining demand forced the federal government to cut quota -- the amount of tobacco that farmers could grow --by more than half. Now, farmers say, a buyout will allow them to pay debts, then decide whether to leave farming or try growing tobacco without price support.
"What we were facing without this buyout was catastrophic," said Larry Wooten, president of the N.C. Farm Bureau. "This will allow our farmers to make decisions with dignity."
'Legislative miracle'
Although the government originally handed out tobacco quota for free, it has become a valuable commodity that can be sold, passed to heirs or rented to farmers. Many in rural North Carolina bought quota as a retirement investment, and others are still paying off debt from buying it.
Buyout legislation was hampered by disputes among key players. Health groups and Philip Morris, the nation's largest cigarette manufacturer, wanted a buyout paired with federal regulation of tobacco products. Other cigarette companies opposed regulation, because it would limit advertising and hurt their ability to compete with Philip Morris.
Congress was divided over regulation and over how to pay for the buyout, and legislators from non-tobacco states called it a giveaway to farmers.
For years, the buyout appeared doomed in Washington. This year, tobacco state legislators attached the buyout to the tax bill, which had broad support.
"What has been accomplished is a legislative miracle and a monumental achievement," Sen. Elizabeth Dole, a Republican from Salisbury, said Monday before voting for the buyout.
North Carolina's other senator, John Edwards, was campaigning for vice president and didn't vote, though he said he supported the bill.
Help for rural N.C.
Tobacco farmers and quota owners will get $7 for every pound of quota they owned in 2002 and $3 for every pound they grew that year. Payments will be spaced evenly over 10 years. Those who quit farming or sold quota since 2002 will get partial payments.
The buyout will be the second large infusion of tobacco cash to come to rural North Carolina. The 1998 tobacco settlement agreement gave North Carolina $4.6 billion over 25 years, more than half of which goes to rural economic development. Another part of the settlement gave nearly $782 million in direct payments to tobacco farmers since 1999.
Now, about 76,000 people in North Carolina will get buyout checks. Two hundred sixty-nine people will get more than a million dollars, but most farmers and quota holders will get more modest amounts.
The economic impact is hard to gauge. Many farmers say it will go to pay debts, and some quota holders say buyout payments will merely replace the income they once got from renting quota.
Economists caution that the buyout won't be a panacea for a rural economy that has shed tens of thousands of jobs in manufacturing and farming.
"It takes more than a large sum of money to turn a whole economy around," said Blake Brown, an N.C. State University tobacco economist. "But it certainly will have an impact on rural communities."
Steve White, owner of White's Tractor and Truck in Wilson, is counting on it. "There will be farmers who need to reinvest in new equipment, and this will be their opportunity," White said.
Bittersweet news
As news of the buyout's passage spread across farm country Monday, many farmers said they were relieved. "Without this buyout, half of us were just going to go broke," said Jimmy Pate, who grew 30 acres of tobacco this year in Robeson County.
They were also facing an uncertain future. Most weren't sure whether they would be growing tobacco next year. It all depends on what price cigarette companies offer.
David Gardner, who farms with his son in Harnett County, was worried the buyout would force him out of the profession. Tobacco made up about half his income this year.
"I don't want to get out of it," said Gardner, 56. "I love to farm. That's all I've ever done."
What they're saying
" I told them in Washington, when they passed this thing, if they stepped outside, they'd hear North Carolina cheering. We were to the point where, if we took another quota cut, many, many people were going to have to exit the business. At least this gives them an opportunity to make a decision."
STEVE TROXLER,
Republican candidate for state agriculture commissioner
"This is a big, big day. I'm excited for what it's going to mean for the future of agriculture in this state. We've got farmers who can grow the best tobacco in the world, and this is going to give them a chance to grow more."
BRITT COBB,
Democrat, state agriculture commissioner
Top 10 N.C. recipients
IN MILLIONS OF DOLLARS; ALL OWN QUOTA AND GROW TOBACCO
Barnes Farming Corp., Spring Hope 7.4
Wayne Kelly, Sanford 5.1
Worthington Farms, Greenville 4.4
Horace Wood, Thurmond 4.3
G. Brownie Gainey, Laurel Hill 3.8
Tull Hill Farms, Kinston 3.8
Jimmie Ross, Carthage 3.6
James K. Smith, Four Oaks 3.5
Richard Tyson, Nashville 3.4
R.D. Lee Farms, Sanford 3.3
For more information
The Environmental Working Group has posted a searchable database showing estimated buyout payments for every tobacco farmer and quota owner in the country. Go to: www.ewg.org/farm/tobaccobuyout.php
Staff writer Kristin Collins can be reached at 829-4881 or kcollins@newsobserver.com.
Staff writers Mandy Locke and Amy Martinez contributed to this report.
Oct. 12, 2004
News and Observer
By MANDY LOCKE
© Copyright 2004
SMITHFIELD -- A Harnett County native anxious to win back a judgeship he surrendered 12 years ago faces a Bible-quoting defense lawyer from Johnston County in a race for a District Court seat in Johnston, Harnett and Lee counties. O. Henry Willis of Dunn and James Ethridge of Smithfield are fighting for one of the eight District Court judgeships in the 11th District.. Willis served as District Court judge from 1987 to 1992; Ethridge ran unsuccessfully for a District Court judgeship two years ago.
Incumbent Ed McCormick of Lillington will retire at the end of this term, creating the open seat.
Neither Willis nor Ethridge thinks the District Court system in this tri-county
district needs an overhaul. Both praised the seven other District Court judges
and vowed to do their part in efficiently managing a growing caseload.
The job
That's where their similarities end.
Willis, 53, who was born three blocks from his law office in Dunn, said he has been riding a wave of good fortune since college. Armed with a bachelor's degree from N.C. State University in 1975, Willis was in first class of Harnett County sheriff's deputies assigned as resource officers in local high schools. A year later, Campbell Law School opened, and Willis signed up for the charter class.
"I was literally there helping them hang shelves in the law library," said Willis, who was interviewed in Dunn. "Everything just fell into place."
After graduating in 1979, he borrowed $2,000 from his mom, bought a secretary's desk on sale and hung a shingle outside a one-room office in Dunn.
Willis built a career as a trial lawyer, handling domestic relations cases. In 1987, a District Court judge in Harnett County was appointed to the state Court of Appeals. Colleagues in the Harnett County Bar Association nominated Willis to take the empty seat; the governor concurred. He claimed the seat again a year later in an uncontested race.
"After practicing law for seven years, it was hard all of the sudden to wear a robe," said Willis. "But I adjusted pretty well."
Willis hung up his robe in 1992 and headed back into private practice when he faced college tuition bills for his three teenage sons. The youngest, now 21, is finishing up at Fayetteville State.
Willis said he is well-suited to be the face of the court system for residents of District 11.
"District Court judges see on one day more than any other judge," he said. "The emphasis should be on dealing with people and giving them their day in court."
Ethridge, 58, grew up in Wendell and walked four miles to school, past the all-white school a half-mile from his home.
"I was able to live in that era and not become an extremist," he said. "It made me a stronger person."
Ethridge has been walking a lot again lately, shaking the hands of citizens in the district. He hands them a flier that outlines where he stands every hot button issue -- gay marriage, abortion, tax rates. He believes marriage is a union between a man and woman, that government shouldn't support or pay for abortions and that tax rates ought to be low.
Ethridge, who switched to the Republican Party two years ago because he said it espoused traditional values, said faith in God is essential for a judge.
"I believe a judge should be a God-fearing person," he said. "If they are, they'll be fair and impartial." Ethridge said if he became judge, citizens and lawyers will notice his faith "through his speech and in his mercy."
Ethridge bills himself as a "commoner" who can relate to the farmer, the factory worker and the person who's down on his luck. He started college at N.C. Central University and later earned his law degree from the same university.
Ethridge said he's anxious for a shot at the bench.
"I've never had opportunity to be judge," said Ethridge. "If you put the confidence in me, I won't give it up unless the president of the United States asks me to sit on the Supreme Court."
District Court judges typically hold court every day hearing traffic and misdemeanor criminal cases, cases involving abused and neglected children, juvenile delinquents and involuntary mental commitments, as well as domestic disputes and lawsuits involving less than $10,000. They serve four-year terms.
Salary: Starts at $91,909
Term: Four years
O. Henry Willis Jr.James
B. Ethridge
Party Affiliation: Democratic
Home: Dunn
Born: Nov. 23, 1950
Family: Wife, Lisa; three sons, one daughter
Education: Bachelor's degree in politics with criminal justice concentration, N.C. State University, 1975; law degree, Campbell College, 1979
Occupation: Lawyer, O. Henry Willis Jr., P.A.
Political Experience: District Court judge of 11th Judicial District, 1987-1992
Top Priority If Elected: "To administer justice fairly and maintain confidence in the judiciary. District Court is truly the 'People's Court.' Most people who come before a judge, whether as parties or witnesses, have little or no experience in the legal system. I firmly believe in holding court in such a manner as to maintain dignity and respect for the court while at the same time affording each person the opportunity of presenting their case without fear or intimidation."
Contact: 910-230-3610 (office) and 910-892-4705 (home); ohenrywillis@earthlink.net
Party Affiliation: Republican
Home: Smithfield
Born: July 16, 1946
Family: Wife, Denise Butler; one daughter
Education: Bachelor's degree, N.C. Central University; law degree, N.C. Central University
Occupation: Lawyer
Political Experience: Former member of Democratic Men's Club, Johnston County; former member, Democratic Men's Executive Committee; chairman, East Springfield Precinct.
Top Priority If Elected: "I will be dedicated, hardworking and, above all, fair to those who appear before me. I will make sure that the citizens have an opportunity to express themselves in the courtroom, and I will never forget that I am working for them and enforcing the rules of law."
Contact: 934-0108; fax,
934-9664.
Staff writer Mandy Locke can be reached at 829-8927 or mlocke@newsobserver.com.
Two vie for Wake District Court seat
Oct. 12, 2004
News and Observer
By ANDREA WEIGL
© Copyright 2004
RALEIGH -- The race to fill the vacancy created by Wake District Court Judge William Lawton's retirement has pitted a domestic lawyer who was first in her law school class against an emergency District Court judge.
Donna S. Stroud, 40, is a political newcomer who has never run for public office. She seeks the same position as Emergency District Court Judge Donald W. Overby, 57, who has served on the bench for a dozen years. The pair were the top two vote-getters in a July primary.
Stroud, a Zebulon lawyer who practices in Wake, Johnston, Nash and Franklin counties, believes her performance as a law student at Campbell University Law School is proof that she can do the job of judge.
"I was first in my class all three years of law school, which was kind of unusual," she said. "To do that, you have to work really fast. You have to have a good memory and you have to get the right answers. Those are all things that a judge needs to be able to do on the bench."
Overby counters that his years of experience on the District Court bench and as a lawyer in District Court make him the more qualified candidate. "Well, it really gets down to experience," Overby said. "For the last 24 years, almost every day of my professional life, I have been in the courtroom."
On Nov. 2, voters will find Overby and Stroud listed among the other nonpartisan judicial candidates near the bottom of the ballot. When people have to go to court, they most often appear before District Court judges who hear traffic tickets, misdemeanors and divorce, custody and child support cases.
Stroud, a Kinston native, got her undergraduate degree in three years and then went to law school. For seven years, Stroud handled civil and criminal cases at a Wendell law firm before leaving to start her own firm with lawyer Andy Gay.
Since 1995, Stroud has primarily been a domestic lawyer in the law firm of Gay, Stroud & Jackson. She also is a certified Superior Court mediator and District Court arbitrator.
Stroud also believes she has the patience, respectfulness and professionalism to make a good judge. "We've all seen judges who are brilliant legally but don't have the right temperament," she said. "I have been told by lawyers that they do think I have that temperament."
Stroud is among an increasing number of judicial candidates refusing to take campaign contributions from lawyers. She is one of three candidates who have taken such a stand this election cycle -- up from one last time. She believes accepting money from lawyers who may eventually appear before her in court creates the appearance of unfairness.
"The District Court is the only place where you have the judge almost all of the time. You have the District Court judge acting as the trier of fact and applying the law," Stroud said. "I think that makes the District Court especially vulnerable."
Overby, a Raleigh native, was first elected to the District Court bench in 1988. He was among the first North Carolina judges to be certified as an expert in juvenile law. He developed a reputation for his creative sentencing of youthful offenders, such as ordering them to write an essay or look at graphic photographs of murder victims.
Overby also served on an advisory committee for Gov. Jim Hunt's Commission on Juvenile Crime and Justice.
However, Overby lost re-election in 1996 and lost a bid to the Superior Court bench in 2000.
Since that time, he has travelled the state working as an emergency judge, filling in when elected judges are sick, on vacation or need time away from the bench to write orders. Overby says he has been called in to handle difficult cases, in particular criminal trials where probation officers and lawyers were the defendants.
"I have always taken great pride in the fact that everybody from all aspects of the judicial system have given me high marks -- defense lawyers, prosecutors, police officers, probation ... ," Overby said.
Overby works as a certified mediator and teaches criminal law at N.C. State University.
Overby has been endorsed by the N.C. Police Benevolent Association, the Raleigh-Wake Citizens Association, the N.C. Association of Educators and the N.C. Association of Women Attorneys.
THE JOB
Description: District Court judges typically hold court every day, hearing traffic and misdemeanor criminal cases; cases involving abused and neglected children, juvenile delinquents and involuntary mental commitments; and domestic disputes and lawsuits involving less than $10,000.
Salary: Starts at $91,909
Term: Four years
DONNA S. STROUD
Party affiliation: Republican Home: 10724 Hunt Run Circle, Zebulon
Born: June 28, 1964 Family: Husband, J. Wilson Stroud; two sons
Education: Campbell University, B.A. summa cum laude in government, 1985; Campbell University School of Law, J.D., magna cum laude, 1988.
Occupation: Attorney, founding partner in the law firm of Gay, Stroud & Jackson, LLP, in Zebulon.
Political experience: GOP precinct chair
Civic activities: Wendell Chamber of Commerce, director, 1990-93, president, 1994; Zebulon Junior Woman's Club, 1995-2001, president, 2000-2001; Zebulon Woman's Club, 2002-present; Zebulon Baptist Church, various leadership positions within the church, most recently as an administrative deacon and trustee; handbell choir; Zebulon Parks and Recreation youth sports sponsor, 1995-present.
Religious affiliation: Zebulon Baptist Church Hobbies: Reading, handbells, cooking
Political hero: Jesse Helms Favorite movie: "Monty Python and The Holy Grail"
Top priority if elected: Fairness and integrity from the bench are my priorities. I will use my excellent academic background along with my extensive practical experience to serve as a fair and efficient judge. I have demonstrated my abilities by remaining first in my class through all three years law school and by my 16 years of practical experience as an attorney representing clients on a daily basis in District Court. I have also served as a Certified Superior Court Mediator and District Court Arbitrator. In order to avoid any appearance of impropriety as to my impartiality and fairness, I will not accept campaign contributions from attorneys, since those attorneys may appear before me in court. I will be a judge who treats all people fairly and according to the law.
How to contact: Web site: StroudforJudge.com; phone: 269-2234 ; e-mail: StroudforJudge@aol.com; mail: P.O. Box 503, Zebulon NC 27597
DONALD W. OVERBY
Party affiliation: Democrat Home: 911 W. Peace St., Raleigh
Born: Sept. 29, 1947 Family: Two daughters, one grandson
Education: B.A., East Carolina University, 1972; graduate school, ECU, 1973; J.D., Campbell School of Law, 1980; National Judicial College, 1989, 1992
Occupation: Emergency District Court judge Political experience: District Court judge, 1988-96
Civic activities: U.S. Army, 1968-69; board member, Carolina Dispute Settlement Services, 1995-present, president, 1995, 1998-present; Courthouse KidsCenter founder, board member, 1995-present, board chairman, 1996-99; board member, Carolina Corrections, 1998-2001; board member, Cary Jaycees, 1974-76, 1981-83, life member
Religious affiliation: Baptist, member Colonial Baptist Church, Cary
Hobbies: Fishing, boating, sailing, softball, motorcycles Political hero: Abraham Lincoln
Favorite movie: "Band of Brothers"
Top priority if elected: I have served as a District Court judge for 12 years and have earned a reputation as an excellent judge, not only in Wake County but across the state. I am known for being hard on criminals who deserve it, yet fair to all. I remain compassionate about the law and remain a student of the law. I have worked diligently to improve the judiciary in any way possible and to restore confidence in the judiciary. Judges should be held to a very high standard. Since I have held this position for some time, I have been measured by that standard and found to be excellent. I will continue to serve in the manner which has earned me this reputation and continue to work very hard to improve both myself and the judiciary.
How to contact: Tel. 630-2887; e-mail: doverby2@nc.rr.com; Web site: judgeoverby.com
Staff writer Andrea Weigl can be reached at 829-4848 or aweigl@newsobserver.com.
Oct. 12, 2004
News and Observer
By DAN KANE
© Copyright 2004
In a race as close as North Carolina's U.S. Senate campaign, the question of who did the most to steer $3.8 billion to state tobacco farmers and quota holders might be the deciding factor come Election Day.
U.S. Rep. Richard Burr, a Winston-Salem Republican, helped negotiate the legislation that cleared Congress on Monday. His opponent, Erskine Bowles, a former White House chief of staff under President Clinton, lobbied Democratic senators to let the bill come to a vote.
Political observers say Burr probably will gain most from its approval. Burr can claim he quarterbacked the effort, while Bowles must settle for the unheralded role of an offensive lineman who prevented a sack.
"The fact that it is actually being done while Burr is in Congress will probably turn out to be a benefit for him," said Jack Fleer, a Wake Forest University political science professor.
But neither he nor Andrew Taylor, an N.C. State University political science professor, said that the election would necessarily hinge on the buyout. Taylor called it a marginal issue, while Fleer said voter turnout and President Bush's coattails would be bigger factors.
They also were less confident that voters would notice a significant detail in the package -- that it provides about $790 million less for North Carolina, compared with the Senate legislation that Bowles pushed. The Senate bill would have allowed the Food and Drug Administration to regulate tobacco products, something much of the industry opposed.
Burr said he backed the less lucrative, non-FDA bill because it was the only one House leadership would support.
"The only argument for the FDA bill ... was that was the only thing that could pass the Senate," Burr said Monday. "That was not the case, and because of that, farmers are going to get a check."
Farmers say they are glad to get the help. But some grumbled over what might have been.
Jerry West, a tobacco farmer from the Wayne County town of Fremont, said the bill Congress approved provides him about $500,000 less than the FDA bill. He and his sons now stand to make $1.2 million over 10 years instead of $1.7 million.
He said Burr looked out for R.J. Reynolds Tobacco Co. in Winston-Salem, rather than farmers.
"Me and my boys gave up a half a million dollars just so R.J. Reynolds would not have FDA regulation," said West, a registered Democrat who made an in-kind contribution to the Bowles campaign of about $300. "It was a blatant example of greed over need."
Sam Crews, president of the Tobacco Growers Association of North Carolina, said farmers should be thankful they got something instead of nothing.
Crews praised both candidates for getting a buyout through Congress.
"The alternative to this deal was absolute devastation," he said.
Staff writer Dan Kane can be reached at 829-4861 or dkane@newsobserver.com.
Staff writers Kristin Collins and Rob Christensen contributed to this report.
Oct. 12, 2004
News and Observer
By staff report
© Copyright 2004
For a copy of this article, contact News Services at 919-515-3470.
Oct. 12, 2004
Durham Herald-Sun
By GARY D. ROBERTSON: Associated Press Writer
© Copyright 2004
RALEIGH, N.C. -- North Carolina lawmakers and farmers praised final congressional passage Monday of a tobacco buyout deal that was years in the making and will pay $3.9 billion to the state's growers and quota holders over the next decade.
The $10.1 billion buyout deal was part of a $136 billion corporate tax package approved 69-17 in the Senate and now headed to President Bush to be signed into law.
"We have crossed the finish line," U.S. Rep. Mike McIntyre, D-N.C., said after the Senate gave final approval. "And a dream has come true for North Carolina."
The buyout is poised to end decades of leaf production under a Depression-era quota system that kept prices artificially high and critics said put U.S. growers at a disadvantage.
Under the quota system, a person has had to hold a quota to be able to grow a specific number of pounds of tobacco. Overall U.S. production has been limited to what domestic cigarette makers intended to buy, with unsold tobacco going into reserve.
Over the years, high prices and declining domestic demand for tobacco have caused U.S. cigarette makers to look to foreign growers for cheaper tobacco. The amount of tobacco that can be grown under a quota has tumbled nearly 60 percent since 1997, and tobacco growers worried the quota would fall even further in 2005.
With President Bush's signature, the government will pay $10 for each pound of quota. In cases where quota holders rent their allotments to other people to farm, $7 will go to the person who holds the quota and $3 to the farmer who rents it.
Payments, to be made over 10 years and funded by a fee on tobacco manufacturers, will be based on 2002 production levels. Those who quit farming before 2002 will receive nothing.
With about 76,000 tobacco farmers and allotment holders, North Carolina should receive the largest portion of the $10.1 billion buyout. About $500 million of the money will be used to buy all tobacco left in reserve from the quota system.
Farmers have said that with a buyout, those who want to get out of growing tobacco will be able to leave the business with dignity; those who remain will be able to pay off debts and buy equipment to better compete in the free market.
The payments also are expected to inject a financial shot in the arm for the state's anemic rural economy.
N.C. lawmakers on Capitol Hill who had ardently sought a buyout for years basked Monday in their triumph.
"Passing the tobacco quota buyout has been my top priority since arriving in the U.S. Senate and I'm thrilled that we were able to get this done," said Sen. Elizabeth Dole, R-N.C., who voted for the bill Monday.
Added Rep. Bob Etheridge, D-N.C., a part-time tobacco farmer who voted for the compromise bill in the House late last week: "Years of hard work by farmers, legislators and many others have paid off. Hallelujah! Praise the Lord!"
Democratic vice presidential nominee and North Carolina Sen. John Edwards was campaigning Monday and didn't vote. With the bill projected to pass by a wide margin, Edwards didn't see the need to return to Washington, said Mike Briggs, an Edwards spokesman.
Jimmy Lee, a Johnston County quota holder worried that the buyout comes too late to save the state's tobacco industry.
"It didn't have to wind up this way," said Lee, who this year rented out his allotment for the first time since starting to grow leaf 32 years ago. "It would have been a lot better if we had gotten it three or four years ago."
The buyout has been an issue in several North Carolina political races this year, including the tight U.S. Senate campaign between Democrat Erskine Bowles and Republican Richard Burr.
A five-term congressman from Winston-Salem, Burr served on the conference committee that recommended the compromise package.
He drew Bowles' ire last week when he voted against the Senate's proposed $13 billion buyout, which Bowles said would have meant $790 million more for North Carolina growers. That version also would have allowed the Food and Drug Administration to regulate tobacco as a drug, unlike the version passed Monday.
Bowles, who said he wanted a buyout with or without FDA regulation, traveled to Washington to lobby Democratic senators to support the buyout provisions. But Burr argued Bowles was ineffective because several senators he spoke to still didn't vote for the bill.
Andy Taylor, a political science professor at North Carolina State University, said the buyout's passage "takes the wind out of the sails of the issue" in the Senate race.
While the buyout affects a relatively small number of North Carolina residents, Taylor said the approval may help Burr in the election.
"There's still this notion that tobacco ... is at the heart of North Carolina interests," said Taylor, and that a Republican Congress and president got it passed.
Buyout to alter tobacco farming
Oct. 12, 2004
Charlotte Observer
By TIM FUNK
© Copyright 2004
WASHINGTON - Look for fewer tobacco farmers, but bigger tobacco farms.
Expect tobacco prices to go down, but the amount of tobacco grown to go up.
And with billions of buyout dollars flowing into North Carolina in the next 10 years, count on thousands of tobacco farmers to retire, but hundreds of others -- 243, in fact -- to pocket $1 million or more.
That's the picture of the future that emerged Monday, after a $10.1 billion tobacco quota buyout got final congressional approval.
By ending the 66-year-old federal tobacco price-support program in exchange for the buyout, Congress effectively deregulated the growing of the crop that built North Carolina.
And that will change a state whose long ties to tobacco can be seen in the very names of some of its cities (Winston-Salem), universities (Duke) and ball teams (Durham Bulls).
"It's going to be a different playing field," said Peter Daniel, assistant to the president of the N.C. Farm Bureau. "Anybody will be allowed to grow tobacco, but with no guaranteed price anymore, you'll have to be much more astute to make it. The risk will be greater."
Change was already happening. This will speed it along. But with an average payout of $21,982, growers who had seen the value of their quota drop by half in recent years will now have the money to make the transition a smoother one.
"An awful lot of (tobacco) growers are near retirement age. Now they'll go ahead and retire and transition out," said Blake Brown, an agricultural economist at N.C. State University. "And some of your smaller farmers will go to different crops; some others will look for employment off the farm."
That exodus, he and others said, will leave tobacco farming in North Carolina to the larger farms, which can gobble up more land to better compete with growers in places like Brazil -- where many cigarette companies go for flue-cured leaf these days.
"Tobacco is very expensive to grow -- very capital-intensive," said Daniel. "It involves equipment you can't use for anything else. (With the end of the federal price program), the price paid for (U.S.) tobacco will drop, which means farmers will have to become more efficient. The large farms will compete; smaller farmers will do something else."
Still, in two or three years, Brown predicted, North Carolina will be growing more tobacco than it is today.
That sounds bullish, but the cultural costs of the decline of the small farm in North Carolina must also be pondered, said Tom Lambeth, a senior fellow at the Z. Smith Reynolds Foundation -- a philanthropy created by its founders' wealth from tobacco.
"The state benefited for a long time from small, independent farms in small rural communities," said Lambeth, a member of the Rural Prosperity Task Force. "But the changing pattern has been that those people who'd like to stay in rural areas have found that that's not economically viable. So they move to the city."
Some of the buyout's biggest supporters have cast it as an economic development bonanza for rural areas.
Monday, on the floor of the U.S. Senate, Sen. Elizabeth Dole, R-N.C., made that case.
"This tobacco buyout will help not only the farmers and their families, but their hard-pressed communities," she said. "It is the retailers, equipment dealers, chemical and fertilizer dealers and a whole array of small local businesses that will also benefit from the tobacco buyout."
According to a county-by-county breakdown of where the payments will go, the ripple effect may be more like a splash in Eastern North Carolina farming counties such as Pitt ($262 million), Sampson ($141 million), Nash ($172 million) and Harnett ($100 million).
But along with the larger farmers who will become instant millionaires, the state's urban counties will also get a nice payday. That's thanks to being the home of quota holders -- farm family heirs, farm widows, retired farmers -- who have long since rented out their land.
Payments totaling $14.3 million will go to people in Mecklenburg County. For Wake County: $228 million.
Overall, North Carolina's 90,000-plus tobacco farmers and quota holders will get about $3.8 billion dollars over the next 10 years. In South Carolina, 17,000-plus people will get almost $800 million. Fifty-five of them will make $1 million or more.
Democrat Erskine Bowles and Republican Richard Burr -- N.C.'s two U.S. Senate candidates who stood to lose face and possibly votes if the buyout failed -- quickly moved to cash in politically on the buyout. Both had pressured their national parties to pass the measure or face losing N.C.'s Senate seat to the other party.
Oct. 12, 2004
Charlotte Observer
By staff report
© Copyright 2004
Members of a search committee looking for N.C. State University's next chancellor were struck by the depth of dean and faculty support for an insider candidate. As former lieutenant governor Bob Jordan of Mount Gilead described it, the university's deans are mavericks -- not the sort to easily agree on an issue. But on the subject of N.C. State Provost James Oblinger, he went on, they and the university's faculty strongly favored promoting him to succeed former Chancellor Marye Anne Fox. "We got the best of the best," Mr. Jordan said.
UNC President Molly Broad and the UNC Board of Governors unanimously agreed, anointing the 58-year-old provost to be N.C. State University's 13th chancellor, beginning Jan. 1. It was a highly popular decision and a wise one.
James Oblinger has an excellent reputation on campus as a scientist, administrator, dean of the College of Agriculture and Life Sciences and provost. It was Dr. Oblinger to whom Chancellor Fox turned in 2003 when the campus' previous provost -- the top academic officer -- resigned to protest the chancellor's firings of several popular staff members. Dr. Oblinger, who is known as a good listener and skillful communicator, helped heal some divisions on campus while enhancing the university's academic standing.
The search for a successor to Chancellor Fox -- who left to become chancellor at the University of California, San Diego in July -- took just five months -- considerably quicker than anticipated, partly because from the outset the committee was impressed by Dr. Oblinger's credentials, accomplishments and widespread support.
He is an Ohio native who earned his bachelor's degree at DePauw University and his master's and doctoral degrees in food technology at Iowa State University. He was professor of food science and human nutrition at the University of Florida and associate dean of the College of Agriculture at the University of Missouri-Columbia before heading to Raleigh 18 years ago to be associate dean of N.C. State's College of Agriculture and Life Sciences. He was made dean of that college in 1997.
The decision to promote from within was particularly gratifying to those aware of the high level of talent found in the UNC system. Dr. Oblinger's long and successful career at N.C. State gives him a grounding in the qualities that make it an important national university, the values North Carolinians cherish and the respect and expectations they have for their top public universities.
Oct. 12, 2004
Winston-Salem Journal, MEDIA GENERAL NEWS SERVICE
By David Rice and Peter Hardin
© Copyright 2004
WASHINGTON -- By a vote of 69-17, the U.S. Senate agreed yesterday to end a government program that has limited how much tobacco U.S. farmers can grow for the past 66 years. The bill now goes to President Bush for his signature.
As part of a $136 billion corporate-tax bill, the tobacco-quota buyout will pay farmers and quota owners $10.1 billion over 10 years in return for their quota, the government-issued license to grow tobacco.
The money will come from new assessments against tobacco companies. And the largest chunk - as much as $3.9 billion - will go to growers and rural landowners in North Carolina.
Sen. Elizabeth Dole, R-N.C., pointed out how farmers have seen quota cut by almost 60 percent in the past five years and face the prospect of a 33 percent cut for 2005. Dole said that the cost of renting quota drives up the price of U.S.-grown leaf, making it less competitive on world markets.
"With our action today, we come to the end of an era in tobacco policy. We stop conceding tobacco production to countries like China and Brazil. We stop foreclosures to thousands of farmers. And we stop the negative economic ripple effect throughout rural southeastern states," Dole said.
Longtime industry players said that the buyout and elimination of restrictions on how much tobacco farmers can grow is the biggest change for growers since quotas were adopted as supply controls in 1938.
"It's the most important piece of legislation for the tobacco industry in over half a century," said Tommy Bunn, the executive vice president of the Leaf Tobacco Exporters Association. "It is monumental, as far as impact."
Though some growers might choose an immediate infusion of cash, "With it spread over a 10-year period, I think it's more of a stabilizing factor to allow people to continue if they want, or to make a transition out if they want," Bunn said.
Currently, U.S. tobacco costs about twice as much as leaf grown in Brazil.
But industry observers expect the elimination of quotas and quota-rental costs for farmers to lower the price of U.S.-grown leaf, making it more competitive and allowing farmers to grow as much as they can contract to sell to domestic cigarette-akers and international leaf dealers.
"I think we'll see more international manufacturers putting their eggs in this basket," Bunn said.
Blake Brown, an economist at N.C. State University, projects that when farmers no longer have to rent quota to grow tobacco, the price of U.S. leaf should fall from about $1.85 a pound to $1.50 a pound in about three years.
Brown also expects the number of active growers in North Carolina to shrink from the current 8,000, many of whom have been waiting for a buyout to retire.
"We could easily go down to 2,000 or 3,000 after four or five years," he said. "We might have made that transition anyway, but now they have some financial assistance."
With the lifting of restrictions on where tobacco can be grown, Brown expects a gradual increase in the amount of leaf grown in eastern North Carolina. And he says that some farmers in the Piedmont might experiment with growing burley tobacco, which is currently confined to the mountains.
The buyout will pay quota owners $7 a pound for the amount they owned in 2002 and growers $3 a pound for the amount they grew in 2002.
Though some farmers had hoped for more, Sam Crews, the president of the Tobacco Growers Association of North Carolina, said that most are satisfied.
"I think it's the best deal we could have made, and I'm happy. Because I know that the alternative is absolute disaster," he said. "This is better than I ever thought we would get. I don't want to cry over spilt milk."
Not everyone is happy, though.
Health advocates wanted to see the buyout combined with regulation of tobacco products by the Food and Drug Administration - a move that industry leader Philip Morris USA supported. But R.J. Reynolds Tobacco Co. and other cigarette-makers opposed FDA regulation.
"We're happy that FDA's not in there and that the price-support system is eliminated, and that all manufacturers - not just the big three - will be paying for the buyout," said Tommy Payne, an executive vice president at Reynolds.
Some critics also view the buyout as agricultural welfare.
The Environmental Working Group, based in Washington, released a study in June that found that 67 percent of the buyout money would go to the top 10 percent of quota owners and 27 percent will go to the top 1 percent.
The group found that 462 individuals or corporations will become "instant millionaires" who get more than $1 million from a buyout, led by Barnes Farming Corp. of Spring Hope, N.C., which will get $8.1 million. The average recipient, though, will receive a total payout of $21,982, the study found.
"It's great that the companies are paying, but we're very disappointed that FDA regulation is not included," said Lauren Sucher, a spokeswoman for EWG. "The lack of a provision giving FDA oversight is a huge failing for public health."
But Sen. Mitch McConnell, R-Ky., said that the costs of the buyout are expected to force increases in cigarette prices. "People in the public-health community will tell you that the higher the cost of cigarettes, the fewer people use them. So there is a public-health aspect to this bill," McConnell said.
Larry Wooten, the president of N.C. Farm Bureau, is somewhat stunned that tobacco-state congressmen were able to pull off the long hoped-for buyout.
"It's just a little short of a miracle," Wooten said. "I told some people a couple years ago that it's going to just hard-knuckled politics - and it did."
The buyout built momentum because of a confluence of political factors:
- A remark by President Bush in May that the tobacco program didn't need to change, followed by Democratic presidential nominee John Kerry's assertion that he supports a buyout;
- Allegations in the North Carolina Senate race by Democrat Erskine Bowles that his opponent, Rep. Richard Burr, R-5th, wasn't working hard for a buyout and was doing Reynolds' bidding;
- And House Ways and Means Chairman Bill Thomas' need for votes from southern Democrats in the House to win passage of the big corporate-tax overhaul. Burr and several other tobacco-state congressmen came up with the idea to attach the buyout to the $136 billion tax bill.
"When they needed those 13 votes and the Democratic tobacco-state congressmen said, 'If you put the tobacco buyout in, we'll vote for it,' I began to think it was a possibility," Wooten said.
In part because the corporate-tax package was sprinkled with provisions wanted by legislators nationwide, it passed overwhelmingly as the Senate prepared to adjourn before November's elections.
For now, though, Crews and other tobacco growers are excited about the approval from Congress.
"It's everything for us. It's the moon, the sun and the stars," Crews said. "I mean, we were going to cut the lights out Dec. 15."
Until yesterday, that's when the 2005 quota was set to be announced.
• David Rice can be reached in Raleigh at (919) 833-9056 or at drice@wsjournal.com
• Peter Hardin is the Washington reporter for the Richmond Times-Dispatch.
Passage of quota is a win for Burr
Oct. 12, 2004
Winston-Salen Journal
By David Rice
© Copyright 2004
For months, Democrat Erskine Bowles has challenged Republican Richard Burr, his adversary in the U.S. Senate race, to put up or shut up with a buyout of government tobacco quotas.
With a final vote in the Senate yesterday, Burr and the rest of Congress put up, producing a $10.1 billion buyout that will put almost $4 billion into the hands of about 70,000 quota owners and farmers and rural North Carolinians over the next 10 years.
Angling for critical votes from the "Jessecrats" of Eastern North Carolina, Bowles charged for months that Burr was "on the sidelines" and "AWOL" in the push for a buyout.
Then he pointed out that Burr voted against a plan that would give an extra $790 million to North Carolina quota owners.
"This is someone who voted against a $13 billion bill because RJR told him to vote against it," Bowles said last week. "How somebody who's from North Carolina could vote against a $13 billion bill that would put another $790 million in the pockets of North Carolinians, I just don't understand.
"Both Richard Burr and I said we would vote for it with or without FDA. One of us told the truth," Bowles said.
Burr and other Republicans fought off regulation of tobacco by the Food and Drug Administration, which hometown cigarette-maker R.J. Reynolds Tobacco Co. opposed. Health advocates and industry giant Philip Morris USA wanted FDA regulation. Burr now boasts about putting checks in farmers' mailboxes - and he plans to do more boasting when he visits Rocky Mount, Wilson and Goldsboro on Saturday.
"At the end of the day, I'm going to be able to go home and tell farmers that it was the 108th Congress that got them checks," Burr said. "I don't think there's anybody who's going to not cash the check."
Farmers seem to agree.
"Richard Burr's still going to come out looking like a hero, even if I feel he left some money sitting on the table," said Richard Smith, a tobacco grower near Dobson in Surry County. "We would all rather have something than nothing."
Andrew Taylor, a political-science professor at N.C. State University, said that by winning approval for a buyout, Burr has retaken the issue from Bowles.
"The principal thing is it takes the issue away," Taylor said.
"However, I think it helps Burr at the margins, because he certainly got to vote for it and Bowles didn't," he said. "It would have been a negative for Burr if his opposition to FDA oversight had defeated the bill.... But it ends up being a positive for him.
"Tobacco is obviously receding in importance to the state. But it's still very important to the state's psyche, and he showed he can go to bat for the state's interests," Taylor said.
Scott Ballin, who heads a coalition of growers and health advocates who have worked for several years to build support for a buyout coupled with FDA regulation, said that the outcome in Congress was driven largely by Republican leaders' desire to help Burr in the Senate race.
"This is all about Richard Burr," Ballin said. "The question was, 'Where was Richard Burr for the last three years?' It wasn't until he started running for the Senate that we started to see him."
Ballin pointed out that Burr didn't back an earlier buyout bill with 43 bipartisan co-sponsors. "It took two years of work for people to get that far. All of that work was sort of dumped to let Richard Burr and R.J. Reynolds have their way," he said.
Burr defended his vote as a member of the House-Senate conference committee against a proposal that included both FDA regulation and a larger, $13 billion payout to farmers and quota owners.
"To get to the $13 billion, you had to accept FDA, and the House leadership had been very staunch in their opposition to FDA," he said. "We were not going to get so greedy that we cost ourselves the ability to get this signed into law."
If Bowles runs ads saying that Burr voted against a larger buyout, Burr questioned whether farmers will believe it. Farmers have heard plenty of promises through the years, he said.
"Erskine Bowles made a lot of promises that he couldn't deliver unless he was here (in Congress)," Burr said. "We're living up to a promise that we made early this year."
And in answer to Bowles' assertions that he did the bidding of R.J. Reynolds, Burr pointed to the fact that tobacco companies, not taxpayers - as proposed in a House-passed version of the bill - will pay for the $10.1 billion buyout.
"I think it should be a relief to taxpayers that the companies are footing the bill," he said.
He repeated his contention that the FDA is the wrong agency to regulate cigarettes because it can't assure their safety.
"All of it can be addressed, but clearly the FDA was an avenue that some people over time thought would allow them to choke this industry out of existence," Burr said.
Burr said that Democrats - and particularly Bowles, who traveled to Capitol Hill last week to lobby Democratic senators to support a buyout - were posturing.
"I'm convinced that they didn't want a buyout, they wanted an issue," he said. "I would say that Erskine Bowles desperately wants to play a part in a process he has no role in."
The Bowles campaign said yesterday that 14 Democratic senators whom Bowles met with last week voted for the buyout as part of a corporate-tax package.
"The real embarrassment is that Richard Burr sold out farmers to take care of RJR and their foreign tobacco producers," said Susan Lagana, a spokeswoman for Bowles' campaign.
But the Burr campaign said that six - including Sen. Jon Corzine, D-N.J., the chairman of the Democratic Senatorial Campaign Committee - voted against the buyout.
Republican congressional leaders also credited Burr with coming up with the strategy to win passage of a buyout.
"What we are trying to do is capture revenue and deliver it to a handful of states, which is not easy in a body that represents all 50 states," said Sen. Mitch McConnell, R-Ky.
"Had Richard Burr not realized the importance of the international tax bill ... we would not be where we are today," McConnell told reporters last week.
• David Rice can be reached in Raleigh at (919) 833-9056 or at drice@wsjournal.com
• Peter Hardin of the Richmond Times-Dispatch contributed to this report.