Beginning with the next tobacco harvest, farmers in
Maryland will be paid for not growing tobacco, part of a program begun by the state to end tobacco growth in the state.
Earlier this year the Maryland State legislature approved legislation that would direct funds to farmers who agree to stop growing tobacco. The funds to be used for this program are part of the Master Settlement Agreement between tobacco manufacturers and a majority of the states, an arrangement that settles the various states’ claims to recover health-care costs associated with tobacco use. Over the next 25 years the nation’s leading tobacco companies will be paying out approximately $206 billion, of which Maryland will receive over $4 billion.
With the settlement money, Maryland is planning to launch anti-smoking efforts state-wide, focusing on minority communities, to invest in cancer research and treatment, and fight illegal drugs. In addition to these programs, $78.8 million has been earmarked for tobacco growth cessation. The payments are to last for 10 years, allowing “hard-working farmers [to] transition out of tobacco, and into wholesome, productive crops, closing the book on Maryland’s history as a tobacco state,” commented
Maryland Gov. Parris Glendenning in his State of the State address.
“We must take this historic opportunity to plant deep roots in our fight against cancer and smoking,” said Glendenning. “As long as we remain true to our vision, by investing in cancer treatment, education, prevention, and research, by dramatically reducing smoking, and by helping our farmers transition into life-sustaining crops, then we can begin to save thousands of lives.”
For those growers who choose to participate, the state government will give them one dollar for every pound of tobacco the farm historically has produced, calculated by averaging the tobacco production for 1996 to 1998. Although this payment is $.66 less than the market price for tobacco, the farmers do not have to pay for seed, labor and other tobacco-growing costs. As a provision of the program, the land must be under cultivation, either by growing alternate crops or raising livestock
Critics, however, feel that the money should not be directed towards tobacco growers.
“The money should be returned to the taxpayers in the form of a tax cut or smoking cessation programs,” commented Maryland State Sen. Andrew Harris, the only senator to vote against the legislation. “The suit was about restitution to the people in our state. Not a dime was given back to the people.”
Another criticism of the program is the amount of funds distributed to it. Original projections predicted that roughly 30 to 40 percent of the tobacco farmers would take advantage of the state program. Since that time, however, about 60 percent of the growers have expressed an interest in the program. According to the Tri-County Council of Southern Maryland, the government agency that will be administering the program estimates the average tobacco farm will receive about $20,000 a year from the state.
“There is not enough money set aside to pay the farmers to stop growing tobacco,” said Harris.
Although Maryland’s tobacco production has dropped dramatically over the past 50 years, some estimated 1,200 farmers cultivate approximately 6,500 acres of tobacco plants. Last year, Maryland tobacco farmers produced 9.4 million pounds of type 32 tobacco, a special type of the plant that is predominantly sold to Europe. Although tobacco, grown mostly in the southern part of the state, accounts for 70 percent of the farmers’ income, it is grown on only about 5 percent of the land.
Currently, however, tobacco growers across the nation are receiving direct payments from tobacco companies. As a side settlement to the Master Settlement Agreement, the nation’s leading tobacco companies agreed to pay into a $5.15 billion trust fund that would compensate growers for the projected decrease in the demand for their crop. Begun in 1999, this trust will pay all 1998 Type 32 tobacco growers for a period of 12 years.
If Maryland’s crop transition program is successful, it could serve as a blueprint for other states facing a decline in their major cash crop.
