1The Changing Political Environment For Tobacco – Implications for Southern Tobacco Farmers, Rural Economies, Taxpayers and Consumers

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 growe