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September 2004 Volume 10 Number 4Midwest, Southeast: Tobacco
Mexican immigrants are changing the face of many small towns and cities across the Midwest and southeast. The Journal of Employee Assistance in September 2004 reported that acculturation increases rather than decreases drinking among Mexican men, in part because of the stress associated with being alone during weekends and holidays. << back Barron, a city of 3,400 that is the self-proclaimed turkey capital of Wisconsin, has been transformed by Somalis arriving to work at the Jennie-O Turkey plant, the city's largest employer- 12 percent of Barron's residents are Somali, most of whom arrived since 2000. Somalis are 200 of the plant's 1,250 workers, earning wages that start at $9.25 an hour for cutting, blending and packaging meat. Tyson Foods, with 120,000 employees in 140 chicken, beef, and pork processing plants; about a third of the Tyson plants are unionized. Tyson is considering mechanizing some of the jobs on its dis-assembly lines. Tobacco. Tobacco farmers are the largest employers of H-2A guest workers, but the number of migrants could fall sharply if a federal tobacco buyout bill is approved. Both the House and the Senate approved plans in 2004 to buy out the tobacco quotas farmers need to receive government-guaranteed prices for their crop, potentially offering a $10 to $12 billion windfall to quota or allotment owners, a third of whom are in North Carolina. There are about 430,000 holders of tobacco quota, and one percent are expected to receive more than a million dollars each. There were 70,094 quota owners and 10,118 tobacco farmers in North Carolina in 2002; 85 percent of the people who would get payments through the tobacco buyout are not growers. Under the House plan, quota owners would receive $7 a pound for their allotments, and tobacco farmers would receive $3 a pound for the tobacco they grew in 2002- many farmers rent quotas, paying about $0.50 a pound in 2003. Under the House plan, $3.7 billion would flow to North Carolina over five years, and the largest 10 percent of the 65,500 quota owners and tobacco farmers would receive 60 percent of the pay out. [The House version of the bill offers $10 billion financed by general tax revenues, while the Senate version of the bill offers $12 billion financed by a tax on cigarettes]. Dale Bone is the largest owner of tobacco quota in North Carolina- he has the right to sell about 400,000 pounds of tobacco at a government-guaranteed price of about $1.85 a pound in 2003. Bone farms 5,500 acres in four counties in Eastern North Carolina, growing cucumbers, sweet potatoes and cantaloupes in addition to tobacco. Farmers who do not own quota pay $0.35 to $0.40 a pound to lease a tobacco quota. The tobacco quota was issued in the late 1930s in allotments of less than 10 acres as a way to prop up prices and incomes. In recent years, US cigarette makers have reduced the amount of US tobacco in cigarettes- about half of the leaf used in the US is imported. In 2002, peanut quota holders received 55 cents per pound when the government took back their quota, and the top 10 percent of peanut subsidy recipients in 2002 collected 62 percent of the payments. A state-funded tobacco program in Maryland, launched in 2001, reduced the number of tobacco growers in the state from 1,000 to 150 by 2004. The US Department of Justice is asking for the disgorgement of $280 billion in allegedly ill-gotten gains from the tobacco industry in a September 2004 trial, the largest amount ever sought by Justice in a civil case. Tobacco companies agreed to pay $246 billion to settle state suits, but with payouts stretching over 25 years, this payment has become a tax on smokers. The tobacco companies argue that their production and marketing activities were approved by the government, but the trial is expected to keep them on the defensive. Philip Morris, with about a 50 percent market share, supports the buyout legislation in Congress that could end the federal suit and give the Food and Drug Administration authority to regulate tobacco products; other tobacco companies oppose the buyout. Vanessa O'Connel, "Bill to Aid Tobacco Farmers Hinges On a Windfall for Landowners," Wall Street Journal, August 31, 2004. David Rice, "Buyout or Handout?" Winston-Salem Journal, August 1, 2004. Mark Johnson, "Diversity and growing pains come to small-town Wisconsin," Milwaukee Journal Sentinel, July 25, 2004. |