Post-Buyout prospects

摘要

A new era dawned on the United States leaf tobacco market on October 22, 2004. That is the day that President George W Bush signed legislation into law that provided a US$9.6bn buyout of US tobacco quotas and eliminated the federal tobacco programme. After more than a decade of discussing various buy-out proposals, Congress finally approved the buy- out, and subsequently, free market leaf tobacco production and marketing was achieved. The action has been hailed by many as the most significant change in US agricultural policy in more than 50 years, due to its financial size and the scope of people affected. It certainly was the most noteworthy adjustment to US tobacco policy since the federal programme was created in the 1930s. Universal had been calling for significant change in the programme for more than a decade, and we were pleased that the buyout was achieved. We repeatedly stressed to members of Congress and to grower leadership that the only way for US leaf to become more price competitive in the world market was to allow the market -to work without artificial restrictions on production or prices. The complete elimination of the federal tobacco programme has achieved this.