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Senators target tobacco crop insurance subsidy

By Josh Richman
Tuesday, May 21st, 2013 at 6:00 am in Agriculture, Dianne Feinstein, John McCain, U.S. Senate.

Taxpayer-subsidized crop insurance for tobacco production would be eliminated under a farm-bill amendment introduced Monday by U.S. Sens. Dianne Feinstein and John McCain.

Tobacco fieldThe senators say their amendment would save $333 million over the next decade, and direct all savings to be used to reduce the federal budget deficit. Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., has indicated the amendment will get a vote.

“It’s time for the American taxpayer to get out of the business of subsidizing tobacco—once and for all,” Feinstein, D-Calif., said in a news release. “Tobacco costs our economy $200 billion in health care costs and lost productivity each year. In this challenging budget environment, we simply can’t afford to spend hundreds of millions of dollar to incentivize farmers to grow this crop.”

The Fair and Equitable Tobacco Reform Act of 2004 ended most direct taxpayer support programs for tobacco production. But despite this $10 billion buyout pact, the U.S. Department of Agriculture still offers heavily subsidized crop insurance policies to tobacco farmers. Last year, USDA offered eight separate tobacco insurance products costing $34.7 million in taxpayer subsidies; records show more than $276 million in such subsidies have been spent since 2004.

“It turns out Joe Camel’s nose has been under the tent all this time,” McCain, R-Ariz., said in the news release.

The Centers for Disease Control and Prevention estimate that cigarette smoking adds $96 billion to domestic healthcare expenses and costs the American economy $97 billion in lost productivity every year; secondhand smoke adds another estimated $10 billion in healthcare costs and lost productivity.

Tobacco farmers will still be able to buy policies from existing insurance providers at market rate under the Feinstein-McCain amendment, which is supported by the Environmental Working Group, Taxpayers for Common Sense and the American Cancer Society.

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  • RR senile columnist

    The tobacco industry is in decline in many markets, including the US, but it is still a big export item measured in tens of billions. As for its morality, in the long run we’re all dead, whether from more easily preventable causes to disasters and other unforeseen events. The debate rages.

  • JohnW

    @1 “…tobacco industry is in decline…”

    Sad, very sad.

    I lived in Raleigh-Durham, NC for a couple of years. I thought it amusing to drive by the world class Duke University Medical Center while taking in the whiff of tobacco from the local industry.

  • Elwood

    A doctor told me:

    “Life is a sexually transmitted terminal disease.”

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