(Updated September 2009)
NASDA recognizes the vital work performed by FDA in the areas of food and drug safety, in particular in light of the many threats to the sanctity of our food production, distribution, and preparation systems. NASDA believes any expansion of the FDA’s duties and jurisdiction into the area of tobacco product regulations would dilute the agency’s effectiveness in carrying out its core functions and jeopardize its ability protect America’s food system. In addition, NASDA is concerned that implementation of FDA regulations could significantly affect existing laws regarding the growing, cultivating or curing of raw tobacco at the farm level. NASDA believes that imported leaf and cigarettes should be held to the same standards as domestically grown leaf or manufactured cigarettes.
Regulation and Classification of Tobacco
Tobacco is vital to the economy and social fabric of all tobacco growing states by providing jobs and income for thousands of farm families and generating billions of dollars annually in federal, state, and local tax revenues. Federal tax revenues go directly to the general fund of the United States. Cigarettes, cigars, and smokeless tobacco products (chewing tobacco and snuff) remain legal products. There is unanimous agreement that children should not use tobacco products and every state in the Union already has laws that prohibit the sale of tobacco products to minors.
NASDA requests that USDA, Risk Management Agency (RMA) treat all states equally in setting price elections for tobacco at levels which offer adequate risk protection and take into consideration the true cost of production for each type of tobacco. We encourage RMA to set appropriate levels of insurance coverage to reflect the true market price of each type of tobacco sold at market. We also request that RMA treat tobacco fairly relative to all other fully covered and insured crops. Furthermore, we support stricter enforcement of rules necessary to prevent fraud and abuse of the Federal Crop Insurance Program.
NASDA supports efforts of tobacco leaf dealers and manufacturers to continue offering full production contracts to tobacco producers that cover costs of production and adequately compensate tobacco producers with a fair profit. We recommend that no new laws or regulations be created that would hinder the current system of marketing tobacco.
NASDA recognizes the significant positive economic impact that domestically produced leaf tobacco exports have on farm economies. We request that U.S. government regulations do not hinder these efforts. We further request that USDA, Foreign Agricultural Service, not discriminate against tobacco, but treat tobacco as any other crop that receives export assistance.
Federal Excise Taxes
NASDA supports the intent of the State Children’s Health Insurance Program (SCHIP). However, NASDA opposes the use of increased federal excise taxes on tobacco products to fund federal health insurance programs and believes more equitable funding options should be used. Such taxes will likely not meet the revenue targets they were designed to supply and will certainly have a negative impact on employment, farm preservation and agribusiness development in states whose economies are supported by tobacco production and manufacturing.