[20051231]RS20802_烟农援助.pdf

Congressional Research Service The Library of CongressCRS Report for CongressReceived through the CRS WebOrder Code RS20802Updated December 31, 2005Tobacco Farmer Assistancename redactedAgriculture Policy SpecialistResources, Science, and Industry DivisionSummaryEfforts to reduce tobacco consumption in the United States, stimulated by the 1998Master Settlement Agreement (MSA), contributed to a sharp decline in the demand forU.S.-grown tobacco. The other major contributor to the long term decline in domesticas well as foreign demand was the federal price support program, which limited supplyand raised the price of U.S. tobacco above competitive market levels. Consequently,foreign-grown tobacco displaced U.S. tobacco in both domestic and world markets.Because of the drop in demand, farmers asked for and received compensation andassistance from cigarette manufacturers and the federal government. Manufacturers, inconjunction with the MSA, pledged $5.15 billion in payments to farmers to bedistributed over 12 years. Also, Congress approved $328 million in tobacco losspayments to farmers for FY2000, $340 million for FY2001, another $129 million forFY2001, and $55 million for FY2003. In ad