A Dog in This Fight

Think of it this way: If you had a business that was dropping by almost 10 percent in revenue per year on a small portion of one produc, how long do you think you could stay in business with that product?

And let’s say you are a businessman who is counting on more rather than less of a product. But you have just learned that instead of more, there not only will be a cut in production, but your taxes for that product are also going up.

You lose twice: on the production end and on the tax end.

What is that, you say? Not a good deal!

If you are in the pipe tobacco business retail or wholesale business today, that is precisely what you are facing, about a 10 percent drop in acres of production of all types of tobacco and an increase in taxes on the product.

But, wait, you say, I love my pipe tobacco and don’t want it to change. Ever!

Forget it. Change is coming, and it could be rapid, if not sooner. The train has left the station.

Tobacco today is the most highly concentrated and regulated industry in U.S. agriculture. There are no taxpayer safety nets underpinning this crop, as is the case with just about every other crop that comes across your dinner table.

The U.S. Department of Agriculture website is a wealth of information, if you have the nerves and patience to drill through the layers. You can find all this information for yourself, but you have to look and be diligent.

But here you will find something called the Fair and Equitable Tobacco Reform Act of 2004. There is really nothing fair or equitable about it. It is a federal buyout of tobacco farmers, and it tossed the tobacco farmer into the maw of the free market. It is about the same as closing your eyes and running downhil into a forest thick with trees. Pretty soon, you are going to be chipping bark!

At the time the law was passed and signed by President George W. Bush, tobacco acreage was projected to drop by 25 percent in one year alone. The above figure of 10 percent is for just one particular leaf, or burley, in several large tobacco states. It does not represent an overall picture of the tobacco farm product, simply because that information is difficult to find.

The USDA tobacco crop program had been around since Franklin Delano Roosevelt. It was a savior in the Southeast, where tobacco farmers needed either the crop support or the sales from the crop to buy school clothes for their children, who also worked the farms.

One USDA expert reported that by the 2005-2006 crop production year, tobacco experienced a 27 percent decline in production.

“During the first post-program crop year, tobacco acreage decreased by 25 percent to 298,020 acres, the lowest level since before the Civil War,” wrote Tom Capehart in a USDA publication. “Tobacco production declined to 640 million pounds, the lowest level since 1879. Although precise figures are not available, industry sources report that the number of producers has dropped by more than half.”

So, what was the cost of the quota and price support buyout? It was a mere $9.6 billion over 10 years (the thing ends in 2014).

And who gets to pay for that buyout? Well, you do, of course. The quota buyout was financed by assessments over a decade of tobacco products manufacturers and importers, who had little choice but to pass that increase on, if they want to stay in business.

Macroeconomists say that the buyout will actually be an economic blessing in the long run because it has thrown the tobacco farmer to the free-market wolves. This will leave the tobacco farmer to plant wherever and whenever he can. This free-market move is supposed to lower tobacco prices, bringing them in line with foreign producers, which should sprout more interest in U.S. leaf.

Raise your hand if you believe that!

I thought so.

Ahh, therein is the rub. The price competition is perhaps the case for cigarette tobacco. But, what about pipe tobacco?

Pipe tobacco is more than burley and flue-cured leaf. It is truly the art of the tobacconist, who must get other leaf, some exotic foreign dancers, to suit the tastes of American pipe smokers.

See, it is not a matter of baking some burley, spraying it with nicotine-enhancements and other chemicals, wrapping it in paper and slamming a filter on the end.

Pipe tobacco is refined and aged. It is unadorned, and it carries with it, in many instances, foreign leaf, which live in a much smaller market lane, which drives up its costs, which must be borne by the pipe smoker.

In other words, your favorite tobacco, unless created from a beautiful American burley or flue-cured leaf, or some pure Virginia, will generally carry a higher price per ounce than the same amount of cigarette tobacco per ounce.

This may be a good argument as to why pipe tobacco should be separated from cigarette tobacco laws, simply because you are talking apples and oranges (literally in some cases, since some food additives are of the fruit variety for pipe tobacco).

Pipe tobacco is as different from cigarette tobacco as Van Gough is from Rembrandt, as a Maserati is from a Ford, as Mozart is from Elvis.

It won’t take long for the wolves to be at the gate with pipe tobacco losing more than one-quarter of its production in a single year, especially since those figures are already four years old.

The answer is for pipe smokers to rally. Speak up and speak out to Congressmen and local news media. Pipe tobacco must be given separate and special attention when it comes to taxing tobacco in all its ramifications.

And you should know that the bedrock science that started all the anti-smoking movement, which came with the Surgeon General’s Report on Smoking and Health in 1964, spoke some truth.

And here is what then Surgeon General Luther L. Terry said in his report to the nation that January 1964: “The death rates for pipe smokers are little if at all higher than for non-smokers, even for men who smoke 10 or more pipefuls a day and for men who have smoked pipes more than 30 years,” taken from pp. 29.

Pipe smokers must make their voices heard. We have been buried in an avalanche of misinformation and hysteria.

It is little more than social engineering on an Orwellian scale by propaganda, denial of the truth, misinformation and the manipulation of history.

Make your voice count. As a pipe smoker, you have a dog in this fight.