Precious Weed

Tobacco may be an evil weed to some, but to the farmers who grow it, "bacca" has long been manna. The golden leaf was the American Colonies' first profitable cash crop, and since the Depression the Federal Government has guaranteed farmers a rewarding price.

Along the way, a near feudal system has grown up on Southern tobacco farms. To limit production, farmers were given strict growing allotments. These lucrative allotments are hereditary; most owners, who now include stockbrokers and car salesmen, as well as widows and retired farmers, lease them out for up to $1,500 an acre.

Under the Government program, if a farmer could not unload his leaf at auction, he could still consign it to a "pool," a farmers' cooperative that borrows money from the Government. The pool would then try to sell the tobacco. If it succeeded, the loan was repaid, but if it failed, the Government ate the difference. The cost to taxpayers was small, at least compared with other farm subsidies: $600 million total between 1938 and 1982. Yet increasingly, foes of tobacco began asking why any tax funds should go to a product that the Government itself says is a health risk. Under pressure, Congress in 1982 decided the tobacco program should be self-sustaining. To cover their loans, farmers were automatically assessed 3 cents for every pound of flue-cured tobacco they marketed.

But the program was immediately overwhelmed by shrinking markets at home and abroad. Because of health concerns, a doubling of the excise tax on cigarettes from 8 cents to 16 cents, and cheaper foreign-grown tobacco, about a quarter of the tobacco grown in the U.S. last year went unsold at auction. The farmers' assessment under the loan program was increased from 3 cents to 7 cents for flue-cured, 1 cents to 9 cents for burley, but that covered only $175 million of the $1.6 billion they borrowed between 1982 and 1984 and are legally obliged to pay back to the Government. The farmers are trying to work out a deal with the cigarette companies to buy up the surplus tobacco, but the long-term prospects remain grim.

The tobacco program will not go down without a bitter fight in Congress. "It's war," declares Republican Congressman Larry Hopkins of Kentucky. Senator Jesse Helms passed up the chance to be chairman of the Senate Foreign Relations Committee simply to protect tobacco as chairman of the Senate Agriculture Committee. The Reagan Administration has decided to separate the tobacco program from other agriculture subsidies in order to keep Helms & Co. from holding the whole farm bill hostage. If the Administration goes on to kill the tobacco program, Hopkins warns, farmers will walk away from the obligation to pay off Government loans, and the Treasury will face a loss of more than $1 billion. Like a good many smokers, the Government may have a hard time kicking the tobacco habit.