Tobacco Subsidies

7. Tobacco Subsidies

At the same time HEW had increased its budget to $29.8 million for 1979 efforts to combat smoking, the Department of Agriculture ran a loan program to guarantee the tobacco farmer a fixed and high-support price. If the farmer’s tobacco crop cannot be sold on the market at the fixed price, a federally-supervised stabilization corporation buys the tobacco with funds borrowed from the government. The low-interest rate for the loan is, to an extent, subsidized by the taxpayer.

The corporation holds the tobacco crop and can sell it later when the price is better. In fiscal 1979, the government loaned $227 million for such programs and spent another $9 million on tobacco research, grading, marketing news, and administration. More than half the loan monies were paid back within a few months.

In 1975 and again in 1979, the Surgeon General issued an official government document warning the U.S. citizens about the dangers of smoking. In these books (published by the U.S. Department of Health, Education and Welfare), extensive scientific evidence supports the fact that cigarette smoking is a life-threatening habit. Yet, the government continues to support this poison habit.