The Federal Tobacco Program: Expensive, Conflicting, and Controversial

This article, which appeared in the GAO Review, Vol. 19, Issue 1, Winter 1984, discusses the Federal tobacco price support program, which conflicts with current legislation designed to warn cigarette consumers of the health hazards involved in their use. Under the program, the Government currently has price-support loans outstanding on tobacco valued at over $1.5 billion and, from its inception, the program has cost taxpayers over $840 million in interest. The program worked fairly well prior to the late 1970's; however, as the price support of U.S. tobacco rose, domestic and foreign markets were lost, and large amounts of tobacco came under Government loan. New legislation is discussed which will require tobacco producers to pay for the program's acquisition, carrying, and interest costs.