WASHINGTON, Dec 14 (Reuters) - U.S. cigarette makers' use of foreign-grown tobacco is responsible for the drop in the number of American tobacco farms, not a decline in U.S. smoking rates, according to a report released on Tuesday by three health groups.

From 1997 to 1999, U.S. cigarette companies cut their purchases of U.S.-grown tobacco for domestic manufacturing by roughly 35 percent, the report said. That compared to a 4 to 5 percent reduction in U.S. smoking rates during the same period, the report added. The report was released by the American Cancer Society, the American Heart Association and the Campaign for Tobacco-Free Kids. The groups sought to use the report's findings to attack the powerful political partnership between U.S. tobacco manufacturers and growers that they say has hurt the cause of anti-smoking proposals. Cass Wheeler, president of the American Heart Association, said the report dispels the myth that the decline of American tobacco farms has been caused by the drop in U.S. cigarette use, but rather by the actions of cigarette manufacturers. ``For years, tobacco manufacturers have tried to blame the plight of the American tobacco farmer on declining smoking rates. The problem is clearly coming from the manufacturers,'' Wheeler said. The report found that U.S. tobacco farmers were hurt by decisions by U.S. cigarette makers to manufacture more of their products overseas, use more foreign-grown tobacco in cigarettes they make here and abroad, and finance the development of new and cheaper sources of foreign tobacco to replace American growers. The report also said U.S. cigarette companies currently manufacture more cigarettes per year in the United States than they did in the early 1970s, but use about one-third less American-grown tobacco in the process. ``If U.S. manufacturers would use U.S. tobacco ... the American farmer today would be in as good of shape as a decade ago,'' said Matthew Myers, president of the Campaign for Tobacco-Free Kids. U.S. GROWERS' SHARE OF THE MONEY DECLINES The report said between 1980 and last year, growers' share of every dollar spent on cigarettes in the United States fell from seven cents to less than two cents, while cigarette companies' share mushroomed from 36 cents to 49 cents. The report said the number of small family farms in the United States has fallen from more than 500,000 in the 1950s to fewer than 85,000 currently. Georgia, South Carolina and North Carolina have experienced more than a 40 percent decline in small tobacco farms between 1992 and 1997, the report said. At the same time, tobacco production in countries such as China, Chile and Italy has increased greatly. U.S. cigarette makers disputed the findings, saying the decline in U.S. tobacco farms was a result of last year's $206 billion settlement between U.S. states and cigarette companies. The states had sued the industry to recoup the billions of dollars spent to treat smoking-related illnesses. ``This report is a blatant attempt to drive a wedge between U.S. tobacco farmers and tobacco manufacturers,'' said Rusty Cheuvront, spokesman for Philip Morris Cos. Inc. (NYSE:MO - news), the world's largest tobacco company. ``We knew American tobacco farmers were going to get hurt because of the tobacco settlement ... but we have been responsive to the farmers. We have been and will continue to be the largest purchaser of U.S. tobacco,'' Cheuvront added.

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