Published March 4, 2005, in The Ledger Independent
It’s been talked about for years and seemed as if it would never come about, but sign-up for the Tobacco Transition Payment Program begins Monday at area Farm Service Agencies.
“We are pleased to be able to announce the beginning of the sign-up period for this historic program,” Agriculture Secretary Mike Johanns announced recently.
“The Tobacco Transition Payment Program will end the decades old tobacco marketing quotas and provide transition payments over a 10-year period. All tobacco quota holders and producers are urged to visit their local USDA service center and sign up for these benefits,” Johanns said.
Quota owners who will be eligible for payment are those who owned a farm on Oct. 22, 2004, to which a tobacco basic quota was assigned, a USDA press release said.
“Congressional passage late last year of the Fair and Equitable Tobacco Reform Act of 2004, commonly referred to as the ‘tobacco program buyout,’ ended the federal tobacco marketing quota and price support loan programs with the 2004 marketing year for all quota tobaccos,” the release said.
The payment rate for quota holders is $7 per pound based on the 2002 basic quota. Producers receive $3 per pound based on the 2002, effective quota produced on the farm, times the producer’s share of the risk incurred in 2002, 2003, or 2004 crops.
Payments will occur over the course of 10 years with annual payments, but may be assigned or a successor-in-interest to the contract may be permitted. If quota holders or producers have interests in farms in more than one county, contracts for each of these farms must be entered into the appropriate USDA service center, the release said.
Growers and quota holders should expect to receive a letter providing more detailed information concerning the program before March 14.
The letter also will include Farm Service Agency records of poundage for individual quota holders and/or producers. If the information is inaccurate or incomplete, quota holders and/or producers are requested to provide verifiable information to their USDA service center personnel at sign-up.
Wachovia Corp. won a bid to help carry out the program provisions.
An advertising campaign will be overseen by Wachovia to make growers aware of the program, including the placement of ads in magazines, newspaper, radio and television as well as rural and agricultural media.
There will be town hall type meetings in states considered key tobacco producers.