Agriculture Secretary Mike Johanns has announced that sign-up for the Tobacco Transition Payment Program (TTPP) will begin March 14, 2005 and extend through June 17, 2005.
“We are pleased to be able to announce the beginning of the sign-up period for this historic program,” Johanns said. “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.”
Congressional passage late last year of the Fair and Equitable Tobacco Reform Act of 2004 (the Act), 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 marketing year for flue-cured tobacco ends June 30, 2005, and Sept. 30, 2005, for all other tobaccos.
The payment rate for quota holders is $7 per pound times the Base Quota Level (BQL) for quota held as of Oct. 22, 2004. Producers receive $3 per pound times the BQL based upon the producer's share of the risk incurred for 2002, 2003 or 2004 crops.
Payments will be made in 10 annual installments 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 in the appropriate USDA Service Center.
Prior to sign-up, all known quota holders and/or producers will receive a letter providing more detailed information on the program.
The letter also will include Farm Service Agency records of poundage of BQL 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. The regulations concerning payments to quota holders and producers for this program will be available in March.
The Act also authorized USDA to use a financial institution to help carry out the program provisions.
Following a competitive bidding process, USDA awarded a contract to Wachovia Corporation to help conduct an information campaign to insure that all potential beneficiaries are made aware of the program and procedures. The campaign includes sending letters to every quota holder and producer who participates in the program.
Particular emphasis is being placed upon efforts to contact small and minority producers. Wachovia also will place magazine and newspaper ads, radio spots, and television ads in rural and agricultural media; and provide informational brochures at key gathering places.
Town hall meetings will also be hosted in key tobacco-growing states, and a toll-free call center was to go into service March 1, 2005.
For more information, please contact your local USDA Service Center, the National Tobacco Call Center at 1-866-887-0140 beginning March 1, or the Farm Service Agency Web site at www.fsa.usda.gov/tobacco.