Saying that payments under the Tobacco Transition Payment Program (TTPP) should not be subject to sequestration cuts and that an Office of Management and Budget (OMB) plan to do so could erode confidence in government-backed financial programs, Georgia Farm Bureau President Zippy Duvall has written to government officials expressing opposition to the cuts.

The OMB included the TTPP among federal programs to be cut under sequestration rules, a move that has drawn recent protests from tobacco interests because the funds are collected from tobacco companies rather than coming from tax dollars.

Many Georgia tobacco growers took the TTPP buyout plans, under which the final payments are to be issued in 2014.

 

Want the latest in ag news delivered daily to your inbox? Subscribe to Southeast Farm Press Daily. It’s free!

 

The USDA's Farm Service Agency administers the program.

While some growers took annual payments, others opted for a lump-sum loan arrangement through their banks, and in those cases the federal government directed the payments to the banks.

Risks to farmers, banks

To reduce that amount under sequestration places unwarranted risks on both the banks and the farmers, and Duvall warned that it could have negative long-term consequences.

In his letter to OMB Director Sylvia Mathews Burwell, Duvall asked that the TTPP be removed from the list of programs facing cuts, noting that exposing them to sequestration cuts puts farmers and in some cases financial institutions at risk.

"This sequester proposal will undermine faith in U.S. government financial instruments," Duvall wrote. "When other programs are considered, whether agricultural or otherwise, participants will be dubious of the value of the investment. The end result would be less effective programs."

Duvall also sent the letter to Agriculture Secretary Tom Vilsack, Sens. Saxby Chambliss and Johnny Isakson and Georgia Reps. John Barrow (D-12th Dist.), Sanford Bishop (D-2nd Dist.), Jack Kingston (R-1st Dist.), Austin Scott (R-8th Dist.), and David Scott (D-13th Dist.).

The TTPP was created through the American Jobs Creation Act of 2004 to help tobacco farmers move to other crops and to compensate quota holders for their loss of quota, for which they paid. The law terminated tobacco price support and production controls after the 2004 crop year.

Duvall emphasized that TTPP has been a success, allowing former quota holders under the federal tobacco programs to transition into producing other crops.

In Georgia, many of them converted to blueberries, olives and other crops using TTPP. In part because of the TTPP, Georgia has become one of the top states in blueberry production. The state's olive production, which had been non-existent for more than a century, has been reintroduced in the past few years.

See more from the Georgia Farm Bureau at http://www.gfb.org/.

          More from Southeast Farm Press

China making cotton market nervous

Double-crop wheat, soybeans good choice for second year running in Southeast

Growers should budget for FY14FSA program payment reductions

Farmland values down, income up for third quarter 2013