- Final year of federal tobacco buyout payments will come in full to tobacco farmers and not subject to federal sequestration.
The United States Department of Agriculture says tobacco quota holders will receive the full amount of their final tobacco payment, as part of the 2004 tobacco buyout, by the end of fiscal year 2015
Last year, USDA Secretary Tom Vilsack announced that tobacco buyout payments would be subjected to a 7.2 percent sequestration this year – the final year of tobacco buyout payments. But there was a catch that could allow the payments to come in full to tobacco farmers.
U.S. Senator Mitch McConnell (R-Ky.) contacted Vilsack and the Office of Management and Budget Director Sylvia Mathews Burwell and brought attention to a provision in the Budget Control Act that would allow quota holders to receive full payment.
“I am pleased that the USDA agreed to provide our farmers with the full final payment amount that they need and deserve, and that Kentucky farmers will not lose the money that was promised to them in the settlement,” said McConnell in a statement. “Tobacco is one of the Commonwealth’s most historic, signature industries. I worked hard to deliver this buyout to Kentucky’s tobacco growers, who are some of the hardest working agricultural workers in our state. This buyout helped transition the crop to the free market and eliminated federal farm price supports for tobacco in exchange for billions in compensation paid to tobacco quota owners.”
Roger Quarles was happy to hear the news. He’s the president and chairman of the U.S. Growers Tobacco Company and former president of the Burley Tobacco Growers Cooperative.
“Senator McConnell has ensured that the tobacco buyout, of which he championed ten years ago, is seen through all the way. Farm families from Florida to Virginia and as far west as Missouri are elated to look forward to payment in full for the last of the payments as promised 10 years ago. And particularly Kentucky farmers and tobacco growers are most thankful,” said Quarles in a written statement.
In 2004, the tobacco buyout established the USDA TTPP to provide tobacco quota holders with a final opportunity to receive annual transition payments from 2005-2014 in exchange for the termination of all federal restrictions, marketing cards and price support loans for tobacco.
According to the University of Kentucky, 2013 tobacco sales in Kentucky were projected to be worth $400 million.