Tobacco News

Tobacco Buyout Signed Into Law

On October 22, 2004 the tobacco buyout was signed into law. This law approves the buyout of the tobacco quota holders and the tobacco producers. The buyout bill provides payments to both tobacco quota holders (owners) and to tobacco producers (growers). The buyout also allows anyone to grow tobacco in the future.

Quota Owners will be paid approximately $7.35 per pound for tobacco basic quota owned on October 22, 2004. This amount is approximately equivalent to the 2002 basic quota times $7.00 per pound. The payments will be paid over ten years.

Tobacco Producers will be paid up to $3.00 per pound for the effective tobacco marketing quota for the 2002, 2003 and 2004 crop years. In order to receive the full $3.00. you must have been a producer in 2002, 2003 and 2004. If you only grew tobacco in two of these years, you will be paid $2.00 per pound. . If you only grew tobacco in one of these years, you will be paid $1.00 per pound. The payments will be paid over ten years.

The deadline for sign-up for the buyout is June 17, 2005.

Crop Insurance is still available to tobacco growers, and a large part of the cost of the crop insurance is still paid by the federal government.

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