Final Tobacco Transition Program Payment next Month
“In 2004 the Federal Government reached a settlement with tobacco growers that ended the tobacco quota and price support system that had been in existence since the Great Depression. It eased the farmer’s transition to a free market.
The government has made annual payments to farmers for ten years and the $10 billion program has been funded with fees from the tobacco companies. The point is, this is not government money.
Once the program ends, NC farmers will have received $4 billion. That is a lot of money that has been flowing into the state’s economy over the past ten years and for the most part has gone into the rural areas. We had several growers that left the tobacco farming business and they either retired or switched to another crop. But some have used the money to modernize their operations or even expand.
We were able to lower the price of tobacco which got us back into world markets and the result has been that we have fewer farmers growing it, but we have more acres than before the buyout occurred.
In 2004 there were 156,000 acres of tobacco harvested in NC, which is much less than 2013. We are growing 172,000 acres now and it’s not an easy time. The price has been good but input costs are high. Domestic demand has decreased but our export market has been strong.
The final payment going out in Jan will be subject to the Federal Sequester. They are saying that they may sequester 7% of this last payment, but we know they cant do that because its not government money. And myself, Farm Bureau, and all the farm groups are working to try to reverse this.
The NC representation in Washington has been working hard on this. I have been speaking directly with the USDA and they know its wrong and its time to tell the administration that its wrong.”