Tobacco Transition Payment Program to be Subject to Sequester

It’s become common knowledge that the final Tobacco Transition Program Payment due to be issued in January will be subject to sequester-mandated funding cuts. 13th District Representative for North Carolina George Holding says this situation is a bit baffling:

“Its phenomenal that they would do this. Its just unconsciousable. People need to realize that the money is paid to tobacco farmers to relinquish their allotments and you have the opportunity to farm something other than tobacco. These monies were not tax payer dollars. They are all user fees which came from the tobacco companies. The Federal government was just administering this program and making the payments over ten years. So for them to come in now and say its subject to sequester is unconsciousable.”

Holding, along with other North Carolina representatives as well as both Senators from North Carolina have drafted letters to the Office of Management and Budget and Ag Secretary Tom Vilsack pointing out the faulty logic of applying sequester rules to these funds. Holding explains what he expects from the letters:

“They are going to have to explain this. I represent North Carolina’s 13th district, which is the number one tobacco growing district in the country. A lot of my constituents are impacted by this. They are going to have to explain themselves and their logic. It feels like there is a sinister political motive behind this and they are looking for places where they can apply the sequester that would apply the most pain to those who don’t favor this administration."

Holding explains what he thinks it’s going to take to make this situation right for tobacco farmers:

“I think exposing it is step one. Often times if you shine a bright light on something that doesn’t pass the smell test– that is a good way of correcting the situation.”

Holding does anticipate congressional action at some point:

“I’m sure that we will have hearings on it. I’m sure that the oversight committee, the ag committee and others will have hearings over this. They will have to explain themselves.”

The distribution of that money is less than 60 days away, and right now congress can’t agree on lunch. But, Holding says funds will be distributed on time, and that he and other tobacco state representatives and senators will fight for the balance to be distributed at a later date:

“They are trying to cut the payments 7-8% across the board. The bulk of the payment will go out on time. And if we are not able to get them to rectify the situation and come to their senses, we will work on making sure they get a second check out to cover the arrears of what they are not going to pay.”

13th District Representative from North Carolina George Holding.

To read the Tobacco Transition Payment Program Sequestration Letter click here. 

To read the FSA Advisory click here