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NEWS
UNITED STATES DEPARTMENT OF AGRICULTURE
Office of Communications News Room 460-A
Washington, DC 20250-1300
Internet: News @usda.gov Phone: 202-720-4623
World Wide Web Home Page:
http://www.usda.gov
Release No. 0009.08
Tobacco Farmers Receive Transition Program Payments
WASHINGTON, Jan. 14, 2008 - USDA will issue this year’s
installment in the Tobacco Transition Payment Program with
more than $950 million in payments to former quota holders
and producers today. The transition payments are funded by
assessments on tobacco product importers and manufacturers.
Approximately $3.8 billion in payments will have been
paid to former tobacco quota holders and producers when
this fourth round of payments ends. These funds help
tobacco farmers’ transition to the free market, due to the
termination of the federal tobacco marketing program.
The Tobacco Transition Payment Program marked the end of
the federal tobacco marketing quota and price support loan
programs, which had been in place since the Great
Depression. The Fair and Equitable Tobacco Reform Act,
signed into law by President Bush in October 2004,
established the payment schedule.
Payments began in 2005 and will end in 2014, to provide
10 equal annual payments to former quota holders and
producers. The payments made every year on or about Jan.
15, total approximately $950 million per year.
Also, former quota holders and producers may enter into
successor-in-interest contracts to receive lump-sum
payments from private entities by selling their interest in
the remaining six Tobacco Transition Payment Program
payments. In 2007, third parties bought more than 22,000
transition contracts worth approximately $300 million.
This is in addition to the successor contracts of previous
years.
For more information, visit the Tobacco Page on the
USDA Farm Service Agency's Web site,
www.fsa.usda.gov,
or
call the National Tobacco Processing Center at 1-800-673-
2331.
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