Last year, USDA Secretary Tom Vilsack announced that tobacco buyout payments would be subjected to a 7.2% sequestration this year – the final year of tobacco buyout payments. However, Senator McConnell contacted Agriculture Secretary Tom Vilsack and Office of Management and Budget (OMB) Director Sylvia Mathews Burwell identifying a provision within the Budget Control Act that would allow quota holders to receive full payment.
WASHINGTON, D.C. – United States Senate Republican Leader Mitch McConnell announced today that the United States Department of Agriculture (USDA) informed him that tobacco quota holders will receive the full amount of their final tobacco payment, as directed by a provision within the Budget Control Act, by the end of FY 2015. Senator McConnell was the primary author of the historic 2004 tobacco buyout.
“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,” Senator McConnell said. “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, current President and Chairman of the U.S. Growers Tobacco Company and former president of the Burley Tobacco Growers Cooperative, praised Senator McConnell for his work to secure the full payments for Kentucky tobacco growers. “Senator McConnell has once again proven to be one of the strongest allies for tobacco and agriculture in Washington,” Quarles said. “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.”
Background: 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. Section §518a. of the Tobacco Buyout which states: “The Secretary shall offer to enter into a contract with each tobacco quota holder under which the tobacco quota holder shall be entitled to receive payments under this section in exchange for the termination of tobacco marketing quotas and related price.”
According to the University of Kentucky, tobacco sales in Kentucky were projected to reach $400 million for 2013.