Tobacco program exempt from sequestration

Published 9:03 am Thursday, January 9, 2014

WASHINGTON, D.C. – U.S. Senator Kay Hagan on Tuesday announced that the final year of the Tobacco Transition Payment Program (TTPP) will be exempt from budget sequestration.

In November, Hagan urged Agriculture Secretary Tom Vilsack and Director of the U.S. Office of Management and Budget (OMB) Sylvia Burwell to prevent cuts to the TTPP.

“I am so pleased that after hearing from me and my colleagues about the damage subjecting these payments to sequestration would do, USDA and OMB have agreed to prevent reductions to TTPP payments for small tobacco farmers in North Carolina and across the country that depend on these payments to provide for their families and make ends meet,” said Hagan. “Because these funds come from fees paid by the tobacco industry, not general taxpayer funds, they should not be subject to sequestration.”

“North Carolina Farm Bureau thanks Senator Hagan for her leadership and tireless efforts to avoid the misguided sequestration of the 2014 tobacco buyout payments. Her persistence was valuable in protecting North Carolina producers and quota holders from unnecessary hardship,” said North Carolina Farm Bureau President Larry Wooten.

Funding for the TTPP, commonly referred to as the “tobacco buy-out,” derives from user fees assessed on all tobacco product manufacturers and importers, not from general revenues of the federal government. The USDA distributes these funds to eligible recipients.

The TTPP, which was established in 2004, provides $10.1 billion in direct payments between 2005 and 2014 to tobacco growers and landholders in exchange for the elimination of the tobacco quota and price support system.

North Carolina is the top tobacco producing state in the country and is home to 2,000 small tobacco farmers.