ponto
January 18th, 2006, 01:34 PM
Agriculture Secretary Mike Johanns announced today that USDA will begin issuing more than $950 million in Tobacco Transition Payment Program (TTPP) payments to quota holders and producers.
Also, quota holders and producers can enter into successor-in-interest contracts beginning Jan. 23, 2006 for subsequent payments which would enable them to receive lump-sum payments from private entities by selling the remaining eight TTPP payments.
"Approximately $1.9 billion in payments will have been paid to tobacco quota holders and producers when this second round of payments ends," said Johanns. "These funds are helping tobacco farmers transition to the free market and mark the end of the federal tobacco marketing program."
The TTPP marks the end of the federal tobacco marketing quota and price support loan programs in place since the Great Depression. The Fair and Equitable Tobacco Reform Act, signed into law by President Bush in October 2004, established the TTPP.
The TTPP is funded by assessments on tobacco product importers and manufacturers. The TTPP, begun in 2005, ends in 2014, and provides 10 equal annual payments to quota holders and producers. The payments, made every year on or about January 15, are approximately $950 million. CCC issued the first annual installment in 2005.
USDA does not make lump sum TTPP payments to quota holders and producers. However, quota holders and producers can receive lump sum payments by selling their interest to a third party through "successor-in-interest" contracts. In 2005, third parties bought more than 89,000 TTPP contracts worth approximately $1.5 billion.
Also, quota holders and producers can enter into successor-in-interest contracts beginning Jan. 23, 2006 for subsequent payments which would enable them to receive lump-sum payments from private entities by selling the remaining eight TTPP payments.
"Approximately $1.9 billion in payments will have been paid to tobacco quota holders and producers when this second round of payments ends," said Johanns. "These funds are helping tobacco farmers transition to the free market and mark the end of the federal tobacco marketing program."
The TTPP marks the end of the federal tobacco marketing quota and price support loan programs in place since the Great Depression. The Fair and Equitable Tobacco Reform Act, signed into law by President Bush in October 2004, established the TTPP.
The TTPP is funded by assessments on tobacco product importers and manufacturers. The TTPP, begun in 2005, ends in 2014, and provides 10 equal annual payments to quota holders and producers. The payments, made every year on or about January 15, are approximately $950 million. CCC issued the first annual installment in 2005.
USDA does not make lump sum TTPP payments to quota holders and producers. However, quota holders and producers can receive lump sum payments by selling their interest to a third party through "successor-in-interest" contracts. In 2005, third parties bought more than 89,000 TTPP contracts worth approximately $1.5 billion.