United States Senate Republican Leader Mitch McConnell announced yesterday that the United States Department of Agriculture informed him that tobacco quota holders will receive the full amount of their final tobacco payment by the end of 2015.
Senator McConnell was the primary author of the historic 2004 tobacco buyout. The buyout was created to provide tobacco quota holders with a final opportunity to receive annual transition payments through 2014 in exchange for the termination of all federal restrictions, marketing cards and price support loans for tobacco.
Last year, USDA Secretary Tom Vilsack announced that tobacco buyout payments would be subjected to a 7.2 percent sequestration this year – the final year of payments.
McConnell found a provision within the Budget Control Act that would allow quota holders to receive full payment.
“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,” 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.”
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.