Business
7:11 am
Thu November 21, 2013

Sequester Brings Cuts To Tobacco Farmers

Credit kyagr.com

Kentucky tobacco farmers stand to lose an estimated $12,000,000 because of federal budget cuts related to the sequester.

The cuts are scheduled to hit the next round of price support payments sent to about 100,000 Kentucky tobacco farmers and quota holders.

Kentucky Farm Bureau President Mark Haney says the payments should be exempt from the federal spending cuts.

"This shouldn't even be considered for sequestration because it's actually a contract that was signed between the tobacco producers and the tobacco manufacturers," Haney said. "Really, the federal government was just holding the money and making the program work."

Haney says members of Kentucky's congressional delegation and farm lobby are teaming up with their counterparts in Tennessee, North Carolina, and Virginia, in an effort to convince the U.S. Department of Agriculture that the tobacco price support payments should be left alone.

Congress passed a 10-year buyout in 2004 to help tobacco farmers after a price-support system was ended.

"The North Carolina delegation, Tennessee, and Virginia--states that really had the lion's share of this tobacco quota that was sold. We are in unison working with those groups,” he said,

The Kentucky Farm Bureau says the tobacco buyout dollars come from a  contract between farmers and a trust funded by tobacco companies, and therefore should not be subject to the sequester cuts.