Michael F. Easley
Governor
State of North Carolina
Office of the Governor
Governor's Press Office
State Capitol, Raleigh, NC 27603-8001
(919) 733-5612 - Toll Free 1-800-662-7005
FAX (919) 733-5166
For Release: IMMEDIATE Contact: Ernie Seneca
Date: March 11, 2005 Phone: 919/733-5612
GOV. EASLEY URGES GROWERS AND QUOTA HOLDERS TO SIGN UP FOR FEDERAL TOBACCO BUYOUT
RALEIGH – Gov. Mike Easley is urging North Carolina farmers and quota holders to sign up for the federal tobacco buyout program, which begins Monday, March 14, and runs until Friday, June 17.
“Historic legislation passed in last year’s Congress ends the Depression-era tobacco quota system and provides our farmers much needed financial relief and security,” Easley said. “I want to urge people to sign up for this buyout program.
“Our tobacco farmers and quota holders have been waiting for this day a long time,” he said. “Tobacco has been a way of life for generations of North Carolinians and a mainstay of the family farm. Those days are gone and this buyout is critical to our family farmers and local communities. These transition payments over the next 10 years will help our tobacco growers adjust to world markets and to also further diversify their farming operations into other crops.”
Agriculture Commissioner Steve Troxler said the buyout was necessary for tobacco to remain a major agricultural commodity in the state. “The end of price supports will allow our growers to regain a competitive footing with overseas producers who have been undercutting us on price for several years,” Troxler said. “There will be new challenges, but North Carolina farmers have shown time and again that they can meet challenges successfully.”
The Fair and Equitable Tobacco Reform Act of 2004 brought to an end the federal tobacco-marketing quota and price support loan programs with the 2004 marketing year. The marketing year for eastern grown, flue-cured tobacco ends June 30, 2005; Sept. 30 for other tobaccos, such as burley that is grown in the mountains.
Signups will be held across the state at local Farm Service Agency offices of the U.S. Department of Agriculture. Eligible quota holders are those who owned a farm on Oct. 22, 2004 with an assigned basic tobacco quota. Buyout payments for these quota holders are $7 per pound based upon the 2002 basic quota. Growers get $3 per pound times the 2002 effective quota produced on the land they farm times the producer’s share of risk for the 2002, 2003 and 2004 crops.
The federal tobacco marketing and quota system had been in place since the 1930s. The system set limits on how much tobacco acreage a grower could plant and offer for sale. It also offered growers a guaranteed minimum price if their tobacco failed to sell on the open market, which for years occurred on warehouse auction floors. Because of demand for cheaper foreign-grown tobacco, U.S. quotas had declined steadily since 1997.
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