Congressman Kingston announces signup for tobacco buyout payments beginning March 14 FCIC rate also set at $1.35

Congressman Kingston announces signup for tobacco buyout payments beginning March 14 FCIC rate also set at $1.35

WASHINGTON, D.C. - U.S. Representative Jack Kingston (R/Ga-1) announces that sign-up for tobacco buyout payments will begin March 14.

"It took a lot of work to finally get a tobacco buyout but now we are seeing the first steps toward ending the 65-year-old quota system," Congressman Kingston said. "I urge all tobacco quota holders and producers to go to their local USDA Service Center as soon as the sign-up period begins."

The Tobacco Transition Payment Program (TTPP) will begin March 14 and extend through June 17, 2005.

The Tobacco Program Buyout, approved by Congress last fall, ends the federal tobacco marketing quota and price support loan programs with the 2004 marketing year for all quota tobaccos. According to the USDA, the payment rate for quota holders is $7 per pound times the Base Quota Level (BQL) for quota held as of Oct. 22, 2004. Producers receive $3 per pound times the BQL based upon the producer's share of the risk incurred for 2002, 2003 or 2004 crops.

Buyout payments will be made over a 10-year period. Tobacco farmers involved in farms in more than one county should enter separate contracts for each farm at the appropriate USDA Service Center.

The USDA will send letters to all producers and quota-holders before March 14 with more information on the transition payments as well as information on poundage for the specific farmer. If the information is not correct, quota holders and producers can take verifiable information to the USDA Service Center when they sign up for the buyout payments.

The USDA will announce regulations for the buyout program next month. For more information, contact your local USDA Service Center, the National Tobacco Call Center at 1-866-887-0140 beginning March 1, or the Farm Service Agency Web site at www.fsa.usda.gov/tobacco.

Congressman Kingston also announced that the USDA Risk Management Agency has set the 2005 Crop Year Additional Price Election for Flue-Cured and Burley Tobacco with respect to crop insurance. The additional price represents the maximum price election for the crop year and is $1.35 per pound for flue-cured tobacco.

"Hopefully, this will allow farmers to cover the cost of production," Congressman Kingston said. "This was more than we expected so it's good news."

These price elections are available to all producers of flue-cured and burley tobacco that insure their 2005 crop at levels above catastrophic coverage. Price election choices must be made on or before the sales closing date for the crop in a county. The price for catastrophic coverage is 75-cents per pound for flue-cured tobacco.

http://www.house.gov/kingston/rls_buyoutsignup.htm