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USDA announces tobacco transition payments

USDA announces tobacco transition payments

• The program, which began in 2005, ends in 2014 and provides 10 equal annual payments to quota holders and producers. • This round of payments totals more than $950 million. In all, approximately $6.25 billion will have been paid to tobacco quota holders and producers with this seventh round of payments.


The U.S. Department of Agriculture has announced it will begin issuing Tobacco Transition Payment Program (TTPP) payments to quota holders and producers.

Also, quota holders are now being allowed to enter into successor-in-interest contracts that permit the transfer of rights to their remaining TTPP payments in exchange for a lump-sum payment.



The TTPP was established under the Fair and Equitable Tobacco Reform Act of 2004 and marks the end of federal tobacco marketing quota and price support loan programs. The TTPP is funded by assessments on tobacco product importers and manufacturers.

The program, which began in 2005, ends in 2014 and provides 10 equal annual payments to quota holders and producers. This round of payments totals more than $950 million. In all, approximately $6.25 billion will have been paid to tobacco quota holders and producers with this seventh round of payments.



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.

The sales period for the three remaining payments is Jan. 18, 2011 through Nov. 1, 2011. Since 2005, third parties bought more than 170,000 TTPP contracts worth almost $3 billion.



For more information on the TTPP, visit the Farm Service Agency tobacco web page at http://www.fsa.usda.gov/tobacco.

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