Loophole in Canada's Tobacco Quota Buyout

Source from:  Tobacco Reporter 03/23/2009

Mar 20, 2009-A $285-million federal program designed to encourage tobacco growers to exit the industry contains a loophole that could allow them to collect quota buyout payments while continuing to produce tobacco, according to a report on Canada.com. Under the Tobacco Transition Program, unveiled in August, the federal government agreed to pay growers $1.05 per pound for their production quotas on condition they exited the industry forever. However industry insiders say that, in theory, a grower can legitimately transfer his or her quota to anyone who is not a close relative and have that person apply for the buyout payment, while the grower applies for a licence to produce tobacco under a new regime being developed by the Ontario government. This is the theory. In practice, the grower has to find a 'surrogate' quota holder who can be trusted to hand over the buyout payment once it is made. Also, it has to be wondered whether, given the circumstances that have led to the buyout being necessary, anybody will want to continue producing tobacco. Anyway, the head of the Ontario Flue-Cured Tobacco Growers' Marketing Board, Linda Vandendriessche, which is overseeing the transition, says that if growers are seen to be doing something contrary to the "spirit" of the program, they can be made to return buyout payments. Enditem