US: New Era of Tobacco Begins As Buyout Payments End for Farmers

Source from:  WDBJ 7 Roanoke 11/14/2014

A lifeline for Tobacco farmers has gone up in smoke. This month will be their last check from the Tobacco Transition Payment Program.

It payed farmers after some restrictions were lifted on how they grew and sold their tobacco crops.

Farmers tell me if their farming colleagues were financially responsible this shouldn't hurt.

It could mean some stop farming or limit the size of their tobacco fields next year. And it may impact the economy.

"Tobacco was my livelihood," said Bobby Wilkerson, his tobacco fields are covered by grass this year.

He stopped growing tobacco near his home in 2006, he's now a mentor to other farmers in the area.

"Our expenses were were more than our income with labor, and fertilizer, and chemicals," Wilkerson said.

Like many of his farming friends, he got help from the federal government's tobacco buyout program.

He says many people used it to cover debts and pay for maintenance.

In 2004, the Fair and Equitable Tobacco Reform Act essentially rewrote rules on tobacco farmers and ended the quota and price support program that had been in place since 1938.

That next year, 2005, started a new era into a free market without guidelines, restrictions on how much a farmer could plant, or price supports.

This is where the Tobacco Transition Payment Program comes into play. It was created to help farmers who held strict to quota holders change over to the new atmosphere by paying them based on their production size.

Payments ranged from about $100 to several thousand dollars. The US Department of Agriculture sends $10 million to tobacco farmers in Pittsylvania County. Wilkerson says the true test comes next year when the financial support doesn't exist.

"I hope they have used that money so they have something to fall back on for years to come if they're going to continue to grow tobacco," Wilkerson said.

According to the Associated Press, Cigarette makers will have paid $10 billion to compensate growers for surrendering their quotas since the program began. There are now more than 108 thousand fewer tobacco farms in the U-S since 1992 because tougher health restrictions.

Now without this funding, Pittsylvania County could have the fewest tobacco farmers since the cash crop became king in Virginia more than 400 year ago.

Still some farmers say there won't be an impact at all. It depends on size of the operation and how the farmer used the money. Enditem